Free Online Lecture: How Behavioral Biases Influence Financial Decisions

Dillon (Mr. Vintage Value Investing) | January 15, 2016 | Value Investing | No Comments

The investor’s chief problem – and even his worst enemy – is likely to be himself.Benjamin Graham, The Intelligent Investor

I just came across this free upcoming online “Master Class” being offered by IvyExec, which will be held on Monday, January 18th at 12:00 PM – 1:15 PM EST.

In the class, Dr. Kevin Spellman will provide names, definitions, and many examples of how behavioral biases negatively impact financial decisions. Understanding these behavioral biases is the first step to overcoming them and improving performance, and for capitalizing on inefficiencies in the financial markets.

Dr. Spellman is a Senior Lecturer at IE Business School, which is a top 5 European business school.

The class will specifically show how behavioral biases influence expectations and forecasts, investment strategies, market prices, earnings revisions, and surprises. A comprehensive example of how biases impact an individual’s reluctance to sell losers will be explored, as well as suggestions to improve the decision-making process.

Behavioral biases the class will explore include:

Representativeness

The representativeness heuristic is a decision-making shortcut that employs the use of past experiences to guide the decision-making process.

Availability

A mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method, or decision.

Overconfidence

A well-established bias in which a person’s subjective confidence in his or her judgments is reliably greater than the objective accuracy of those judgments, especially when confidence is relatively high.

Anchoring

A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.

Loss aversion

Loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains.

The class is completely free. Click below to register:

About the Presenter

Dr. Kevin Spellman,
Senior Lecturer – IE Business School

Dr. Kevin Spellman describes himself as a pracademic – he has professional and academic experiences. He is a Senior Lecturer and Director of the Investment Game at IE Business School and a Senior Lecturer and the Director of the Investment Management Certificate Program at the University of Wisconsin-Milwaukee. Students refer to him as “Coach” as he coaches investment analysts.

Since 2000, Spellman’s academic pursuits have been in investments, including security analysis through portfolio management. His research focuses on issues related to behavioral finance, investment strategy, and asset pricing. He has taught various courses in financial management, investments, behavioral finance, CFA review, value investing, and forensic accounting, and he has directed / led student investment programs at IE Business School, University of Wisconsin-Milwaukee, University of Wisconsin-Madison, and The Ohio State University.

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