Recency Bias

In the decade leading up to the 1989 peak in the Japanese stock market, there was little to complain about. Almost everybody with shares of stock or real estate was watching their net worth rise, month after month, nearly uninterrupted. It became so easy to make money in the stock market that work ethic declined, leisure time increased, and many corporations found it easier and more profitable to augment their core business activities with stock market activity. According to Edward Chancellor in “Devil Take the Hindmost”, “Japanese politicians were not solely guided by public duty in their desire to support…