GUTMANN CENTER FOR PORTFOLIO MANAGEMENT at the University of Vienna - http//:www.gutmann-center.at invites to the following PUBLIC LECTURE: (Apologies for any cross-listings!): Date: December 5th, 2005 - 4.00 p.m. Location: Bank Gutmann AG, Schwarzenbergplatz 16, 1010 Wien Speaker: Prof. Dr. Terrance ODEAN (www.odean.org) Haas School of Business at the University of California, Berkeley Title: "INVESTOR BEHAVIOR AND MARKET EFFICIENCY" Abstract: Professor Terrance Odean will present his research on how psychological biases and decision heuristics affect the trading of individual investors and the impact of this trading on investor welfare and market efficiency. Analyzing the trading records of hundreds of thousands of individual and institutional investors, Professor Odean finds that individual investors tend to trade too frequently, hold onto their losing investments, and buy stocks that are in the news. Psychological motivations for these behaviors are overconfidence, a desire to avoid feeling regret, and the limits of human attention. Investors, especially those who have experienced recent success, are likely to be overconfident about their abilities. Overconfidence leads to excessive trading and lower returns. The stocks that individual investors buy tend to subsequently under-perform those they sell. Active investors tend to under-perform buy-and-hold investors. Men, who tend to be more overconfident than women, trade 45% more actively than women thereby hurting their net returns. And investors who switch to online trading tend to trade more actively, more speculatively, and less successfully after going online. And investors tend to buy stocks that are in the news, irrespective of whether the news is good or bad. These trading behaviors lead to substantial reductions in portfolio returns for individual investors. Furthermore, the trading of individual investors forecasts future asset returns. About Terrance Odean: Terrance Odean (www.odean.org) is Professor of Finance at the Haas School of Business, University of California, Berkeley. He is director of UC Berkeley’s Experimental Social Science Laboratory, associate editor of The Review of Financial Studies, and a member of the Russell Sage Behavioral Economics Roundtable. Professor Odean is an internationally highly respected scholar in the field of behavioral finance. His research focuses on the implications of overconfidence on investment behavior. It has been cited in The Wall Street Journal, The New York Times, The L.A. Times, The Washington Post, The International Herald Tribune, Time, Newsweek, U.S. News and World Report, Barron's, Forbes, Business Week, Smart Money, Bloomberg Personal, Worth, Kipplinger's Personal Finance, and several other publications. Professor Odean earned a B.A. in Statistics at the University of California, Berkeley in 1990 and a Ph.D. in Finance from the Haas School of Business in 1997. He held a position at the Graduate School of Management, University of California Davies and returned to the Haas School in 2001. Please REGISTER: Mail: gutmann.bwl(a)univie.ac.at Phone: +43-1-4277-38186 - Fax: +43-1-4277-38074 Contact and further information: Gutmann Center for Portfolio Management University of Vienna - Mag. Dorothea GRIMM Bruenner Str. 72 - A-1210 Wien phone: +43-1-4277-38186 - fax: +43-1-4277-38074 mail: gutmann.bwl(a)univie.ac.at - web: www.gutmann-center.at