Do soccer fans and investors tick the same way?

Dear reader,

Identity means the perception of one's own situation and characteristics, manifested through specific personality traits, beliefs, forms of expression and actions - and sometimes through a preference for a soccer club. A recent study from Stanford fits in with this: supporters of a soccer club behave more irrationally when betting on match results than non-fans. Real fans are always much more willing to take risks when it comes to their own club; and when things are going badly for the team, they remain optimistic and tend to gamble "against the odds". This sounds understandable when we consider what must be going on in the minds of soccer fans when they are asked to bet against their team (some would say not much, of course, but please!). The researchers draw further conclusions: They are convinced that our identity shapes all financial decisions much more than we would like to admit. Accordingly, there is an "identity tax" that we regularly have to pay due to our irrational, identity-driven decisions. Now, for us brand people, this is nothing new: after all, the "identity tax" basically corresponds to the price premium that strong brands realize - and which has made LVMH the most valuable company in Europe (after Novo Nordisk, but that's another story). However, the question of long-term investments is an interesting one: we know that many investors prefer domestic companies, even if foreign investments are objectively more attractive. But what role do identity and brand play for institutional investors? Specifically: Is the brand strength of a company objectively assessed and priced into the investment - or does brand affinity also unconsciously determine the behavior of professional investors? After all, rationality is part of identity on the stock market. Or what do you think?

Here is the link: