Confirmation bias (investing).
In plain English
Confirmation bias is the tendency to seek, favor, and remember information that supports what you already believe, while discounting what contradicts it. Nickerson reviewed the wide evidence for it in 1998. In investing it is especially costly: once you own a stock or hold a view, you notice the news that agrees with you and wave away the warnings, so you miss the case for changing your mind. It quietly turns research into a search for reassurance rather than a genuine test of the idea.
01Why it matters
Confirmation bias makes people underweight the evidence they most need to see, so recognizing it pushes an investor to actively look for the strongest case against a position, not just support for it.
02The math, step by step
After buying a stock, you read the bullish takes and skim past the bearish ones, and every piece of good news feels like proof while bad news feels like noise. The research feels thorough but is really a hunt for reassurance, so the warning signs get filtered out.
03What this is NOT
It is not the same as confidence. Real conviction survives a hard look at the counterevidence. Confirmation bias is avoiding that look, collecting only what agrees with you, so the confidence rests on a filtered picture.
04Receipts
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