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Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
Recency bias is the tendency to give more weight to recent events than to long-term patterns.
People assume what has happened lately will continue happening.
Investors often chase recent stock performance, expecting it to repeat.
This can lead to poor decisions because short-term events may not reflect true trends.
Recency bias distorts judgment by exaggerating the importance of what just happened.