We find strong evidence that recent performance is indeed particularly predictive of performance in the NCAA tournament, and that the committee underreacts
to this information, whether or not committee members are instructed to consider, or ignore, such information.
So even though we're talking about the opposite--people who consider everything an emergency--I'll start by saying that I would always rather have someone who overreacts than underreacts
. They are often your most productive and attentive employees.
"He never reacts too strongly, but he never underreacts
This may be because either the market underreacts
to the predictable effect on sin stocks of the party in the presidency and of the party with a majority in Congress, or the market may have incomplete information about the effect.
I find that firms tend to experience positive abnormal returns in the year subsequent to high peer R&D investments, suggesting that the market underreacts
to the externalities of R&D.
The evidence suggests that the market systematically underreacts
to the future performance implications of changes in deferred revenues.
Although highly touted as a useful incentive for stock repurchases, both studies find that the market underreacts
to announcements, suggesting that much of the information conveyed by open market share repurchases is actually ignored or mistrusted.
market systematically overreacts to certain misbehaviors and underreacts
Like long-run results for secondary distributions by insiders, the long-run results for MED issues suggest that the market underreacts
to the negative information about the underlying firms in these transactions.
ONE of the givens about betting for long-term profit is to step in when you think the market underreacts
to certain factors.
Vuolteenaho, "Who Underreacts
to Cashflow News?Evidence from Trading Between Individuals and Institutions" Journal of Financial Economics 66, pp.
(92.) Differences of opinion of the effect of fundamental value go to whether the market reacts correctly, underreacts
, or overreacts.