Behavioral question: past experience with a single stock

Hi, One quick thing: I think I saw some days ago one post talking about the way an individual looks at a stock that made him have a loss in the past, you know, a bad experience with that particular name. I was checking both CFA and schweser and find no behavioral “thing” associated to this. If I had to pick one, I would go for representativeness (although this is not a general stereotype, just his particular experience) or frame dependece (understanding “frame” as the “box” where he psychologically “accounts” for his past experience). What do you think? thx

snake-bite effect or recallability trap is probably a better fit. Recalling something that happened with this security, market or an event and basing your decision off that.

that is the problem, I don´t find those terms in this year´s curriculum. where did you get them from? schweser or cfa? thx

SS 3 is so wooly! … it could be this, it could be that … if someone could just spell it out for us, we’ll all mug it up and be happy. i would go with representativeness… you are basing future decision on a past event.

I saw them in Stalla and past-year CFA exams.

CareerChange Wrote: ------------------------------------------------------- > I saw them in Stalla and past-year CFA exams. really ? snake-bite effect ??? … i thought that was someone’s idea of a joke… there actually exists a snake-bite effect ?

the only place I see “recallability trap” is inside capital market expectations (one of the psychological problems in forecasting) but, again, never applied to individual investors and a particular stock

this is recallability. one of the investor psychological traps in forecasting. this is also one of the questions in 2007 exam. - sticky

Snake-bite effect is not in the curriculum anymore. They took it out after the 06 exam.

It is mentioned somewhere in the readings - people tend to remember extreme events and let this color their judgment of future actions. It could be recallability, but there could be another term for it - I know the details are in the curriculum. SOmewhere :frowning:

CFAAtlanta Wrote: ------------------------------------------------------- > It is mentioned somewhere in the readings - people > tend to remember extreme events and let this color > their judgment of future actions. It could be > recallability, but there could be another term for > it - I know the details are in the curriculum. > SOmewhere :frowning: It IS recallability ---- p.23, CFAI vol 3. - sticky

you could make a case for recallability or heurstic bias. heurisitc (spelling) bias deals with people forming stereo types based on past experiences…and fits the description of the question you posted.

so recallability (or snake-bite) is out of the curriculum for individual investor purposes, but not as one of the psychological problems analysts have when forecasting we all agree?

sticky Wrote: ------------------------------------------------------- > CFAAtlanta Wrote: > -------------------------------------------------- > ----- > > It is mentioned somewhere in the readings - > people > > tend to remember extreme events and let this > color > > their judgment of future actions. It could be > > recallability, but there could be another term > for > > it - I know the details are in the curriculum. > > SOmewhere :frowning: > > It IS recallability ---- p.23, CFAI vol 3. > > - sticky Economics Analysis.

abacus Wrote: > Economics Analysis. huh? which paragraph on which page are you referring to? - sticky

nm