Leitura do Dia - Sports Sentiment and Stock Returns

Sports Sentiment and Stock Returns
Alex Edmans, Diego Garcıa, and Øyvind Norli
ABSTRACT
This paper investigates the stock market reaction to sudden changes in investor mood. Motivated
by psychological evidence of a strong link between soccer outcomes and mood, we
use international soccer results as our primary mood variable. We find a significant market
decline after soccer losses. For example, a loss in the World Cup elimination stage leads to
a next-day abnormal stock return of −49 basis points. This loss effect is stronger in small
stocks and in more important games, and is robust to methodological changes. We also
document a loss effect after international cricket, rugby, and basketball games.

The Journal of Finance, Volume 62: Issue 4, August 2007