TY - JOUR T1 - Investor Overreaction in International Stock Markets JF - The Journal of Portfolio Management SP - 102 LP - 111 DO - 10.3905/jpm.1999.319757 VL - 25 IS - 4 AU - W. Scott Bauman AU - C. Mitchell Conover AU - Robert E. Miller Y1 - 1999/07/31 UR - https://pm-research.com/content/25/4/102.abstract N2 - Many studies have found that value stocks outperform growth stocks in the U.S. and other international stock markets. Little research has been published that attempts to explain this difference in performance in international markets. The results reported in this article are based on tests of several hypotheses for over 10,000 stock returns in a ten-year period for twenty-one international stock markets. The authors find evidence that investors overreact by driving the prices of value stocks too low. It appears that investors and research analysts tend to assume that past growth rates in earnings per share will continue in the future. Yet evidence shows that extreme past growth rates tend to revert to a normal mean. Consequently, when earnings disappointments are reported, stocks previously considered to be growth stocks tend to produce lower returns than value stocks. ER -