Peterson: How Investor Emotion Influences Oil Prices

Dr. Richard Peterson, a board-certified psychiatrist and CEO of MarketPsych, is among the foremost leaders in the area of applied behavioral finance. His team has developed an algorithm that crunches data from more than 2,000 media outlets and 800 social media sites to interpret investor sentiment and suggest trading opportunities. Based on that data, they put together a market-neutral social media-based hedge fund that beat the S&P 500 by more than twenty-four percent—through the 2008 financial crisis.

In this excerpt from that broader interview with Hedgeye CEO Keith McCullough, Peterson explains how his algorithm has been “almost 100% accurate in catching every major monthly move” in oil prices. He explains why “people talking their book” and “investor chatter” influences where oil prices are headed in the future. Given Peterson’s unique distinctions as psychiatrist and market practitioner, his insights are always thought-provoking. It’s must-see TV for investors looking to become more disciplined traders.

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