One of the assumptions of efficient market is that investors react to new information. The evidence show that investors overreact to new information. They tend to be either over-optimistic or over-pessimistic. Therefore equity prices are not equitably determined by the "true" forces of market supply/demand and are not in equilibrium most of the time. Although stock prices would go abnormally high (low) due to investors' Overreaction in the initial period, they have a tendency to adjust themselves back to the equilibrium level in the subsequent period.
This research investigates the Investors' overreaction in the Tehran Stock Exchange. The results indicate that stocks in the best (worst) performing experience, a reversal of fortune in the following years.
Nikbakht, M. R., & Moradi, M. (2005). The Evaluation Investors Overreaction in the Tehran Stock Exchange (TSE). Empirical Studies in Financial Accounting, 3(9), 1-26.
MLA
Nikbakht, M. R., & Moradi, M. "The Evaluation Investors Overreaction in the Tehran Stock Exchange (TSE)", Empirical Studies in Financial Accounting, 3, 9, 2005, 1-26.
HARVARD
Nikbakht M. R., Moradi M. (2005). 'The Evaluation Investors Overreaction in the Tehran Stock Exchange (TSE)', Empirical Studies in Financial Accounting, 3(9), pp. 1-26.
CHICAGO
M. R. Nikbakht & M. Moradi, "The Evaluation Investors Overreaction in the Tehran Stock Exchange (TSE)," Empirical Studies in Financial Accounting, 3 9 (2005): 1-26,
VANCOUVER
Nikbakht M. R., Moradi M. The Evaluation Investors Overreaction in the Tehran Stock Exchange (TSE). Empirical Studies in Financial Accounting. 2005;3(9):1-26 (In Persian).
