Driven to Distraction: Extraneous Events and Underreaction to Earnings News PoorSatisfactoryGoodVery GoodExcellent Be the first. (0 ratings) Log in to rate this article. CFA Digest February 2010 | Vol. 40 | No. 1 | 3 pages Source: CFA InstituteDavid Hirshleifer Sonya Seongyeon Lim Siew Hong TeohNicholas J. Handley, CFA (Reviewer) Read Abstract The investor distraction hypothesis states that investors underreact to news when multiple demands are placed on their attention. The authors find strong supporting evidence for the hypothesis by directly measuring earnings announcement returns as a function of the number of competing announcements. The effect is most pronounced when the competing announcements are numerous and deliver big surprises and when the earnings announcement is from a small company in an unrelated industry. Although the initial trading day underreaction is weaker, the post-earnings-announcement drift is stronger. View more information Topics Behavioral Finance | Portfolio Management : Portfolio Concepts from Capital Market Theory Credits · About the CE Program 0 CE (including 0 SER) Record credits Credits recorded Members, log in to record your credits. Manage CE Credits People who viewed this page also viewed: Credit Suisse Global Wealth Report The "Credit Suisse Global Wealth Report" is a comprehensive study of world wealth that analyzes the world’s entire 200 trillion ... More Credit Suisse Global Wealth Databook This Databook displays the detailed dataset backing the "Credit Suisse Global Wealth Report," the comprehensive study of world ... More Top Hedge Fund Investors: Stories, Strategies, and Advice This book chronicles top hedge fund investors that played key roles in the industry, including substantial information on manager sourcing, ... More Loading ...