Nice article on solutions to flight our anchoring bias :
Although the anchoring bias can be very difficult to overcome, the following strategies may help dull the effects of anchoring when you think it may be wreaking havoc on your investment decisions:
1) First, I think it is important to be acutely aware of the anchoring bias and realize that it comes into play to a certain extent with almost every buy or sell decision. Whether it is the 52 week high, 52 week low, the price you initially looked at the stock price, or the price at which it traded at 2 years ago when it was a fraction of today’s price, I think it’s helpful to identify what the anchor price may be in each situation. I think you do need to be careful, because focusing on the anchor price could intensify it’s effect. However, if you can recognize that there is an anchor at play, you can devise a strategy to help minimize it.
2) In 2001 Galinsky and Mussweiler proposed a strategy to resist the anchoring effect. They suggested that negotiators (investors) focus their attention and search their memory for arguments against the anchor. For example, in the case where a stock has moved sharply off it’s 52 week low, where anchoring to the 52 week low may come into play, one could search their memory for previous instances of missed opportunities in similar situations where multi-bagger stocks were missed due to anchoring. This year, I started to keep an investment decision journal so that I can go back and analyze these missed opportunities and faulty decisions with less hindsight bias.
3) A very smart investor has suggested having a “wall of shame” with long term price charts of multi-bagger stocks and circling the price at the lower left corner of the chart where you had anchored and missed the opportunity. When you feel you might be subject to the anchoring effect, you could look at your “wall of shame” which might lessen the weight of the anchor.
4) In Thinking Fast and Slow, Daniel Kahneman suggests deliberately “thinking the opposite” to help deal with the anchoring bias in price negotiations. In a situation where there is likely a strong anchor, one could ask the question “despite my being influenced by price anchoring, is this stock attractively priced in relation to it’s future business prospects at today’s price, ignoring what price it traded at recently?” Instead of focusing on the price that it recently traded at, focusing on the expected value of the stock two or three years into the future, one may be able to reduce the weight of the anchor.