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Effective URL: https://strategiccfo.com/articles/management-ownership/durability-bias-in-business/
Submission: On March 27 via api from ZA — Scanned from DE
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Skip to content MENU CFO Coaching Portal Access SCFO LAB Access SELF STUDY WIKICFO Contact MENU Home WIKICFO Management/Ownership Durability Bias in Business DURABILITY BIAS IN BUSINESS * Other Category: Financial Leadership, Management/Ownership * August 18, 2009 * Dan * economy, forecasting, market, projections, recession, recovery, stock Durability bias in business is the tendency of people to project recent trends or occurrences into the future. If it happened in the past, then it must happen in the future. The term is often used in behavioral science and forecasting. DURABILITY BIAS IN BUSINESS How does durability bias apply to business? Often business professionals project short term trends into the future. They believe that the recent good times will last forever, conversely, they also believe the bad times will go on indefinitely! The stock market is a good example of durability bias in action. When the market is booming you start seeing books titled, “Dow 20,000”, hitting the bookstores. People started buying stocks and an euphoria took over. Last fall the opposite happened. Stocks started dropping and soon we were in a financial crisis. For the past six months the stock market has gone from maximum pessimism to the beginnings of optimism. Stocks have risen 21% in the past six months and over 39% since the low on March 9th. Right now the durability bias is on the downside, however, as these gains continue the bias will shift to the upside. So what is your durability bias telling you? Are you running your business as if the tough times are going on forever or are you investing in your people and infrastructure to take advantage of the recovery? ARTICLES YOU MIGHT LIKE CPA’S ARE SPECIALIZED June 8, 2021 The Difference in CPAs Looking back at my career I don’t know how many times I have introduced myself to someone and they ask, “Are you a CPA?” and I say yes. Then they tell me “you must be very busy with tax season” and I look at them with a bit of awe and Read More » HOW TO IMPROVE YOUR RESUME August 10, 2020 The concept of resumes might seem difficult to grasp at times. After all, you’re set with the task of conveying all of your life’s accomplishments and skills in a single sheet of paper. Creating a good resume is an essential skill necessary to be successful in the workforce. A good resume can be the difference Read More » BUYER BARGAINING POWER (ONE OF PORTER’S FIVE FORCES) July 27, 2020 See also: Porter’s Five Forces of Competition Threat of New Entrants Intensity of Rivalry Threat of Substitutes Supplier Power Supplier Power Analysis Buyer Power Definition Porter’s Five Forces of buyer bargaining power refers to the pressure consumers can exert on businesses to get them to provide higher quality products, better customer service, and lower prices. Read More » JOIN OUR NEXT SERIES Financial Leadership Workshop MARCH 28TH-31ST 2022 REGISTER NOW SHARE THIS ARTICLE Share on facebook Share on twitter Share on linkedin JOIN OUR NEXT SERIES Financial Leadership Workshop 00 Days 15 Hours 14 Min 20 Sec March 28th-31st 2022 Learn More Register Now QUICKLINKS * The Art of the CFO™ * SCFO Self Study * SCFO Lab * CFO Coaching CONNECT WITH US * Info@Strategiccfo.com * (832) 886-4246 * 830 Julie Rivers Dr #303 Sugarland, TX 77478 Facebook Twitter Linkedin Pinterest © 2022 All rights reserved | Web Design and SEO by Authority Solutions® | Terms of Use / Privacy Policy | Refund Policy Go to mobile version