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Richard Peterson: This is your brain on the markets
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AT-November 2007-7
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An author's new book discusses how to recognize and exploit when traders are succumbing to deep-seated psychological biases.
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Detailed Description
If you have ever posted a message about stocks on the Internet, you may have helped Richard Peterson make money. When Peterson was in medical school at the University of Texas in the late 1990s, he analyzed language on stock message boards and used it to time the market. Peterson believed investors let emotions drive their decisions. At that point, Internet stocks often rallied the week before earnings releases and then fell after the news hit the Street. For Peterson, this was psychology 101 investors overreacting in anticipation of earnings.
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