long term reversal & overreaction as driver

i need a speech script ^^^ try to use easy pronunciation language

Baseline Strategy (long term reversal/contrarian) thoroughly researched, and proven to yield a robust profit. State the baseline strategy. Define the baseline strategy. Discuss the origin of the baseline strategy or/and research on it. Discuss recent studies and premia reported. more than 4 references. ~2 minutes.

main Drivers (overreaction) Explain driver. Risk or behavioral arguments? Economic mechanism linking the driver to the premium. Theoretical or empirical studies? Methodologies used to show the effect of the driver. Discuss the main driver. Explain reasons for selecting the main driver. 3 to 6 references. . ~8 minutes.

Every argument must be backed up by the literature.

Must confirm data availability.

You can read articles published in any peer-reviewed journals such as: Journal of Finance, Journal of Financial Economics, Review of Financial Studies (Best) Journal of Financial and Quantitative Analysis, Review of Asset Pricing Studies, Journal of Empirical Finance, Management Science, Journal of Financial Markets (Good) Journal of Portfolio Management, Financial Analyst Journal (Practitioner)

Work-in-progress research articles can be found on/via:

Social Science Research Network (SSRN) Google Scholars

Pay attention to the format of the research articles and data sources. Your presentations will be structured in the same way.

Start from the most recent research papers as they will provide the literature review in the introduction.

Instructions

Topic: Baseline Strategy & Main Driver

Part 1: Baseline Strategy Long-Term Reversal (Contrarian)

(This corresponds to Baseline Strategy 10 points in the instruction slides)

Please cover the following in this order and keep it simple and clear:

1. State the baseline strategy clearly

• The baseline strategy is a long-term contrarian (long-term reversal) strategy.
• Explain that it buys stocks with poor long-term past performance and sells stocks with strong long-term past performance.

1. Define how the strategy works

• Mention typical horizons (e.g. 1-3 years).
• Long: long-term losers
• Short: long-term winners
• Emphasize that the strategy relies on price reversals over long horizons.

1. Discuss the origin of the strategy

• Explain that the strategy originates from early behavioral finance research.
• Key idea: investors tend to overreact to long-term bad or good news, pushing prices too far away from fundamentals.

1. Briefly mention empirical evidence

• State that academic studies document long-term reversal effects across equity markets.
• Keep this high-level (no equations, no technical details).

Use more than 4 academic references and show authors last names + year .

Part 2: Drivers of the Baseline Strategy Overreaction as the Main Driver

(This corresponds to Drivers 30 points in the instruction slides)

Please structure this section exactly as follows:

1. List potential drivers of long-term reversal

• Investor overreaction
• Risk-based explanations
• Market frictions (e.g., limits to arbitrage)

1. Explain each driver briefly

• One sentence per driver is enough.
• Do NOT go deep into math or models.

1. Identify the main driver: Investor Overreaction

• Clearly state that investor overreaction is the main driver we focus on.

1. Explain the economic mechanism (very important)

• Investors overweight long-term past performance.
• They extrapolate bad news too far into the future.
• Prices move away from fundamental value.
• Over time, prices correct long-term reversal.

1. Explain why we select overreaction as the main driver

• Strong behavioral intuition.
• Consistent with long-horizon reversal evidence.
• Widely supported by empirical and behavioral finance literature.
• Provides a clear foundation for later strategy modification.

Use 6 academic references.

Clearly state whether arguments are behavioral (they are).

Make sure everything is supported by acdamic papers!