Map of the Rise and Fall of Blockbuster #financialadvice #retirementplanning #financialplanning #behavioralfinance
It took them 18 years to go from 13 stores in the US to more than 3,700 and another 13 years to go back down to their last store. There would no doubt have been investors who rode the shares on the way up and grimly hung on to them all the way down, in the expectation that they would recover. Or there would have been those who bought on the way down thinking that the shares would return to their previous high levels. This is a behavioral bias known as anchoring. Anchoring bias is the tendency to rely too heavily on, or anchor to, a past reference or one piece of information when making a decision, for example a previous share price. Unfortunately, where a share price has been in the past presents no information as to whether or not a stock is cheap or expensive now.
