The anchoring effect as per wikipedia is a cognitive bias whereby an individual's decisions are influenced by a particular reference point or 'anchor'. Once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor.
Anchoring Bias is a typical reason we miss multi-bagger opportunities.
We tend to look at the past performance of a security and that taints the way we look at its future. We become so hell bent on anchoring the security with a benchmark that we often ignore other course defining attributes.
#InvestmentPsychology