Example
A company has exceeded earning expectations in the forth quarter every year for 4 years. Each year the earnings came as a surprise and the stock went up by an average of 20 percent. In the fifth year, a large number of investors have recognized the pattern. The company exceeds published analysts expectations again but the stock declines as too many investors have purchased in advance of earnings in hopes of selling on the earnings date for a quick profit.| Overview: Sell On News | ||
Type | InvestingBehavioral Finance | |
Definition | The tendency for a stock to go down on positive news if that news has already been predicted by the market. | |
Also Known As | Buy on rumor, sell on news | |
Implications | Predicable good news doesn't necessarily increase a stock's price. | |
Related Concepts | ||
