brain activity: winners vs loosers · patrimônio lucro 9867 8097 17794 16887 mamem roe 23, 2309%...

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Brain activity: winners vs losers J. Vieito, F. T. Rocha, A. F. Rocha and R. Pownall Financial Education and Behavior Investor Conference, Rio de Janeiro - 2014

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Page 1: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Brain activity: winners vs losers

J. Vieito, F. T. Rocha, A. F. Rocha

and R. Pownall

Financial Education and Behavior Investor Conference, Rio de Janeiro - 2014

Page 2: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Financial results

Page 3: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Classifying

Winners are those having FB>Market in

more than 60% of the decisions

Page 4: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Regression mappings: volatility

Page 5: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Common component: calculus

High

Right hemisphere

Low

Left hemisphere

Page 6: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Winners use left and right areas for

value, benefit and risk analysis

Page 7: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Losers use left areas for

handling numeric value differences.

Page 8: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Are winners using emotion?

winners loosers

Page 9: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Brain and Emotion

Page 10: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Emotion and Decision Making

Page 11: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Emotion and Decision Making

INSS PGBLxVGBL PRIVATE

FUNDS

BANKS STOCKS

LIFELONG PRACTICALITY PRACTICALITY PRACTICALITY RENTABILITY

65, 70, 125??? PENALTIES BANKRUPTCY OVERHEAD LOSS

Page 12: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Cost, benefit and risks

Page 13: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Cost, benefit and risks

Page 14: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Cost, benefit and risks

Page 15: Brain activity: winners vs loosers · Patrimônio Lucro 9867 8097 17794 16887 Mamem ROE 23, 2309% 1136% Caixa 11908 2DOS4 24535 29034 £429 52 sss 48943 48271 cxug -1783 -18893 -31

Brain and Decision Making

Financial Education and Behavior Investor Conference, Rio de Janeiro - 2014