Podcasts

MarketPysch: Profiting from investor psychology and the Internet (podcast)

Zack Miller | April 05, 2011

On Tradestreaming Radio, we’re interviewing lots of innovative entrepreneurs, investors, and researchers all trying to make investors better at what they do. Check out our archives. Subscribe on iTunes.

From this perch, it seems like investors are witnessing a Renaissance of tools, data, and research that overlays investor psychology on 24/7 streaming content of the Internet.

The magic bullet for individual investors and hedge funds alike is to use this data to create profitable trading strategies. Previous podcasts have looked at using Google search data to find rising stocks. Other tradestreaming techniques have centered around creating forecasts of future events using online media.

This week’s guest on Tradestreaming Radio is Richard Peterson, MD (yes, that kind of doctor). He’s also an RIA and his firm, MarketPsych LLC helps to coach investors and their advisors into making better investment decisions. More interesting, the firm has developed a sentiment analysis engine from its own experience trading quantitative strategies in an in-house hedge fund.

Dr. Peterson’s new book, MarketPsych: How to Manage Fear and Build Your Investor Identity (Amazon link) is an amazingly refreshing read. All investors struggle with assessing their risk tolerance, performance and decision making. While behavioral economics/finance has helped us understand what problems we face, it hasn’t helped a whole lot in truly helping us change our investing behavior. MarketPsych provides a clear overview of the problems and gets its hands dirty helping us investors help ourselves.

In the podcast, we talk about:

how investors make decisions
how investors can use changes in sentiment to forecast stock price movements
how hedge funds use investor psychology and Internet content/social media to profit
how technology innovation leads to higher stock prices.