Skip to Content

An example of countering confirmation bias

There are times when an investor trusts his research so much that most of the “evidence” that he moves to uncover are evidence that puts it in agreement to his argument. And that can be dangerous.

Ritholtz here shows a clear examination of seeking the view of folks opposite to his and examining whether they make sense of it.

Am I too bullish?

I think we should always use what discrete mathematics teaches us as disproving.

When all the evidence that you bring up refutes the opposing thesis, the you are probably right. Else it may prevent you from making a decision based on how your brain behaves.

A rather nice quote I find in that article by Peter Lynch

"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” That quote succinctly describes the circumstances for many since the March 2009 lows.

Kyith

This site uses Akismet to reduce spam. Learn how your comment data is processed.

freedom

Wednesday 18th of December 2013

great quote from Peter Lynch. It reminds that bottom fishing is not for everyone. Most people would do much better by just keep investing along the way when they still have a meaningful long time to invest.

Kyith

Wednesday 18th of December 2013

i guess thats quite true in this 2009 and 2013 situation. cheers for visiting. wish you a merry xmas

This site uses Akismet to reduce spam. Learn how your comment data is processed.