What anchoring does in investing — the purchase price biases your sell decision

What recency bias does — overweighting recent events in investment decisions

Recency bias leads investors to prioritize recent market trends over long-term historical data

What the disposition effect causes — investors sell winners too early and hold losers too long

The disposition effect leads to premature selling of profitable investments and delayed selling of underperforming ones

What the Treynor-Black model does — combines active stock picking with a passive market portfolio

The Treynor-Black model optimizes portfolio returns by blending active investments with a passive market index

What the efficient market hypothesis claims — prices reflect all available information

Efficient Market Hypothesis: Prices incorporate all publicly available information

What the endowment effect causes — you value what you own more than what you don't

The endowment effect leads to overvaluation of owned items compared to identical alternatives

What Buffett means by 'Only when the tide goes out do you discover who's been swimming naked'

Exposes investors' lack of prudent risk management