Behavioral Finance

///Behavioral Finance

Alternative Beta can be Great: But Beware of Data-Mining!

By |2017-08-18T17:10:40-04:00May 9th, 2016|Research Insights, Behavioral Finance|

Quantifying Backtest Overfitting in Alternative Beta Strategies Antti Suhonen, Matthias Lennkh, and Fabrice Perez A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap [...]

How Testosterone and Stress Affect Financial Decision-Making

By |2017-08-18T17:03:31-04:00May 3rd, 2016|Behavioral Finance|

Decision Making, Financial Risk Aversion and Behavioral Biases: The Role of Testosterone and Stress Nofsinger, Patterson and Daigler A version of the paper can be found here Want a summary of academic papers with alpha? Check [...]

Computers Still Beat Humans? We Ask, Will Grove Responds.

By |2017-08-18T17:07:56-04:00April 21st, 2016|Behavioral Finance|

Overconfidence is the death of everything in investing. I suffer from the problem just like everyone else because last time I checked...I'm human. As humans, we need to face the reality of overconfidence. Overconfidence is like [...]

Recreating Asset Bubbles in the Laboratory

By |2017-08-18T16:58:00-04:00March 29th, 2016|Research Insights, Behavioral Finance, Momentum Investing Research|

Are we in a bubble? It depends on what asset class you’re referring to, whom you ask, and what you mean by “bubble.” We’ve posted before on how some great finance minds define bubbles, and [...]

Why do academic researchers avoid behavioral finance?

By |2017-08-18T16:52:14-04:00March 11th, 2016|Behavioral Finance|

Charlie Munger, Warren Buffett's right-hand-man and Vice Chairman of Berkshire Hathaway, has said the following regarding behavioral economics: How could economics not be behavioral? If it isn’t behavioral, what the hell is it? Apparently, academic researchers [...]

Chasing Returns and Avoiding “Spaghetti against the Wall Fund Companies”

By |2017-08-18T17:08:13-04:00February 20th, 2016|Behavioral Finance|

Psychology research suggests that when we make predictions, we suffer from “representative bias,” and mistakenly overweight observations that fit a particular narrative, and fail to consider base rate probabilities. For example,  if we flip a coin 5 times [...]

Shocking: Your Experience in the Uterus May Influence Your Investment Decisions!

By |2017-08-18T16:57:00-04:00February 16th, 2016|Research Insights, Behavioral Finance|

The Fetal Origins Hypothesis in Finance: Prenatal Environment, the Gender Gap, and Investor Behavior Cronqvist, Previtero et al. A version of the paper can be found here. Want a summary of academic papers with alpha? Check [...]

Media Coverage and Stock Returns

By |2017-08-18T17:00:55-04:00February 9th, 2016|Research Insights, Behavioral Finance, Momentum Investing Research|

Ninety Years of Media Coverage and the Cross-Section of Stock Returns Hillert and Ungeheuer A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap [...]

Can A Brutal Stock Market Make You Physically Sick?

By |2017-08-18T17:08:32-04:00February 6th, 2016|Research Insights, Behavioral Finance|

Worrying About the Stock Market: Evidence from the Hospital Admissions Engelberg and Parsons A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap [...]

The most concise explanation of behavioral finance I’ve ever seen

By |2017-08-18T16:55:27-04:00January 29th, 2016|Research Insights, Behavioral Finance|

One of the most overused-- and misunderstood -- terms I've seen used by finance practitioners is "behavioral finance." Many professionals consider themselves to be "behavioral finance experts" because they identify irrational investors.1 Newsflash: Identifying irrational investors is not [...]

Are Stock Pricing Anomalies Driven by Risk or Mispricing?

By |2017-08-18T17:10:07-04:00December 15th, 2015|Research Insights, Behavioral Finance|

Anomalies and News Engelberg, McLean and Pontiff A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap Category. Abstract: Using a sample of 97 [...]

The Secrets of Social Influence: An Interview With Digg and Wharton Professor Jonah Berger

By |2017-08-18T16:55:12-04:00December 8th, 2015|Interviews, Behavioral Finance|

A critical element of being a good investor is understanding human behavior. In this piece we take our focus away from quantitative finance and focus on understanding the secrets of social influence. And while this piece may not [...]

Beware of Target Date Funds – Their Aim May be Way Off

By |2017-08-18T17:09:18-04:00November 3rd, 2015|Guest Posts, Behavioral Finance|

We like to use rules of thumb, or heuristics, when facing choices.  We often default to rules of thumb because when finding the optimal choice is difficult, rules of thumb allow us to solve a [...]

All firms can benefit from the positive influence of women

By |2017-08-18T17:10:44-04:00October 29th, 2015|Behavioral Finance|

Marisa Mayer’s recent announcement that she is again pregnant, and does not plan to take maternity leave after her twins arrive, has once again raised the age-old question about how far women have really come [...]

How Market Volatility Affects Our Brains

By |2017-08-18T17:03:35-04:00September 2nd, 2015|Behavioral Finance, $vxx, Tactical Asset Allocation Research|

The current market volatility is justifiably causing people stress. Nobody wants to see their hard-earned wealth get vaporized. But how does increased stress affect decision-making? A recent paper published in the Proceedings of the National Academy [...]

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