recency bias
Latest-event overweighting tendency
Recency bias is the tendency to give disproportionate weight to recent events or information when making judgments.
In investing, someone with recency bias might assume a stock will keep rising because it rose last month.
In sports, fans exhibit recency bias when they declare a player the greatest after one spectacular game: That's just recency bias talking—wait until the season ends.
Flawed conclusion from reasoning
- mental shortcutQuick cognitive approximation
- heuristicPractical solving shortcut
- decision-makingProcess of choosing actions
- loss aversionSetbacks sting more than gains please
sunk cost fallacy · gambler's fallacy · cognitive distortion · systematic error · irrationality · blind spot · psychology · behavioral economics
Memory retrieval act
- retentionContinued holding or possession
- short-term memoryFleeting cognitive storage
- working memoryTemporary cognitive holding space
- forgetting curveMemory loss over time
encoding · retrieval · flashbulb memory · memory distortion · consolidation · hippocampus · learning · rehearsal
Rapid price fluctuation severity
- overtradingExcessive market activity
- short-term thinkingFocus on immediate outcomes
- stock pickingChoosing specific shares to purchase
- panic sellingFear-driven mass liquidation
Giving excessive importance
- misjudgmentFaulty evaluation of something
- distortionTwisting from original state
- tunnel visionInability to see periphery
- shortsightednessInability to see distance
myopia · snap judgment · hasty conclusion · impulsivity · overvaluation · partiality · subjectivity · flawed reasoning
judgment error
Flawed conclusion from reasoning
- mental shortcutQuick cognitive approximation
- heuristicPractical solving shortcut
- decision-makingProcess of choosing actions
loss aversion · sunk cost fallacy · gambler's fallacy · cognitive distortion · systematic error · irrationality · blind spot · psychology · behavioral economics
recall
Memory retrieval act
- retentionContinued holding or possession
- short-term memoryFleeting cognitive storage
- working memoryTemporary cognitive holding space
forgetting curve · encoding · retrieval · flashbulb memory · memory distortion · consolidation · hippocampus · learning · rehearsal · interference
market volatility
Rapid price fluctuation severity
- overtradingExcessive market activity
- short-term thinkingFocus on immediate outcomes
- stock pickingChoosing specific shares to purchase
overweighting
Giving excessive importance
- misjudgmentFaulty evaluation of something
- distortionTwisting from original state
- tunnel visionInability to see periphery
shortsightedness · myopia · snap judgment · hasty conclusion · impulsivity · overvaluation · partiality · subjectivity · flawed reasoning · misattribution
- behavioral economicsloss aversion, nudge, anchoring, heuristics, mental accounting
- biasprejudice, racism, bigotry, sexism, ageism
- biaseshalo effect, horn effect
- cognitive biasesframing effect, halo effect, loss aversion, horn effect, Dunning-Kruger effect
- investment pitfallsovertrading, panic selling, overleveraging, overconfidence, poor timing
- logical fallaciesfallacy, straw man, ad hominem, red herring, false dilemma
recency, recent, recently, recentness, bias, biased, biases, biasing, unbiased