📉 An investor sold shares of an oil company after the stock price fell, assuming it was due to a drop in oil prices.
🤔 The stock quickly recovered, leaving the investor confused as the oil price hadn’t significantly changed.
🧠 This highlights a common cognitive bias where investors rely on readily available information and pre-existing ideas, ignoring other potential market factors.
@ClaveBursatilTV:
“What happened last Monday had to do with a person who commented that they had bought a share of an oil company, and that share had started to go down, and therefore, they sold it. And that quickly recovered and returned to the values it was at before. So, what they were wondering is, why did this happen if the price of oil didn’t move? If the price of oil didn’t move, why did the stock go back up? Because the price of oil was going down. So, they understood that it had gone down because of that, that’s why they sold. So, here’s something of what you said that has to do with the information that we have available at certain times, and how we often find it difficult to think about that information that we don’t have at that moment, or that we don’t know. And this is part of what we have sometimes talked about, cognitive biases. It’s like where cognitive biases are supported, which are these errors in the conclusions we reach, because the conclusions we reach have to do with the information we have available, that we know, that we interpret, a previous idea that we had. And if we don’t start subjecting it to the judgment of reality, of the present, or we start to go a little further, we will always stay in the same place. Because, as you said, sometimes one associates certain situations: an oil company went down, oil went down, until oil goes up, it won’t go back up. Well, that’s our idea, but it’s not what happens in reality.”
Watch the exact part of the video where @ClaveBursatilTV talks about the oil company stock here:
View the video on YouTube.
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