Investor behavior expert to describe investors' worst enemy

Free public lecture at UC Santa Cruz features behavioral finance authority Terrance Odean

Terrance Odean
Professor Terrance Odean studies investor behavior.

Finance professor Terrance Odean, an expert on investor behavior, is the Winter 2012 speaker in the quarterly lecture series sponsored by the Sury Initiative on Global Finance and International Risk Management (SIGFIRM) at UC Santa Cruz. SIGFIRM was founded in 2011 through a generous seed grant from UCSC alumnus Sharath Sury.

Odean will speak on "The Investor's Worst Enemy," Tuesday, February 28, 2012 from 2-3:30 p.m. in Room 180, the Simularium, in the Engineering 2 building on the UCSC campus. His lecture is free and open to the public.

Spoiler alert: the “enemy” in his lecture title is investors themselves.

Odean, the Rudd Family Foundation Professor of Finance in the Haas School of Business at UC Berkeley, has written widely on behavioral finance based on in-depth studies of individual investors, including day traders, speculators, and investment clubs. He has also studied the broader impact of the Internet on stock trading and investor behavior.

Odean’s research over the past two decades has shown that individual investors (particularly men) exhibit overconfidence, excessive trading, a tendency to follow the crowd, and stubbornness. These behaviors very often cause investors to buy high, sell low, and pay more in fees and taxes than they otherwise might. He also examines broader factors that disadvantage individual investors relative to big institutions.

Odean’s work has won several prizes, and been featured in non-academic outlets such as Forbes magazine. He embarked on his academic career relatively late in life, returning to school after dropping out of Carleton College and spending 15 years in a variety of jobs, ranging from driving cabs to programming computers. He admits to having made many of the mistakes that he now studies so intensively.

Odean's lecture is the second in the SIGFIRM quarterly lecture series that debuted last October with Hal Varian, chief economist at Google. Each quarter, SIGFIRM invites a leading figure who has contributed to the fields of economics and finance both as a researcher and a practitioner to deliver a public lecture at UC Santa Cruz on a topic of major significance to students, faculty, and professionals.