Richard L. Peterson

CEO of the MarketPsych

Richard L. Peterson MD works at the intersection of mind and markets. As CEO of the MarketPsych group of companies (www.marketpsych.com) he directs a team incorporating psychological insights to provide the global standard in media sentiment data (MarketPsych Data LLC), develop market-beating investment strategies (MarketPsy Capital LLC), and strengthen advisor-client relationships (MarketPsych Insights LLC).
Called “Wall Street’s Top Psychiatrist” (Associated Press), his financial psychology research has been published in leading academic journals, textbooks, and profiled in the financial media including NPR, CNBC, the Wall Street Journal, the Financial Times, and the BBC. His book, “Inside the Investor’s Brain” (Wiley, 2007), was praised as “outstanding” and a “seminal text” by Barrons. With Frank Murtha PhD he co-authored “MarketPsych: How to Manage Fear and Build Your Investor Identity” (Wiley, 2010). Both books were named top financial books of their respective years by Kiplinger’s. His latest book is “Trading on Sentiment:  The Power of Minds over Markets” (Wiley, 2016).

Dr. Peterson 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 California with his family.

 

 

ABSTRACT

Trading on Sentiment: How News and Social Media Drive Market Behavior

Most investors suspect that market psychology – such as cycles greed and fear – influence asset prices. There is little systematic research into whether this occurs and, if so, how investors can take advantage of it. Evidence from the emerging field of sentiment analysis demonstrates the importance of media and information flow in fueling price patterns such as overreaction and underreaction. Sentiment refers to the feelings, attitudes, and beliefs of investors. In this talk we demonstrate how media sentiment data is created through text analytics. We present evidence that the sentiment expressed in news and social media can significantly lead price action.

This talk will help attendees:

• See how the human brain predisposes investors to collective risk-related behavioral patterns.

• Understand how text analysis captures sentiment in news and social media.

• Identify the information types that trigger crowds to overreact or underreact to news in financial markets.

• Understand when you should invest along with the herd, anticipate a turning point, and when it is best to take a contrarian approach