Buying the Same Stock - Again: Pride and Regret Drive Investors' Decisions
Sunday, June 12, 2011 - 23:30
in Mathematics & Economics
How likely are you to repurchase a stock you sold? Professor Terrance Odean, who studies behavioral finance at the University of California, Berkeley's Haas School of Business, found that that trading patterns involving previously owned stock are driven by a desire to avoid or at least limit anticipated regret. In other words, investors are likely to repurchase a stock if the sale boosts feelings of satisfaction.