Timely Loss Recognition Helps Nothing

This paper digests the relationship between manipulation of losses and price reversals in Chinese stock market. Timely loss recognition is involved detecting losses, while are investigated by momentum profit. In addition, two-way sorting portfolios employed to connect manipulating with reversals. Companies low timely aggressively manipulate their our results indicate that they generate much more significantly negative profits. As a consequence, cannot build up any immunity against reversal risks encounter higher than other companies. Such findings still hold after risk adjustments using asset pricing models come into play when controlling for calendar effect. research indeed suggests investors should exercise caution dealing companies whose financial information too positive. may dress reports, thereby increasing associated