spy vs spy

Anchoring bias

December 11, 2018

Anchoring bias.  People have a strong tendency to perceive prices as “belonging” within a range once that range has been previously established.  Anchoring refers to our propensity to attach our thoughts to a reference point even if that point has no basis in logic. Anchoring is an extremely difficult bias to avoid or eliminate, even…

Read More

coing toss

Herd behavior

December 11, 2018

Herd behavior.   An experiment conducted at the University of Leeds showed that it takes a minority of just five per cent to influence a crowd’s direction – and that the other 95 per cent follow without even realizing it. The scientists concluded that “The findings could have major implications for directing the flow of…

Read More

photo  ffe

Confirmation bias

December 9, 2018

Confirmation bias.  In the finance world, investors will often over-emphasize information that supports his existing thesis while actively ignoring information which might discredit that thesis. When looking for new information, that same investor only seeks additional information in places that might further support his existing thesis. He never even looks for information that might discredit…

Read More