Wednesday, November 26

Bias

Overconfidence bias
Analyst overconfidence in their earning forecasts which lead to overemphasize the impact of good news and to underestimate the impact of bad news.

Confirmation bias
People tend to seek out supporting information after making a decision and avoid new information that is against their decision

Escalation bias
Investors tend to throw good money after bad – the practice of averaging
down as the price of a stock falls.

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