John Nofsinger - Profile on Academia.edu (original) (raw)
Papers by John Nofsinger
Social Interaction and Investing
Pound wise and penny foolish? OTC stock investor behavior
Review of Behavioral Finance, Sep 2, 2014
Purpose– The purpose of this paper is to explore some commonly held beliefs about individuals inv... more Purpose– The purpose of this paper is to explore some commonly held beliefs about individuals investing in over-the-counter (OTC) stocks (those traded on Over-the-counter Bulletin Board (OTCBB) and Pink Sheets), a fairly pervasive activity. The authors frame the analysis within the context of direct gambling, aspirational preferences in behavioral portfolios, and private information.Design/methodology/approach– Contrary to popular perceptions, the modeling of the deliberate act of buying OTC stocks at a discount brokerage house finds that unlike the typical lottery buyers/gamblers, OTC investors are older, wealthier, more experienced at investing, and display greater portfolio diversification than their non-OTC investing counterparts.Findings– Behavioral portfolio investors (Shefrin and Statman, 2000) invest their money in layers, each of which corresponds to an aspiration or goal. Consistent with sensation seeking and aspirations in behavioral portfolios, OTC investors also display higher trading activity. Penny stocks seem to have different characteristics and trading behavior than other OTC stocks priced over one dollar. Irrespective of the price of OTC stocks, the authors find little evidence of information content in OTC trades.Originality/value– The paper provides insight into individual investor decision making by empirically exploring the demographic and portfolio characteristics of individuals trading in OTC stocks.
Momentum trading in the NFL gambling market
Finance Research Letters, Jul 1, 2023
Unpaid Chairperson: A Free Lunch for Shareholders?
Psychology in the Mortgage Crisis
The Emotional and Moody Investor
How Wellness Influences Financial Decisions
Emotion and Investment Decisions
Social Science Research Network, 1999
Social Science Research Network, 2012
Compared to conventional mutual funds, socially responsible mutual funds outperform during period... more Compared to conventional mutual funds, socially responsible mutual funds outperform during periods of market crises. This dampening of downside risk comes at the cost of underperforming during non-crisis periods. Investors with Prospect Theory utility functions would value the skewness of these returns. This asymmetric return pattern is driven by the mutual funds that focus on environmental, social, or governance (ESG) attributes and is especially pronounced in ESG funds that use positive screening techniques. Furthermore, the observed patterns are attributed to the socially responsible attributes and not the differences in fund management or the characteristics of the companies in fund portfolios.
Do Men and Women Invest Differently?
The Personality of a Successful Investor
Self-Control and Decision Making
Social Science Research Network, 2011
Review of Financial Economics, 2019
In this paper, we examine the relationship between sleep and financial risk taking. The results i... more In this paper, we examine the relationship between sleep and financial risk taking. The results indicate that individuals who have better sleep display less distortion of probability, are less susceptible to the present bias, and have a lower discounting rate. Specifically, individuals with better self-reported sleep quality have less distortion of probability, a more curved utility function, and are less loss averse, while those with fewer sleep disturbances display less probability distortion and have more curvature in their utility function. Overall, the results show that there are cognitive deficits in financial decision making by having poor sleep habits that can have important consequences.
Overconfidence
Routledge eBooks, Jul 28, 2017
Psychology and Finance
Routledge eBooks, Jul 28, 2017
Journal of Corporate Finance, Oct 1, 2019
Representativeness and Familiarity
Routledge eBooks, Aug 2, 2022
Forming Portfolios
Routledge eBooks, Aug 2, 2022
Social Interaction and Investing
Pound wise and penny foolish? OTC stock investor behavior
Review of Behavioral Finance, Sep 2, 2014
Purpose– The purpose of this paper is to explore some commonly held beliefs about individuals inv... more Purpose– The purpose of this paper is to explore some commonly held beliefs about individuals investing in over-the-counter (OTC) stocks (those traded on Over-the-counter Bulletin Board (OTCBB) and Pink Sheets), a fairly pervasive activity. The authors frame the analysis within the context of direct gambling, aspirational preferences in behavioral portfolios, and private information.Design/methodology/approach– Contrary to popular perceptions, the modeling of the deliberate act of buying OTC stocks at a discount brokerage house finds that unlike the typical lottery buyers/gamblers, OTC investors are older, wealthier, more experienced at investing, and display greater portfolio diversification than their non-OTC investing counterparts.Findings– Behavioral portfolio investors (Shefrin and Statman, 2000) invest their money in layers, each of which corresponds to an aspiration or goal. Consistent with sensation seeking and aspirations in behavioral portfolios, OTC investors also display higher trading activity. Penny stocks seem to have different characteristics and trading behavior than other OTC stocks priced over one dollar. Irrespective of the price of OTC stocks, the authors find little evidence of information content in OTC trades.Originality/value– The paper provides insight into individual investor decision making by empirically exploring the demographic and portfolio characteristics of individuals trading in OTC stocks.
Momentum trading in the NFL gambling market
Finance Research Letters, Jul 1, 2023
Unpaid Chairperson: A Free Lunch for Shareholders?
Psychology in the Mortgage Crisis
The Emotional and Moody Investor
How Wellness Influences Financial Decisions
Emotion and Investment Decisions
Social Science Research Network, 1999
Social Science Research Network, 2012
Compared to conventional mutual funds, socially responsible mutual funds outperform during period... more Compared to conventional mutual funds, socially responsible mutual funds outperform during periods of market crises. This dampening of downside risk comes at the cost of underperforming during non-crisis periods. Investors with Prospect Theory utility functions would value the skewness of these returns. This asymmetric return pattern is driven by the mutual funds that focus on environmental, social, or governance (ESG) attributes and is especially pronounced in ESG funds that use positive screening techniques. Furthermore, the observed patterns are attributed to the socially responsible attributes and not the differences in fund management or the characteristics of the companies in fund portfolios.
Do Men and Women Invest Differently?
The Personality of a Successful Investor
Self-Control and Decision Making
Social Science Research Network, 2011
Review of Financial Economics, 2019
In this paper, we examine the relationship between sleep and financial risk taking. The results i... more In this paper, we examine the relationship between sleep and financial risk taking. The results indicate that individuals who have better sleep display less distortion of probability, are less susceptible to the present bias, and have a lower discounting rate. Specifically, individuals with better self-reported sleep quality have less distortion of probability, a more curved utility function, and are less loss averse, while those with fewer sleep disturbances display less probability distortion and have more curvature in their utility function. Overall, the results show that there are cognitive deficits in financial decision making by having poor sleep habits that can have important consequences.
Overconfidence
Routledge eBooks, Jul 28, 2017
Psychology and Finance
Routledge eBooks, Jul 28, 2017
Journal of Corporate Finance, Oct 1, 2019
Representativeness and Familiarity
Routledge eBooks, Aug 2, 2022
Forming Portfolios
Routledge eBooks, Aug 2, 2022
Economically Targeted and Social Investments: Investment Management and Pension Fund Performance