David C. Brown
I am an Associate Professor of Finance in the Eller College of Management at the University of Arizona. My research utilizes theoretical, empirical and computational methods to analyze financial markets, individual investment decisions and corporate finance. Specifically, my research interests include institutional investors and asset management, retirement tax planning, early-stage financing through crowdfunding and IPOs, and price feedback and the informativeness of price for firm decision making. My teaching is focused on Financial Modeling, where I combine my real-world experience in early-stage ventures with cases and interactive projects. Prior to academia, I worked in high-frequency algorithmic trading and private student lending where I was involved in several fundraising efforts, ranging from $300K to $75M.
Recent Updates (September 2022)
My target-date fund research was recently highlighted by the Wall Street Journal and my ETF research was featured in this MarketWatch article. I was also promoted to Associate Professor of Finance (with tenure).
I teach Financial Modeling at the University of Arizona, and this semester I am flipping my classroom. To do so, I have recorded many videos in which I emphasize teaching Excel while teaching relevant finance skills. My new YouTube channel (https://www.youtube.com/channel/UCHbmhzlXTBYFHGtyUkqwQRA) has links to all of my video lectures and exercise walk-throughs. If you are interested in using any of my materials featured in the videos, send me an email and I will be happy to share them.
"ETF Arbitrage, Non-Fundamental Demand and Return Predictability", with Shaun Davies and Matt Ringgenberg, has been conditionally accepted for publication in the Review of Finance. It shows that ETF arbitrage activity (flows) negatively predict returns over the following one to six months, consistent with non-fundamental demand distorting both ETF prices and the prices of the underlying assets away from fundamental values.
"Financing Efficiency of Securities-Based Crowdfunding", with Shaun Davies, has been conditionally accepted for publication in the Review of Financial Studies. It analyzes how the "loser's blessing" prevents efficient aggregation of information from a crowd of investors online.
I was invited to join, and have become a member of, the Finance Theory Group.
The Wall Street Journal published an article on "Tax Uncertainty and Retirement Savings Diversification", highlighting the importance of tax diversification in retirement planning. [pdf] I also discussed the implications of the new tax bill for retirement diversification in an article in Financial Advisor magazine.
"Investing in Security Price Informativeness: The Role of IPO Underpricing" was featured on the Oxford Business Law Blog.
"ETF Arbitrage and Return Predictability" was presented at the European Winter Finance Conference and will be presented at the upcoming ASU Sonoran Winter Finance Conference and the FSU SunTrust Beach Conference.
I was recently dubbed "The Best Poker Player in Finance" for winning the tournament at the Financial Research Association's annual conference. I think this puts any debate to rest regarding my abilities relative to my colleague Mitch Towner (who also played in the tournament).
"Tax Uncertainty and Retirement Savings Diversification", with Scott Cederburg and Michael O'Doherty, has been accepted for publication in the Journal of Financial Economics. It analyzes Roth versus Traditional retirement contributions in the presence of tax uncertainty, and is featured in an article on Bloomberg. Consumer Reports and Forbes have also featured our work.
As part of my financial modeling class, I competed along with my students in ModelOff, a financial modeling competition. I qualified as a finalist in the 2016 Financial Modeling World Championships, which will be held in London on December 4th and 5th.
"Moral Hazard in Active Asset Management", with Shaun Davies, has been accepted for publication in the Journal of Financial Economics. The paper highlights the negative externalities from falling passive fee revenue and increased competition on active managers' incentives to exert effort.
Shaun Davies and I have produced a new working paper on crowdfunding. In it, we show the importance of naive investors to creating an efficient financing environment. Our analysis has important implications for the design of crowdfunding platforms, which we discuss in our letter to the SEC.