Overview
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Explore the complex agency problems in financial relationships in this 58-minute lecture by Professor Raghavendra Rau, the Mercers School Memorial Professor of Business and Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School. Delivered at Barnard's Inn Hall in London on February 3, 2025, the lecture delves into the concept of "Money Doctors" and how financial experts may not always act in their clients' best interests. Learn about market manipulation techniques, deceptive performance reporting, copycat funds, survivorship bias, and how financial institutions exploit trends like meme stocks. The comprehensive presentation covers various financial scandals, including the Wells Fargo banking controversy, while examining the fundamental tension between rational finance theory and actual human behavior in financial markets. A separate Q&A session is available for further insights. This lecture is part of Gresham College's 400-year tradition of providing free public education from leading experts.
Syllabus
00:00 // Introduction
01:15 // The Core of Finance
01:37 // Rational vs. Human Finance
02:17 // Money Doctors
04:01 // How Money Doctors Help
13:59 // Can Money Doctors Beat the Market?
16:58 // Manipulating Benchmarks
26:16 // Deceptive Performance Reporting
31:14 // Copycat Funds and Survivorship Bias
34:49 // Cheating the System
37:06 // Meme Stocks and Pandering
43:56 // How Companies Exploit Meme Stocks
48:44 // Fraud and Scams
52:50 // Wells Fargo and Banking Scandals
55:44 // Conclusion
Taught by
Gresham College