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Terrance Odean - Haas School of Business, University of California, Berkeley. Berkeley, CA, US

Terrance Odean Terrance Odean

Professor | The Rudd Family Foundation Chair | Haas School of Business, University of California, Berkeley

Berkeley, CA, UNITED STATES

Social

Areas of Expertise (4)

Influence of Individual Investors on Asset Prices Investor Behavior Behavioral Finance Investor Welfare

About

Terrance Odean is the Rudd Family Foundation Professor of Finance at Berkeley Haas. As an undergraduate at Berkeley, Odean studied Judgment and Decision Making with the 2002 Nobel Laureate in Economics, Daniel Kahneman. This led to his research focus on how psychologically motivated decisions affect investor welfare and securities prices.

He is a Member of the Journal of Investment Consulting editorial advisory board; the Russell Sage Behavioral Economics Roundtable; and the WU Gutmann Center Academic Advisory Board at the Vienna University of Economics and Business. He has also been an Editor and an Associate Editor of the Review of Financial Studies; an Associate Editor of the Journal of Finance; a Co-editor of a special issue of Management Science; an Associate Editor at the Journal of Behavioral Finance; a Director of UC Berkeley’s Experimental Social Science Laboratory; a Visiting Professor at the University of Stavanger, Norway; and the Willis H. Booth Professor of Finance and Banking and Chair of the Finance Group at Berkeley Haas.

Education (3)

UC Berkeley: PhD, Finance

UC Berkeley: MS, Finance

UC Berkeley: BA, Statistics

Honors & Awards (12)

James R. Vertin Award

CFA Institute

Carleton College Alumni Distinguished Achievement Award

2012

Barclays Global Investors Award for Best Conference Paper at European Finance Association Meetings

Moscow 2005

Barclays Global Investment / Michael Brennan Prize for the Best Paper of the year (2001) in the Review of Financial Studies Graham and Dodd Award of Excellence

2000

National Science Foundation Career Grant National Science Foundation Research Grant

(SES-0111470)

Roger F. Murray Prize

From the Institute for Quantitative Research in Page 2 9/16/16 Finance

American Association of Individual Investors

2007

Completed Dissertation Award

Award

Nasdaq Foundation Dissertation Fellowship

Fellowship

University of California Regents Fellowship

Fellowship

Departmental Citation

Awarded for outstanding undergraduate accomplishment in statistics

Phi Beta Kappa

Honor Society

Selected External Service & Affiliations (3)

  • Executive Director, Experimental Social Science Laboratory, UC Berkeley
  • Editor, Review of Financial Studies
  • Ad Hoc Referee for: The American Economic Review, The Quarterly Journal of Economics, The Journal of Finance, The Review of Financial Studies, The Journal of Financial Economics, The Journal of Financial and Quantitative Analysis, Journal of Financial Markets, The Financial Analyst’s Journal, The Journal of Business, The Accounting Review, Scandinavian Journal of Economics, The Journal of Psychology and Financial Markets, Journal of Economics and Business, Financial Services Review, Economic Letters, Naitonal Science Review, European Finance Review, Economica, North American Journal of Economics and Finance, Journal of Banking and Finance

Positions Held (1)

At Haas since 2001

2008 – present, The Rudd Family Foundation Chair
2006 – 2008, Willis H. Booth Chair in Banking and Finance I
2005 – 2006, Professor, Haas School of Business
2003 – 2005, Associate Professor, Haas School of Business
2001 – 2003, Assistant Professor, Haas School of Business
1997 – 2001, Assistant Professor, Graduate School of Management, UC Davis

Media Appearances (15)

Why You Shouldn’t Measure Your Success With Short-Term Results

Thrive Global  online

2019-08-27

The article cites work by Prof. Terrance Odean, Rudd Family Foundation Chair, which found that thousands of investors hold onto stocks that underperform the market and sell stocks that outperform the market because of an emotional impulse to avoid immediate loss.

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Women won't achieve true power until we start talking frankly about money

Newsweek  online

2019-08-13

Women get the message from society that they aren't good investors because they're too cautious. But academic research, including a paper by Prof. Terrance Odean, Rudd Family Foundation Chair, has shown that women's risk-adverse strategy can be winning over the long term. He found men often fall prey to impatience and overconfidence, making them trade 45 percent more than women, who tended to be buy-and-hold investors.

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Why scandals beef up bottom line

OZY  online

2019-06-21

Companies hit by scandals may take bold measures in their efforts to reform. But despite that, investing in scandalous companies is not necessarily a good strategy. “The results could be a statistical fluke,” said Prof. Terrance Odean, Rudd Family Foundation Chair. “I wouldn’t bet my pocketbook.”

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Investors' fear of flying

OZY  online

2019-06-21

A few things are making small traders wary these days, including a growing realization that just because there's a lot of information out there, they may not know everything they need. “If you give the average investor all the data for a company, can they do the same fundamental analysis as a guy who went through a Ph.D. program and works at Goldman Sachs? It’s just an illusion of a level field," said Prof. Terrance Odean, Rudd Family Foundation Chair.

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4 (tempting) behaviors to avoid when saving for retirement

Milwaukee Business Journal  online

2019-06-01

In a diversified portfolio, investors are often tempted to adjust exposure in favor of the best-performing asset classes. The problem is, acting on that temptation may cost them. According to research by Terrance Odean, Rudd Family Foundation Professor of Finance, constant portfolio adjustment results in underperformance.

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Like the flu, you can survive market volatility

Herald Tribune  online

2019-05-17

Patient investors with a buy-and-hold philosophy view volatility like the flu; it's not pleasant but it's something you have to go through every once in a while. The benefits of this approach are backed up by research by Prof. Terrance Odean, Rudd Family Foundation Chair, who found that investors who trade frequently earned a return well below that of those who held long-term.

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‘Smart Beta’ Might Not Be So Smart After All

Bloomberg Opinion  online

2019-05-08

Risk is fickle, and in order for something to really be a risk, investors have to be afraid of it. Prof. Terrance Odean, Rudd Family Foundation Chair researched mutual fund flows to find the factors that tended to repel investors, who usually flock to whatever fund has been performing the best. Only one factor was found: market risk as measured by the Capital Asset Pricing Model.

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Marriage, divorce or buying a home can be costly distractions for investors

The Irish Times  online

2019-05-07

Distraction can influence investment return, and research by Prof. Terrence Odean, Rudd Family Foundation Chair, has shown that ordinary investors tend to be drawn towards “attention-grabbing” companies – stocks that are in the news or that are experiencing unusually high trading volumes or returns.

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Why investors are careful buyers but careless sellers

The Economist  online

2019-04-27

Work by Prof. Terrance Odean, Rudd Family Foundation Chair, has found men often fall prey to impatience and overconfidence, making them trade 45 percent more than women, who tended to be buy-and-hold investors.

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Asked and Answered: Questions to Ask If You’re Considering Day Trading

Hacked  online

2019-04-24

Going it alone is probably a recipe for disaster for day traders. A study of 66,000 U.S. households by Prof. Terrance Odean, Rudd Family Foundation Chair, found that frequent traders under-performed investors who buy and hold by nearly a third. They also found that the more frequently a participant traded, the more they under-performed the study average.

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Consider firing your male broker

New York Times  online

2019-01-15

Roughly less than 20 percent of financial advisers are women, a number that has barely budged for the past two decades. But research by Prof. Terrance Odean, Rudd Family Foundation Chair, has found women take fewer investment risks, for generally better returns.

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Tony Robbins: 5 money mistakes investors need to avoid in today's choppy market

CNBC  online

2019-01-05

One mistake investors make is overconfidence. Work by Prof. Terrance Odean, Rudd Family Foundation Chair, has found men often fall prey to impatience and overconfidence, making them trade 45 percent more than women, who tended to be buy-and-hold investors.

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Forget logic. Investment is driven mostly by emotion

Irish Times  online

2018-12-11

Investors feel good when they sell a stock for a profit, whereas selling a stock at a loss is associated with negative emotions, according to work by Prof. Terrance Odean, Rudd Family Foundation Chair. But the magnitude doesn't matter: fund managers seem to think a win is a win, so extremely large gains were not associated with a greater likelihood of repurchase than modest gains.

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What A Midsummer Night’s Dream teaches you about investing

MoneyWeek  online

2018-12-07

Amateur investors tempted to manage their own portfolio directly to avoid the fees associated with brokerages or online trading platforms can end up reducing their returns through elementary mistakes such as overtrading, according to research by Prof. Terrance Odean, Rudd Family Foundation Chair.

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The financial industry is ever more concerned about parity

Finance et Investissiment (French link)  online

2018-10-26

In order to attract more women to the sector, there should be university outreach as well as outreach to companies to make clear the benefits of having a more equal gender balance.Terrance Odean, Rudd Family Foundation Chair, did seminal work on what influences gender parity at companies.

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Selected Papers & Publications (6)

STEM Parents and Women in Finance Financial Analysts Journal

Renée B Adams, Brad M Barber, Terrance Odean

2018

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Made Poorer by Choice: Worker Outcomes in Social Security vs. Private Retirement Accounts Journal of Banking & Finance

Brad M Barber, Terrance Odean

2018

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Which Risk Factors Matter to Investors? Evidence from Mutual Fund Flows Review of Financial Studies

Terrance Odean, Brad Barber, Xing Huang

2016

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Bubbling with Excitement: An Experiment Review of Finance

Terrance Odean, Eduardo Andrade, Shengle Lin

2016

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The Cross-Section of Speculator Skill: Evidence from Taiwan Journal of Financial Markets

Terrance Odean, Brad Barber, Yi-Tsung Lee, Yu-Jane Liu

2014

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The Behavior of Individual Investors Handbook of Economics of Finance

Terrence Odean and Brad M. Barber

2013

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