In making judgments about the level of stock prices, the most likely "anchor" will be the level of recent prices. In other words, the market is rationally valued today because it is close to the value of yesterday (without giving thought to whether or not yesterday's value was rational). Applied to individual stocks this could be anchoring to other stocks and the market. This would help explain why overall movements in the stock market have such an effect on individual stocks and why market indices are as volatile as they are.
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