Are these two the same?
No - Recallibility is the case which you remember happened in past and you think it might again happen in future. RM - One doesn’t solve the decreasing stock and keep it until it goes up.
What’s the diff between Recallability and Representativeness?
Representativeness is building on momentum. A good stock in the past will continue to be a good stock in the future. Recallability is sayign I remember the crash of 1987 and i am fearful anytime the market goes down 100 points because i have flashbacks.
Thanks CFAdreams So Recallability can link to loss aversion behaviour. Representativeness can lead to price inefficiency. Oh and here are the 6 psychological “traps”: Anchoring Status quo Confirming evidence Overconfidence Recallability Prudence
bidder Wrote: ------------------------------------------------------- > Thanks CFAdreams > > So Recallability can link to loss aversion > behaviour. > Representativeness can lead to price > inefficiency. > > Oh and here are the 6 psychological “traps”: > Anchoring > Status quo > Confirming evidence > Overconfidence > Recallability > Prudence The 6 traps you mentioned are primarily traps related to forecasting, correct?
^Economic Forecasting traps
pupdawg82 Wrote: ------------------------------------------------------- > RM - One doesn’t solve the decreasing stock and > keep it until it goes up. You just defined “loss aversion” - keep the losers… Regret minimization is when an investor invests 50/50 stocks and bonds to avoid regret, in case one asset class outperforms the other. This behavioral trait can lead to avoidance of variety => less diversification… Recallability is a trap… RM is a behavior…
bidder Wrote: ------------------------------------------------------- > Thanks CFAdreams > > So Recallability can link to loss aversion > behaviour. > Representativeness can lead to price > inefficiency. > > Oh and here are the 6 psychological “traps”: > Anchoring > Status quo > Confirming evidence > Overconfidence > Recallability > Prudence it was posted here before, but try to remember SCRAPO
I had a hard time remembering this acronym with the topic it goes with, but figured this much out: Traps! O-craps!
bidder Wrote: ------------------------------------------------------- > Representativeness can lead to price > inefficiency. I thought all of these behaviors mentioned in the Behavioral Finance section lead to price inefficiency… not just this one…
mp2438 Wrote: ------------------------------------------------------- > I had a hard time remembering this acronym with > the topic it goes with, but figured this much > out: > > Traps! O-craps! good one! =)
what is the best way / source to practice these traps / behaviors?