THANK YOU FOR BEING A PART OF BA19-LDN

We had a really positive response from so many of you, and have already started to incorporate your feedback into planning our next event in New York on November 8.  

Collected below are the poll and survey responses you provided during the speaker sessions. There are some great insights here.

If you have any other comments about the day, including topics you’d like to see discussed at future events, please don’t hesitate to contact us at info@behavioralalpha.com.

ATTENDEE BREAKDOWN

Here’s who was with you at our inaugural European event:

BA19 London Audience
Portfolio manager or CIO 32%
Analyst or Head of Research 25%
Business Development or IR 6%
Risk or quant 4%
Press/Media 2%
Other 31%

Your survey comments and poll results by speaker: 

Chris Woodcock - Essentia Analytics

The Alpha Lifecycle: Measuring Alpha Accumulation and Decay
– Chris Woodcock, Head of Product and Research at Essentia Analytics

Hear Chris’ presentation and the Q&A that followed:

Read an overview of the alpha lifecycle research here.

KEY AUDIENCE TAKEAWAYS:

  • It sounds obvious but sell losers, as in positions that have lost X%
  • Usefulness of this approach – Enabling reflection – Importance of facts
  • Lack of datapoints limit what you can learn through individual analysis
  • Insight partners and coaches matter!
  • There are different lifecycles and we need to understand them so that we can improve
  • Don‘t fall in love (with stocks)
  • Most investors should be selling earlier
  • Understand team structure and ability to remove biases
  • Added value from holdings follow a limited number of patterns
  • We can do even more with data than we think
  • Need for a feedback loop is important to improve alpha
  • Be open-minded
  • Don’t hold risk for too long
BA19 Investor Panel

Investor Panel: Applying Behavioural Science to the Investment Process
– with Joe Wiggins (Aberdeen Standard Investments), Prasenjeet Bhattacharya (NN Investment Partners) and Mick Dillon (Brown Advisory)

SESSION SURVEY: 

To what extent is your interest in applying behavioural science to the investment process mirrored by others in your firm?

I’m a lone voice (or one of very few who are interested) 38%
We’re pretty into this stuff, as a team 52%
This question doesn’t apply to me 10%

KEY AUDIENCE TAKEAWAYS:

  • Algorithm aversion, 20% rule and the growing level of lip service to the broader topics
  • Getting benefit from incorporating behavioural analysis into your process is difficult, it needs to be properly embedded or probably won’t affect behaviour
  • Who is sponsoring and using the externally provided analysis impacts the utility
  • Importance of blending cognition and emotion
  • Quant analysis is biased too
  • There is fierce resistance to recognizing and remediation to behavioural biases
  • Have very concrete decision points that cannot be fudged
  • Biases have biases
  • Biases conflicting
  • Behavioural affection in team and personal managers
  • No one approach or ‘solution’
  • Never stop asking questions… of yourself
  • Know yourself!
  • Trust and communication are essential to using data to drive performance improvement
  • Process vs outcome
  • Always ask questions and always listen to others’ opinions
Dr Tali Sharot

The Influential Mind
– Dr Tali Sharot, cognitive neuroscientist and author of The Influential Mind

KEY AUDIENCE TAKEAWAYS:

  • Accept negative information on a positive story
  • The tendency towards over-optimism, and indeed over-pessimism, can exaggerate market movements in an upturn and downturn respectively
  • Optimism bias is generally good but needs to be acknowledged and adjusted for
  • Optimism bias reduced by stress
  • Best to think more deeply before making big decision or your optimism bias may lead you in the wrong direction
  • Correct your action instead of trying to de-bias yourself
  • Information absorption mediated by congruence and desire
  • The conflict between the conditions necessary to take risk ie optimism and the conditions necessary to make good decisions is tough for the investment industry to manage
  • There are several methods to rein in biases, but the challenge is to implement them in the hot state
  • Some stress is good. The questions is finding out the correct amount
  • There is an equilibrium level of stress that allows a trader to take in the negative at an appropriate level
  • Actions can influence perspectives
  • Confidence is a poor indicator of competence
  • Persuasion through positive, agreeing messages
  • If you want action focus on reward, if you want inaction focus on punishment
  • Control (agency) increases optimism
  • There is not enough research on the impact of gender on risk taking
  • Some great ideas for getting your kids to behave

BA19-LDN in the media

There are some interesting media takeaways from the event. Bloomberg’s Mark Gilbert discussed Chris Woodcock’s alpha lifecycle research and Tom Brakke shared his thoughts about the conference in his Research Puzzle Blog.

Bloomberg Opinion

Want a Bigger Bonus? Don’t Be a Hopeless Romantic
Cognitive biases matter in determining an investor’s performance.

by Mark Gilbert. Read article

Last but not least…

A big thank you to our BA19 sponsors, Chancery Advisors and Investec Private Banking.

Chancery Advisors
Investec Private Bank

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