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Camera As often happens with good regulations, the SEC’s new requirement for calendar-end performance results came with unintended consequences. It codified the snapshot-in-time anomaly. (Photo: Shutterstock)

There’s a demon that exists in all compliance-approved standardized reporting formats. It’s terrible, and it can mislead both professionals and retail investors. It’s a well-recognized behavioral fallacy that goes by the name of “recency.” It’s our awful human tendency to overweight the importance of what we’ve most recently seen. It’s why, when asked to name the greatest actor, more folks say “George Clooney” or “Brad Pitt” than “Humphrey Bogart” or “Jimmy Cagney.”

Christopher Carosa


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