Psychologie a chování
Anchoring: How the First Number You See Shapes Every Decision
Key takeaways
- Anchoring is a cognitive bias whereby the first number (the anchor) disproportionately influences our estimates and decisions.
- The most common anchor in investing is the purchase price or a historical peak — both are irrelevant for future decisions.
- "Discounts" in shops and on the market deliberately exploit anchoring.
- The right question is always: "Is this asset attractive at the current price?" — not "Is it cheaper than before?"
- Rule-based decision-making and fundamental data protect against the influence of anchoring.
Anchoring is a cognitive bias in which the first number we register in a given situation disproportionately influences our estimates and decisions — even if that number is completely random or irrelevant.
The classic experiment
In the famous experiment by Kahneman and Tversky, participants spun a wheel of fortune (actually programmed to land on 10 or 65) and then estimated the percentage of African countries in the United Nations. Those who received the number 65 gave significantly higher estimates than those who received 10. The wheel of fortune and Africa have nothing in common — yet the anchor worked.
How anchoring operates in investing
In financial markets you encounter anchoring every day:
- Purchase price as anchor: "I bought at 500 CZK, now it's 350 CZK, so it's cheap." But the market knows nothing about your 500 CZK. The question is whether 350 CZK is attractive today.
- Historical peak as anchor: "I won't buy it because it's 40% below the peak." Or conversely: "I won't sell 40% below the peak, I'll wait for recovery." In both cases the anchor distorts the decision.
- Round numbers as anchors: Prices pause at 100, 1,000, 10,000 — because they are anchors for many market participants.
How to defend against anchoring
The key is consciously redirecting the question. Instead of "is this cheaper than before?" ask: "Is this asset attractive at the current price relative to its fundamentals?" Concrete steps:
- When evaluating a stock, cover the historical price chart and look at current valuations.
- Write your investment thesis without mentioning the purchase price or historical peak.
- Compare to peers rather than to the asset's own history — comparative analyses show relative, not absolute, value.
Anchoring and indexing
Passive investors in index funds are more resistant to this bias — the fund itself continuously reassesses the weights and composition. There is no need to decide whether Amazon is "cheap or expensive" relative to an anchor price. We discuss the advantages of index investing in active vs. passive.
FAQ
What is anchoring in simple terms?
The tendency to place disproportionate weight on the first number seen in a given situation. In investing this is often the purchase price or a historical peak, which then influences every subsequent decision about the position.
Why is the purchase price a bad anchor?
Because the market does not know about it. A security has no "memory" of what you paid. The only relevant question is whether the asset is attractive at the current price — historical price does not answer that.
How do sellers and analysts exploit anchoring?
They deliberately show a high "original price" or an analyst's "target price" to shape your perception of the current price. An analyst's target price is just another anchor. Always ask for the logic behind the number, not just the number itself.