.. in relation to investment decisions
2006-08-15 01:28:14 · 9 answers · asked by katrina_ponti 6 in Business & Finance ➔ Investing
oh my! .. where are the financial experts?? please rescue me..
2006-08-15 03:21:36 · update #1
Perfect certainty is an imperfectly defined concept. As was once stated so succintly, "The only certainties are death and taxes"; so it is with anticipated events.
If you will notice, when there is a buy out offer for a company the stock of the company receiving the offer seldom trades at the buy out price. Sometimes it trades at a price less, sometimes significantly less, than the offered price. Sometimes it even trades for more than the offered price in anticipation of even a better offer.
I might even be tempted to take issue with the statement "fully anticipated". There are indeed anticipated events, but I would doubt seriously that they are ever fully anticipated. There are normally in markets quite a few individuals on both sides of an anticipated event.
2006-08-15 06:18:24 · answer #1 · answered by Anonymous · 1⤊ 0⤋
There is a difference. Fully anticipated means that a certain event is fully priced into the value of a stock (or other investment). But, that doesn't mean that the event will happen. The most common examples are earnings estimates and earnings reports. Most companies have a level of earnings that wall street in aggregate expects them to acheive - this is what is anticipated. But it is not certain - in actuality they might report something very different and then the share price would move up or down, depending on whether it is an upside or downside surprise.
2006-08-15 09:28:40 · answer #2 · answered by VC 2 · 1⤊ 0⤋
Big difference. Fully anticipated means that the markets or share prices reflect certain events in the future. The event is anticipated by the markets/shares and prices have adjusted accordingly. Still when the event takes place the market recacts. Even though it was "fully anticipated" the event may not be exactly what some thought it to be.
In perfect certainty there is no margin for error, therefore nothing to react to when the event takes place.
2006-08-15 08:56:31 · answer #3 · answered by Adios 5 · 0⤊ 0⤋
Yes. If something was known in advance with certainty, the prices would react in one fell swoop before the fact. If something was fully anticipated, prices would still react before the fact, but the reaction would be far from instantaneous. In the now-classic 1969 study by Fama, French, Jensen, and Roll, stock prices were shown to anticipate stock splits by steadily outperforming the market for 30 months before the split.
2006-08-15 11:36:41 · answer #4 · answered by NC 7 · 0⤊ 0⤋
Yes, there is a difference. Fully anticipated, is where based on history and pattern, a given outcome will logically occur....however, that doesn't mean, that outcome WILL actually occur, just that the predicted outcome is the logical outcome based on everything known. perfect certainty means that a given outcome is already known will occur with no chance of it not happening. Simplified answer but understandable.
2006-08-15 11:04:27 · answer #5 · answered by typicalguy 2 · 0⤊ 0⤋
Yes.There are always events that can not be anticipated ;so I think there is no fully anticipated events which is certain.
2006-08-15 10:17:37 · answer #6 · answered by Mehdi H 1 · 0⤊ 0⤋
'Perfect certainty' in investment? Are you kidding....their ain't no such horse!
Low yield, low risk: high yield high risk....that is the only certainty when playing the markets...
2006-08-15 08:54:01 · answer #7 · answered by Ichi 7 · 0⤊ 0⤋
Yup. You never know what's going to happen till it does . . . and even then you can't be sure what it is that's happening.
2006-08-15 09:55:56 · answer #8 · answered by beast 6 · 0⤊ 0⤋
ideal scenario rareest occurances
2006-08-15 08:32:50 · answer #9 · answered by big b 5 · 0⤊ 0⤋