Predicting Market Prices with Sentiment Analysis of Social Media
(*Teleconferenced to the Santa Barbara Club)
Tuesday, June 21st, 2011
12:00 pm - 1:30 pm
Richard L. Peterson, MD
Chair: Dan Pomerantz, CFA
An Applied Behavioral Finance Group Event
This event is sponsored by the Applied Behavioral Finance Group (ABFG). The mission of ABFG Los Angeles is "To identify, evaluate, and disseminate information and activities in the field of behavioral finance. Our objective is to enhance collaboration between research and practitioners in order to produce practical applications of value for investor and professionals who serve them."
With the advent of the internet, it is now possible to gather and measure the impact of online news and social media on stock prices. Over the past seven years MarketPsych built a software architecture to monitor and analyze those sentiments known to be predictive of financial risk-taking behavior. For example, sentiments such as fear and joy, tones such as uncertainty and urgency, and topics such as earnings and product releases have been quantified by our software for all U.S. stocks and ETFs over the past 13 years. We analyzed the impact of such sentiments on market price volatility and direction, and for over two years used them to guide investments at the outperforming MarketPsy Long-Short Fund LP. In this talk Richard L. Peterson, M.D. will discuss the findings of our sentiment research. Contrarian investment models will be discussed, including the optimal timing of "buying on fear" and "selling on greed" strategies. In addition, a tool developed to identify the presence of speculative bubbles, and timing their demise, will be discussed as it relates to today's market.
Richard L. Peterson MD has spent his career working at the intersection of mind and markets. His firm MarketPsych Data (www.marketpsychdata.com) identifies predictive sentiments for U.S. stocks and ETFs through textual analysis of financial social media, news, and earnings conference calls. He co-founded MarketPsych LLC (www.marketpsych.com) which trains financial professionals in the use of psychological insights to improve their investment decisions and strengthen client relationships. He is a registered investment adviser and was previously managing director of MarketPsy Capital LLC, a psychology-based asset management firm (www.marketpsy.com) from 2008-2010. His financial psychology research has been published in leading academic journals, textbooks, and profiled in the financial media including CNBC, the Wall Street Journal, the Financial Times, and the BBC. His book, “Inside the Investor’s Brain” (Wiley, 2007), was praised as “outstanding” in Barrons. Dr. Peterson is an associate editor of the Journal of Behavioral Finance and has published academic research widely. He earned cum laude degrees in electrical engineering, arts, and medicine (MD) from the University of Texas, performed post-graduate neuroeconomics research at Stanford University, and is Board-certified in psychiatry. He lives in Los Angeles.
Time: 12:00 pm - 1:30 pm, Lunch
Location: Omni Los Angeles
251 South Olive Street
Los Angeles, CA 90071
For directions call hotel: (213) 617-3300
Event parking at the Omni $12.00
Dress Code: Business Casual
*The Santa Barbara Teleconference is Sold Out
Santa Barbara Teleconference - Lunch Registration (must register to attend-seating is limited):
CFALA Members: Free (link)
Non-Members: $10.00 (link)
Location: Santa Barbara Club
1105 Chapala Street
Santa Barbara, CA 93101
Tel: (805) 965-6547
Methods of payment accepted: Visa/Mastercard, American Express and Discover. If you prefer to pay by check please register online and select "purchase order" as your payment option and enter your last name as the purchase order number. Mail check to: CFA Society of Los Angeles, 520 S. Grand Ave, Suite 370, Los Angeles CA 90071.
*Credit card payments will only be accepted through the secure online registration, and not by phone or email.