Speaker Lunch: Behavioral Finance and Lazy Prices

Date: March 2, 2017

Time: 12:30 – 2:30pm

Venue: Kiangsu Chekiang and Shanghai Residents (HK) Association Restaurant, 4/F Manning House, 38-48 Queen’s Road Central, Central

Cost (includes lunch):

Early bird (on or before Feb 17): HK$300 (members); HK$400 (associates/guests)

Standard (Feb 18 onwards): HK$400 (members); HK$500 (associates/guests)

(*Please send payment confirmation to to confirm your seat*)

Speaker: Professor Christopher Malloy (B.A. 1996, Davenport College), Harvard Business School

Contact Person: Rawen Huang (), Kevin Kwong (), Carolyn Yeh ()

Professor Malloy will present a brief overview of the field of behavioral finance, and then an in-depth look at his most recent paper, entitled “Lazy Prices.” In his overview, Professor Malloy will summarize the advances of the past decade but also include some speculation about the most promising directions for the next decade, including social network analysis and the future of unstructured data.

As an example of current and future work in the field, his paper “Lazy Prices” explores the implications of a subtle “default” choice that firms make in their regular reporting practices, namely that firms typically repeat what they most recently reported. However, when firms make an active change in their reporting practices, this conveys an important signal about the firm. Changes to the language and construction of financial reports have strong predictive power for firms’ future stock returns: a portfolio that shorts “changers” and buys “non-changers” earns up to 188 basis points per month (over 22% per year) in abnormal returns in the future. Changes in language referring to the executive (CEO and CFO) team, or regarding litigation, are especially informative for future stock returns.

Biography:

Christopher Malloy is the Sylvan C. Coleman Professor of Financial Management in the Finance Unit at Harvard Business School, and a Research Associate at the National Bureau of Economic Research. Prior to joining HBS in 2007, Professor Malloy was an Assistant Professor in the Finance Department at London Business School, where he was on faculty from 2003-2007. Professor Malloy currently teaches the second semester investment strategies and stock pitching courses at HBS, and has previously taught courses in behavioral finance, corporate finance, and equity investment management. His research focuses on behavioral finance, asset pricing, investments and portfolio choice, labor economics, and empirical corporate finance. His research has appeared in the Journal of Political Economy, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies, and has been described in The Financial Times, The Wall Street Journal, The New York Times, and various other media outlets. Professor Malloy received a PhD in Finance and an MBA from The University of Chicago Graduate School of Business, and a BA in Economics from Yale University. Before beginning his doctoral studies, he worked at the Board of Governors of the Federal Reserve System in Washington, DC in the Monetary and Financial Studies Section

NOTE: Please send payment confirmation to to confirm your seat. Spaces are limited so sign up early!