Ep. 329: Terrance Odean Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Michael Covel

Business, Investing

4.6 • 732 Ratings

🗓️ 23 March 2015

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

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

Jump in!

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I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms:
Twitter: @covel
Facebook: @trendfollowing
LinkedIn: @covel
Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Transcript

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0:00.0	This is Trend Following Radio, where great thinking comes alive.
0:10.9	Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.
0:21.2	I am your host, Michael Covel.
0:24.0	Not filtered, raw, honest.
0:27.3	That's my passion.
0:33.1	I know some people come to my podcast,
0:35.7	and they only want to hear about trading.
0:39.8	Now, of course, I never want anybody to go out there and do this day trading stuff and all this active craziness.
0:46.9	That's just not going to get you anywhere.
0:50.3	Day trading currencies, et cetera, all this nonsense that people just love, it just doesn't work.
0:58.8	My guest today has put the empirical data on the issue of active trading.
1:07.8	Terence O'Dine is the Rudd Family Foundation professor and chair of finance
1:12.3	at the Hoss School of Business University of California, Berkeley. He is very well known for his
1:18.0	work on behavioral finance and is definitely one of the early pioneers and to this day is still
1:24.8	actively going out there and showing through research, through empirical data, the crazy decisions that investors like to make.
1:35.9	And usually the crazy decisions that are all wrong.
1:39.4	And Terry puts data with that.
1:42.9	I've tried in my podcast over the last few years to get the best minds in the fields of
1:49.0	behavioral finance, behavioral economics on my podcast.
1:53.2	Terry O'Dine adds to that list.
1:55.7	I hope you enjoy this conversation.
2:04.3	You know, if I go to something simple, like a Wikipedia entry for you, I get the standard
	...

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