Areas of Expertise (4)
Influence of Individual Investors on Asset Prices
Terrance Odean is the Rudd Family Foundation Professor of Finance at the Haas School of Business at the University of California, Berkeley. He is an advisory editor of the Financial Planning Review, a member of the Journal of Investment Consulting editorial advisory board and of the Russell Sage Behavioral Economics Roundtable, and is a Wall Street Journal Expert Panelist. In 2016, he received the James R. Vertin Award from the CFA Institute for research notable for its relevance and enduring value to investment professionals. He has 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 member of the Russell Investments Academic Advisory Board, a member of the WU Gutmann Center Academic Advisory Board at the Vienna University of Economics and Business, a visiting professor at the University of Stavanger, Norway, chair of the Haas Finance Group, and the Willis H. Booth Professor of Finance and Banking. As an undergraduate at UC Berkeley, Odean studied judgment and decision making with the 2002 Nobel Laureate in Economics, Daniel Kahneman.
UC Berkeley: PhD, Finance
UC Berkeley: MS, Finance
UC Berkeley: BA, Statistics
Honors & Awards (12)
James R. Vertin Award
Carleton College Alumni Distinguished Achievement Award
Barclays Global Investors Award for Best Conference Paper at European Finance Association Meetings
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
National Science Foundation Career Grant National Science Foundation Research Grant
Roger F. Murray Prize
From the Institute for Quantitative Research in Page 2 9/16/16 Finance
American Association of Individual Investors
Completed Dissertation Award
Nasdaq Foundation Dissertation Fellowship
University of California Regents Fellowship
Awarded for outstanding undergraduate accomplishment in statistics
Phi Beta Kappa
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)
Amazon and Tesla take off as small investors embrace fractional-share trading
The Wall Street Journal online
Popular companies like Tesla are getting a boost from the quarantine rise of fractional trading, popular with millennials. Prof. Terrance Odean, the Rudd Family Foundation Chair, did foundational research in how overtrading is not a good long-term strategy. But he's not that worried. “Will this encourage some speculation? Probably some,” he said. “But it’s going to be speculation with a lot less money than if people were forced to buy whole shares.”
Women and trading: Currencies, commodities, and crypto
Enterprising Investor online
It's challenging for women who want to be traders, but things are changing. The author quotes Prof. Terrance Odean, the Rudd Family Foundation Chair, who noted that there are more women in the audience now when he speaks to groups of financial advisors and that his classes now have more women.
Real Estate Investors: Know Your Resilient and Vulnerable Cities
MSN Money online
"Thus, the effect of COVID-19 on real estate, both residential and commercial, will not be evenly distributed. Cities with more resilient industries will have more resilient real estate. Cities with vulnerable industries will have vulnerable real estate," Terrance Odean, a finance professor at the University of California-Berkeley, writes in the report's preface.
Shares by the slice: Fractional investing sparks a stock market stampede
Washington Post online
Fractional investing, popularized by stock-trading apps like Robinhood and SoFi, has surged during the pandemic. Prof. Terrance Odean, the Rudd Family Foundation Chair, says the strategy might lower risk, but is an unlikely path to long-term wealth. "The very fact that they are a fraction of a share means they are rarely a lot of money,” he said. "Fractional shares make it easier to be diversified, so you probably don’t have a lot to lose on any one company. But you probably aren’t going to get rich."
The lockdown death of a 20-year-old day trader
Financial Times online
The suicide of Alex Kearns—who mistakenly believed he had lost heavily in a soured options bet he made on Robinhood—triggered calls for reform of online brokerages. Prof. Terrance Odean, the Rudd Family Foundation Chair, said more education is needed. "If it’s play money and money you can afford to lose, that’s your business. But you don’t commit suicide because you lost your play money," he said.
How Robinhood Convinced Millennials to Trade Their Way Through a Pandemic
Robinhood, the no-fee trading app known for its young user base and unicorn-level valuation, has grown quickly due to the boredom young people are feeling while stuck at home. "These are unusual times," said Prof. Terrance Odean, Rudd Family Foundation Chair.
Coronavirus Turmoil, Free Trades Draw Newbies Into Stock Market
Wall Street journal online
New traders, attracted by free trades and with time on their hands, are flocking to the markets. But Prof. Terrance Odean, the Rudd Family Foundation Chair, worries that free trades could encourage risky trading by novices. "On average, when individual investors are actively buying and selling stocks, they tend to make poor decisions," he said.
Get Ready for a Postcoronavirus World. The Economy Will Never Be the Same.
Investors still have scars from the dot-com bust, 9/11, and the global financial crisis. Prof. Terrance Odean, the Rudd Family Foundation Chair, said the coronavirus pandemic may "leave us with more realistic investors."
Women trade less often than men, with better results
Financial Times online
A seminal study on trading behaviors by Prof. Terrance Odean, the Rudd Family Foundation Chair, tested whether overconfident investors were more likely to trade shares. Because men tend to be overconfident in traditionally male-dominated arenas, such as finance, gender was used as a proxy for confidence. "We don’t find that women make better trading decisions, they just make fewer bad ones," Odean said.
Free Trading Couldn’t Have Come at a Worse Time
Wall Street journal online
Free trades, introduced late last year by Charles Schwab, are making people trade more. And that's not a good thing, according to research by Prof. Terrance Odean, the Rudd Family Foundation Chair. His work and subsequent research has shown that frequent trading driven by overconfidence leads to poorer outcomes.
Why You Shouldn’t Measure Your Success With Short-Term Results
Thrive Global online
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.
Women won't achieve true power until we start talking frankly about money
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.
Why scandals beef up bottom line
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.”
Investors' fear of flying
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.
4 (tempting) behaviors to avoid when saving for retirement
Milwaukee Business Journal online
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.
Selected Papers & Publications (6)
STEM Parents and Women in FinanceFinancial Analysts Journal
Renée B Adams, Brad M Barber, Terrance Odean
Made Poorer by Choice: Worker Outcomes in Social Security vs. Private Retirement AccountsJournal of Banking & Finance
Brad M Barber, Terrance Odean
Which Risk Factors Matter to Investors? Evidence from Mutual Fund FlowsReview of Financial Studies
Terrance Odean, Brad Barber, Xing Huang
Bubbling with Excitement: An ExperimentReview of Finance
Terrance Odean, Eduardo Andrade, Shengle Lin
The Cross-Section of Speculator Skill: Evidence from TaiwanJournal of Financial Markets
Terrance Odean, Brad Barber, Yi-Tsung Lee, Yu-Jane Liu
The Behavior of Individual InvestorsHandbook of Economics of Finance
Terrence Odean and Brad M. Barber