But is $100 truly expensive? It’s hard to tell.
If the company’s revenue and earnings have significantly increased (or there’s a much bigger potential upside now), $100 now might actually present a better deal than $50 from a year ago. But the issue is, that we don’t concentrate on the value of the company’s business, we compare the current price to previous prices.
As such, all of us tend to be affected by price anchoring, whether it’s at the high end or the low.
Likewise in the property market, we like to think that most buyers are rational, and evaluate properties based on location, facilities, convenience, etc. But there’s no getting around some deep-rooted psychological quirks, that prevent us from making totally balanced price comparisons. One of the issues we often come across is price anchoring,
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