PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

When an event which impacts on the profitability of a listed company is fully reflected in its share price, we say that is has been fully discounted. Events which impact the profitability of a listed company are taken into account by investors in their investment decisions. This causes this price rise or fall in recognition of the changed earnings and dividend prospects. Sometimes, however investors as a group fail to appreciate the full impact of such an event and so it is either partially discounted or not discounted at all. Obviously, in such circumstances, there can exist an opportunity for a private investor to buy the share before the full significance of the event is appreciated and discounted by investors as a group.

Edit Glossary Term