My guest today is Terrance Odean, the Rudd Family Foundation Professor and Chair of the Finance Group at the Haas School of Business, University of California, Berkeley. Odean has extensively researched into the empirical data on active trading. He is very well-known for his work in behavioral finance and is once of the early pioneers.
The topic is his extensive research into the empirical data on active trading.
In this episode of Trend Following Radio we discuss:
- Odean describes his work
- How Odean started his work looking at individual broker statements
- The disposition effect
- How Odean was able to get individual investor data when he was starting out
- Looking at early thinkers in the arena of behavioral finance
- Why people buy low and sell high
- Why statistics are one of the best ways to understand what’s going on in the market
- The difference between male and female investors
- Why overconfidence hurts investors
- Attention and how we make decisions
- Why a simple heuristic from Seinfeld could be the best way for most investors
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