I’m back in the real world again today after having attended my first academic conference last week. It was the annual conference for the Academy of Behavioral Finance and Economics that took place at UCLA (which, if you’ve never been, is massive – and I’m not even really talking about acreage). It was definitely an interesting experience and a good opportunity to hear where the current state of academic research is in terms of trading.
To that end, here are some of the high points:
– One of the papers presented looked at trading in Taiwan stock index futures. It looked at whether traders made good decisions in terms of adding to positions. Not surprisingly, the authors found that profitable traders do a good job of adding to positions (or perhaps better stated, building positions) than losing traders.
– During the keynote address from Dr. Vernon Smith (Nobel Laureate) he brought up the fact that participants in behavioral experiments (pay-off games, etc.) have to be compensated because results are different when there is no monetary factor involved. This fits in very well with the view among traders that demo trading is very different than live trading.
– There was a really interesting panel discussion which featured fund managers who focus on using signals generated by news and social media (Twitter, etc.) content analysis.
– From the neurofinance side of things, which focuses on how our brains work in relation to trading and investing, there were a couple of interesting takeaways. I’ll follow up on this particular subject in a future post. As I noted the other day, I found Advances in Behavioral Finance, Volume II to be an excellent study in the history and current state of the field of Behavioral Finance.
Of course there were some dud papers as well. Overall, though, I found it interesting how the focus of the conference seemed to be much more toward exchange of ideas and furthering the research, which is different from my experience at trading conferences. The latter seem to be much more information presentation and socializing.