Recency bias
TheoryDefinition
Over-weighting recent events when forecasting the future. Drives bull-market complacency ("stocks always recover quickly") and bear-market despair ("the world is ending"). The classic "what have you done for me lately" trap.
Especially dangerous around inflection points. After 13 years of US tech outperformance, recency bias made 2022's 30%+ tech drawdown feel impossible. After 2022, it made 2023's 50% Nasdaq rally feel improbable.
Especially dangerous around inflection points. After 13 years of US tech outperformance, recency bias made 2022's 30%+ tech drawdown feel impossible. After 2022, it made 2023's 50% Nasdaq rally feel improbable.