Abstract
If it seems like earnings announcements are the bane of stock prices, that’s probably because they often are: About 70% of all price crashes in 2014 were related to earnings announcements.
That’s the chilling finding reported by Richard Sloan , a professor at the University of California, Berkeley ’s Haas School of Business and his co-authors Korcan Ak, Steven Rossi and Scott Tracy.
To help asset managers defend their portfolios—and their reputations—from stock price crashes, the authors identified five “crash-risk flags.” They find that holdings with three or more flags warrant serious concern.
“It’s not only about avoiding crashes, but earning higher returns and lowering risk,” explains Sloan.
- The content is made available for your general information and use and is not intended for trading or other specific investment advice purposes or to address your particular requirements. We do not represent or endorse the accuracy or reliability of any advice, opinion, statement, or other information provided any user of this publication. Reliance upon any opinion, advice, statement, or other information shall also be at your own risk. Independent advice should be obtained before making any such decision. Any arrangements made between you and any third party named in this publication are at your sole risk.
Don’t have access? Register today to begin unrestricted access to our database of research.
Log in using your username and password
In this issue
Jump to section
Similar Articles
Cited By...
- No citing articles found.