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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)

Amazon and Tesla take off as small investors embrace fractional-share trading

The Wall Street Journal  online

2020-08-06

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.”

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Women and trading: Currencies, commodities, and crypto

Enterprising Investor  online

2020-07-21

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.

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Real Estate Investors: Know Your Resilient and Vulnerable Cities

MSN Money  online

2020-07-13

"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.

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Shares by the slice: Fractional investing sparks a stock market stampede

Washington Post  online

2020-07-10

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."

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The lockdown death of a 20-year-old day trader

Financial Times  online

2020-07-01

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.

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How Robinhood Convinced Millennials to Trade Their Way Through a Pandemic

Marker  online

2020-05-31

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.

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Coronavirus Turmoil, Free Trades Draw Newbies Into Stock Market

Wall Street journal  online

2020-04-29

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.

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Get Ready for a Postcoronavirus World. The Economy Will Never Be the Same.

Barron's  online

2020-04-10

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."

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Women trade less often than men, with better results

Financial Times  online

2020-04-02

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.

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Free Trading Couldn’t Have Come at a Worse Time

Wall Street journal  online

2020-03-13

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.

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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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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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