In finance, what is Cockroach Theory?

This refers to a regard that companies that news astonishing bad news to their investors competence news even some-more disastrous news in a future. It is generally used to advise investors about a odds of bigger problems emanating from companies that are not pure in their stating to investors. The speculation is named after a common regard that a participation of a singular cockroach in a kitchen expected suggests that there competence be some-more dark in a same area. Many investors competence refrain from investing in companies that have reported bad news as they design worse to follow.

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