From the course: Behavioral Finance Foundations
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
Post earnings announcement drift
From the course: Behavioral Finance Foundations
Post earnings announcement drift
- [Instructor] Post-earnings announcement drift, or PEAD, refers to the tendency of stocks to drift over a few days in the same direction as the stock price change right after earnings are released. Let me show you what I mean. Now, publicly traded firms, that is stocks on the stock market, report their earnings every three months. In other words, they tell investors what their profits are each quarter. If earnings are good, if the company is making money, especially more money than investors expected, the stock usually goes up. If earnings are bad, if there's a problem with the business, the stock usually goes down. Post-earnings announcement drift, or PEAD, refers to the tendency of stocks to keep moving in that same direction as their earnings results. So when stocks have good earnings, they might see an initial boost to the stock price and then the price might continue to rise throughout the day, and even in ensuing…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.