From the 24th until the 26th of September, the 8th Conference on Behavioural Finance and Capital Markets (BFCM) is taking place at LTU’s City Campus. The conference presents state-of-the-art research in the fields of Behavioural Finance, Experimental Finance & Capital Markets/Market Microstructure.

Its beginnings

The conference started in 2011 with the idea of merging together two fields in finance: capital markets and people’s behaviour. On the one hand, capital markets (or market microstructure) is all about how financial markets are functioning, how liquid, how risky as well as how fair and efficient these markets are. On the other hand, financial markets are driven by people’s emotions and behaviour. Behavioural biases are well documented in the literature. Even financially literate people are prompt to cognitive biases. In other words, investors, traders, bankers and lenders all show such biases while making investment decisions under risk. From the outset, the BFCM Conference bought together top academics such as: Pete Kyle, Avanidhar (Subra) Subrahmanyam, Richard Roll, Peter Bossaerts, Ron Masulis, Terrence Hendershott, Stephen Brown and Tarun Chordia (among others) with industry leaders to discuss relevant topics.

Its aim

The conference merges academic research with the applied work of the finance industry. The conference continuously looks to identify new emerging fields of research and supports better cooperation and collaboration among researchers and between academia and industry.

According to Founder of the BFCM Conference & LBS Professor Petko Kalev it comes down to this:

“The research we do should not only have academic value but also practical application that impacts the finance industry and hence our society. This conference makes that happen.”

BFCM Conference in the news

The conference topics are always relevant. This relevance is highlighted by an article that was published this week in the Australian Financial Review. Chanticleer Tony Boyd wrote an article titled “The highs and lows of retail investing” based on an academic paper that is being presented at the BFCM Conference next week.

The article starts with a story on Warren Buffett’s Berkshire Hathaway, buying a big stake in Apple in 2016, when the stock was 10 per cent above its 12-month low. Looking back, the timing was perfect. Apple is now trading about 5 per cent below its record high. The article then discusses the idea that institutional investors often profit at the expense of retail investors who sell at the wrong time. An idea supported by the yet to be released paper by Joshua Della Vedova, Andrew Grant and Joakim Westerholm from the University of Sydney. They found that retail investors often sell at the 52-week high because it is a domain for gains and provides an anchor for the highest past price.

Read the full article by Tony Boyd here.

 

Visit the BFCM Conference website for more information.