This theory simply states that there is something fundamentally different in the way investors perceive the value of a stock before and after some event. While it has been the subject of books on how to profit from timing such events, a successful strategy has not emerged because consistent informational advantage on these events is hard to obtain and hold on to. People have tried to focus on other perceived effects, such as the Friday 13th effect. To my knowledge, there is no Friday 13th effect. Timing it, however, is a whole other game, one that is very dangerous to play.
Most money managers believe they are above average.
This should puzzle anyone who knows anything about averages. However, we are not here to be puzzled, but to learn. And there is a lesson that could be taken from this. Contrarian strategies might provide excess return, and there exists some evidence of that in the finance literature. My best advice to investors is to develop a list of good stocks, and to evaluate it on a consistent basis.