Applied Corporate Finance THE FOUNDATIONS参考.ppt

This study looked at thousands of earnings and dividend announcements, categorized by day of the week in the 1980s. Either bad things tend to happen on Fridays, or managers are trying to hold on to bad news until Friday. In fact, most of the bad news on Friday comes out after 4 pm, and markets have closed. Managers do not trust markets to not panic on bad news. This may explain a portion of the weekend effect - stock prices tend to go down on Mondays. The Shiller effect - stock prices are much volatile than justified by looking at the underlying dividends and other fundamentals - is debatable. While people often present anecdotal evidence on the phenomenon, they under estimate the volatility of the underlying fundamentals. For every researcher who claims to find evidence that markets overreact, there seems to be another researcher who finds evidence that they under react. And no one seems to be able to systematically make real money (as opposed to hypothetical money) on these supposed over or under reactions. Corporate strategists, like Michael Porter, argue that market prices are based upon short term forecasts of earnings and do not factor in the long term. In markets outside the US, the argument is that prices are moved by insiders and that they have no relationship to value. This again has no right answers. Most participants, given the barrage of criticism that they hear about markets on the outside, come in with the perception that prices are short term. However, most people are also unwilling to trust managers to make good long-term decisions, which brings the real problem to the forefront. The question should not be whether you trust the market to be long term, but whether you trust markets more than managers… The point is that markets are imperfect, but someone has to make the judgments. Managers argue that they do it better. Governments argued (especially in the socialist heyday) that they have a long term focus. The Ministry of Finance in Japan thought it