Most investors suspect that market psychology - such as cycles greed and fear - influences asset prices, but there is little systematic research into why this occurs and how traders can take advantage of it. Evidence from the emerging field of sentiment analysis demonstrates the importance of media and information flow in fueling price patterns such as overreaction and under-reaction. Sentiment refers to the feelings, attitudes, and beliefs of investors, and in this talk we demonstrate evidence that the sentiments evident in news and social media, and extracted through text analytics, can significantly lead price action. This talk will help attendees:
• See how universal human neurocircuitry predisposes investors to collective risk-related behavioral patterns.
• Identify the information characteristics that trigger crowds to overreact or under-react to news.
• Learn how professionals are taking advantage of media sentiment across asset classes in strategies based on news momentum, trend-following, value investing, and bubble-timing.
• Understand when you should invest along with the herd, anticipate a turning point, and when it is best to take a contrarian approach
• Use tools based on sentiment research to improve investment decision making
About our Speaker
Richard L. Peterson is CEO of MarketPsych (www.marketpsych.com), a behavioral finance boutique that - in partnership with Thomson Reuters - produces the global standard in financial sentiment data derived from textual analysis of global news and social media. As portfolio manager for the outperforming MarketPsy Long-Short Fund LP from 2008-2010, he developed and traded on psychology-based quantitative models. In the educational field he developed popular financial personality tests, published widely in academic textbooks and journals including Games and Economic Behavior and Journal of Neuroscience, and is an associate editor of the Journal of Behavioral Finance. His latest book "Trading on Sentiment" (Wiley) is out March 2016. His prior books, "Inside the Investor's Brain" (Wiley, 2007) and "MarketPsych" (Wiley, 2010) were both named top financial books of the year by Kiplinger. Dr. Peterson received cum laude Electrical Engineering (B.S.), Arts (B.A.), and Doctor of Medicine degrees (M.D.) from the University of Texas. Called "Wall Street's Top Psychiatrist" by the Associated Press, he performed postdoctoral neuroeconomics research at Stanford University and is Board-certified in Psychiatry.
Date, Time + Location
Wednesday, March 23rd
Noon - 1:30 - Lunch included
CFA Classroom - 6th Floor
235 Montgomery Street,
San Francisco, CA 94104
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