Episode 273: Professor Samuel Hartzmark: Asset Pricing, Behavioural Finance, and Sustainability Rankings

<p dir="ltr">Today’s episode is an exhilarating journey into the captivating realms of finance and human behaviour with Professor Samuel Hartzmark, who takes centre stage to explore the complex intersection of asset pricing and behavioural finance. Professor Hartzmark’s career and academic journey are nothing short of inspiring. With a double major in mathematics and economics, a prestigious MBA from the University of Chicago Booth School of Business, and a Ph.D. from the University of Southern California's Marshall School of Business, he has paved a remarkable path through the world of academia. Our conversation takes a deep dive into his groundbreaking research, where he dissects complex financial topics with astonishing clarity. We delve into some of his most-cited papers, including those on dividends and sustainable investing, which consistently reveal counterintuitive conclusions that challenge conventional wisdom. We unpack price-only index returns, dividend juicing, price-only data, the value of sustainability rankings, and the power of capital to make the world a better place. And don't miss our exploration of multi-factor asset pricing, where Samuel’s unique perspective sheds new light on these models in the context of human behaviour. This episode promises an enlightening and engaging conversation that investors and finance enthusiasts alike won't want to miss!</p> <p><strong> </strong></p> <p dir="ltr">Key Points From This Episode:</p> <p><strong> </strong></p> <p dir="ltr">(0:03:48) Morningstar's sustainability rating system and its impact on the flow of mutual funds. </p> <p dir="ltr">(0:07:35) Choosing sustainability ratings over other metrics and how they motivate investors. </p> <p dir="ltr">(0:16:24) What drives the behaviour of mutual fund investors toward green firms. </p> <p dir="ltr">(0:18:17) Unpacking the concept of sustainable investing and how impact elasticity is relevant. </p> <p dir="ltr">(0:23:15) Insights into the impact elasticity differences between brown and green firms. </p> <p d