Source: Chapter 11 of “Beating the Odds, from Las Vegas to Wall Street” by Edward O. Thorp
- Anchoring
- Momentum: past prices can predict future prices -> looking at graphs to predict future changes is useless
- Leverage: proper risk management is necessary to avoid wipeout
- Conflict of interests:
- Efficient market hypothesis: consensus often wrong but necessary
Anchoring
Anchoring is an example of human biases