mik82

anchoring and bayesian rigidity and the 2 that really mess me up.

I think of anchoring as not fully adjusting, bayesian rigidity as not adjusting at all, status quo as a tendency not to change.

I also think of anchoring and bayesian rigidity as things analysts do in their forecasts and status quo as something defined contrib plan participants do (401k allocation - set it and forget it).

mik82

Prudence is you temper your forecasts down because u don't wanna look like an idiot.

Like if I built a model and it said the Apple stock is going to triple in price next year but everyone is saying it will only move up 10%, I temper my forecast down to say 15%



Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 09:31PM by JP_RL_CFA.