Investors usually give some companies with good track records the benefit of the doubt when the companies' performance fails to meet the market expectation.

Question

Quizplus · Accepted Answer

Investors often believe that companies with a history of strong performance can weather short-term setbacks, and may be more willing to hold onto their shares or even buy more during a dip in performance. This is known as having a "buffer of goodwill." However, it is important to note that this is not always the case, and investors may react negatively to sustained underperformance.

Investors Usually Give Some Companies with Good Track Records the Benefit