Knowledge@Wharton: Laura Huang (is here) to tell us about her new research, which has to do with investors using their “gut feel” to make important investment decisions. It’s a little bit counter intuitive — not quite what you might think investors are relying on. So we’re anxious to hear about that.
Laura Huang: The origin of this paper is that we were really interested in how investors make decisions. And this one thing kept coming up. They would talk about the size of the market; they would talk about the product. But investors kept coming back to: “Well, then I rely on my gut feel, or then I invest based on my gut feel.” I’ve even heard stories of investors just saying, “You know, I invest because I rub my tummy, and that’s how I make my investment.”
