Anchoring leads investors to rely on irrelevant information from "summary" of The Little Book of Behavioral Investing by James Montier
Anchoring is a cognitive bias that leads investors to rely heavily on irrelevant information when making investment decisions. This bias occurs when individuals fixate on a specific piece of information, known as the anchor, and use it as a reference point for making judgments or decisions. For example, investors may anchor their expectations for a stock's future performance based on its past performance, without considering other relevant factors that could impact its value. This can lead to suboptimal decision-making and potentially result in losses for investors. A...
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