Hao Xuguang

(Source: "Shanghai Securities News"2016-5-23）

——Eighth Essay on the Psychology of Stock Investment

Initial information often produces an anchoring effect, which affects the estimation of events and creates cognitive biases. When considering decision-making problems, the brain assigns too much weight to the information received first, and the information obtained first has a directional effect on subsequent information. When initial impressions, estimates, data, and information anchor subsequent thinking and judgment, subsequent information cannot be adjusted.

There is a classic legend that there is a rice porridge shop on each side of a small street. The products, prices, and services are the same, but the sales are very different. Why? After investigation, w88 live casino was found that the waiter at the store with low sales always asked: Sir, do you want eggs? The waiter at the store with the highest sales asked: Sir, would you like one egg or two eggs? The following questions use anchoring.

The so-called anchoring means that when people judge and evaluate, they often first set the most easily obtained information as the estimated initial value or benchmark value (called the "anchor point"), and then the target value is derived based on the anchor point and other information through certain upward and downward adjustments. In other words, the answer to the question is derived through certain adjustments. Initial information often produces an anchoring effect, which affects estimates of events and creates cognitive biases. In layman's terms, when considering decision-making, the brain assigns too much weight to the information received first. The information obtained first has a directional effect on the subsequent information, so the idea is fixed on the information obtained initially. Initial impressions, estimates, data, and information anchor subsequent thinking and judgment, making w88 live casino impossible to adjust later information.

In the stock market, investors are often anchored by the previous highest point. Suppose an investor buys two stocks, the cost is10yuan, one rose to50The yuan was not sold, but fell back25Yuan. The other one slowly rose to25Yuan, in which case investors are happier? w88 live casino's probably the second case. This is the answer from nearly a thousand investors surveyed by the author. Why? In the first case, the investor regrets not being in50Sold at the high point of Yuan, looking forward to rising again50yuan, ignoring profit250%The joy that brings. In fact, the actual results brought by these two stocks to investors are the same, but investors feel different in their hearts, so their operations are different. If investors are anchored by the previous highs and fail to "take profits" in time, they are likely to "take the elevator." In the second case, most investors will stop their profits in time and keep the fruits of victory.

Investors will also be anchored by the purchase price. This situation leads to wrong operations. After buying close, the stock rise is often difficult to hold on to, and you always want to make a profit. If the stock price drops, the decision to sell is not based on whether w88 live casino will be profitable in the future, but the selling price is determined based on the buying price. The operating habit of being anchored by the buying price is often that if w88 live casino rises again after falling, w88 live casino will run away as soon as w88 live casino unwinds. This does not comply with professional investment principles: forget about buying points and base them on the likelihood of future rises and falls.

Investors will also be anchored by the conclusions of the media. w88 live casino manifests itself in paying attention to the conclusions of the media all day long, and the results are anchored by the media. For example1999year of "5·19"Quotes, in that year6month15Daily reached on Shanghai Stock Index1387At this point, w88 live casino has risen30%The above, some newspapers and periodicals commented that this is a recovery market, and many retail investors have entered the market accordingly.6month30日1756The market has ended, and many small and medium investors have been trapped for many years.2014This wave of market prices started in 2017, and the Shanghai Stock Exchange Index reached4000Point, some media say this is the beginning of the bull market. If retail investors entered the market at that time, everyone knows what would have happened.

Many people heard others say that the Shanghai and Shenzhen stock markets are policy markets when they entered the market, so they were anchored by the concept of policy markets. So they focused on policies all day long, but ignored the relationship between policy and the stock market: The stock market is of course affected by policies, but after all, the stock market has its own rules of operation. Looking at the world's stock markets, the stock market can only be supervised, not regulated.

w88 live casino is said that the Shanghai and Shenzhen stock markets are a news market, so many people have the impression of a news market. When investing in stocks, they always like to inquire about news everywhere and neglect to delve into basic technologies. As everyone knows, there is so much news in the stock market, how can there be so much valuable news? Really valuable information requires you to dig w88 live casino out from the market and the company's fundamentals. You can ask yourself, would someone with top-secret information tell you or dare to tell you top-secret information? How close are you to the person who brought the message? Someone so close that he actually has top-secret information that would risk ruining his career by giving w88 live casino to you?

Investors are also anchored by the behavior of others. Whether to enter the market or leave the market, you always keep an eye on the behavior of others. When you see others making money, you enter the market one after another. When you see others buying a divine stock, you will follow suit regardless of whether the stock price is in the sky at that time. As a result, when the market falls, there is no chance to escape.

The biggest anchor for investors is self-anchoring. Therefore, you must learn to confront yourself.

The condition for overcoming this anchor point and operating in the opposite direction is that the accuracy of accustomed operations is low. So, w88 live casino’s time to carefully study your own operations. How accurate is w88 live casino? if below40%, indicating that your transactions are often wrong. Especially when the market continues to fall or rise, if the accuracy of the operation is lower than40%, if you want to make correct investment decisions, you must have the courage to go against your habits.

So, how to prevent being anchored? This requires some psychology.

For example, learn to look at the same problem from different perspectives. Try to use different starting points and methods to analyze the problem, rather than being limited to the first idea that comes to mind. Whether this stock can be bought and whether w88 live casino should be sold should be comprehensively examined and should not be bound by the first piece of information received.

For example, you should think independently before consulting others to avoid being anchored by other people's opinions. Before investing in stocks, you especially need to think independently and then consult others.

For example, try to broaden your thinking, dig out relevant information extensively, and listen to different opinions to enrich your own perspectives and analyze new ideas. When investing in stocks, don't be anchored by your original views, but break through your original thinking.

Also be careful not to anchor the person you are asking for advice. First, tell them as little as possible about your opinions, estimates, and preliminary decisions. If you leak too much, they risk becoming anchored, and your own assumptions may come back to frame you. The market is ever-changing. When investing in stocks, you will be wise if you listen.

The pursuit is correct results rather than opinions. Results are the gold standard for testing opinions, and opinions obey results.

(The author is a professor at the w88 casino of Business, w88 casino)