Get Genetic Screening for Your Financial Advisor?
What accounts for the persistence in diversity of investor beliefs and behaviors? Why does logical inference from common data not drive common attitudes and actions? In their March 2011 paper entitled “Serotonin and Risk Taking: How Do Genes Chan...
Prelude to Panic?
Are there internal or external signals that predict financial market panic attacks? In the February 2011 revision of their paper entitled “Predicting Economic Market Crises Using Measures of Collective Panic” (flagged by a reader), Dion Har...
Mutual Fund Investors Causing Their Own Demise? [PREMIUM]
Do mutual fund investors in aggregate exhibit good, bad or indifferent market timing? In their January 2011 article entitled “Past Performance is Indicative of Future Beliefs”, Philip Maymin and Gregg Fisher investigate how the aggregated t...
A Few Notes on Trading the Trader
In his 2010 book Trade the Trader: Know Your Competition and Find Your Edge for Profitable Trading, author Quint Tatro observes that "...what most investors don’t understand as they start to learn their basic technical patterns...is they are the ones...
Total Fear Premium [PREMIUM]
Is aggregate equity investor fear multifaceted? In the August 2010 version of his paper entitled "The Equity Fear Premium and Daily Comovements of the S&P 500 E/P ratio and Treasury Yields before and during the 2007 Financial Crisis", Christophe Fa...
A Few Notes on What Investors Really Want
Author Meir Statman states that his 2010 book What Investors Really Want "is about what we want from our investments. It is about how we think about our investments, how we feel about them, and how investment markets drive us crazy as we try to cajole ...
Seeking Confirming Opinions Rather Than Information?
...experimental evidence indicates that participation in stock message boards/forums increases a typical investor's propensity to trade and decreases actual investment performance. Investors may want to factor this effect into their information search and processing practices.
The Lure of Trading at the Open?
...evidence from a fairly large recent sample of U.S. stocks indicates that traders may be able to suppress trading friction by systematically executing sales at the open and buys later in the trading day.
Investors Playing the Lottery Instead?
How much individual investing is lottery-like, just hoping for a big score with no analysis? In their June 2010 paper entitled “Natural Experiments on Individual Trading: Substitution Effect Between Stock and Lottery”, Xiaohui Gao and Tse-Chun Lin relate individual trading activity to national lottery jackpot size in Taiwan. Using twice-weekly lottery jackpots and contemporaneous Taiwan...
Visualized Experience Versus Numerical Statistics
...evidence from laboratory experiments indicates that simulated experience, especially with graphical display of results, instills a more realistic grasp of investment choices than does exposure to numerical statistics.
Underestimation of Wildness?
In the opening paragraphs of his April 2010 article entitled “Traditional vs. Behavioral Finance”, Robert Bloomfield handicaps his subject contest as follows:
“The traditional...
Read the entire article at the CXO blog!
Read the entire article at the CXO blog!
A Few Notes on The Little Book of Behavioral Investing
...The Little Book of Behavioral Investing is a broad survey of behavioral biases and countermeasures as related to financial markets, especially for value investors. The self-awareness espoused may...
Read the entire article at the CXO blog!
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Read the entire article at the CXO blog!
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