Confirmation bias

The habit of seeking, believing and remembering information that supports what you already think, while discounting information that does not.

Example

After buying a share, reading the bullish write-ups and abandoning the bearish ones halfway - not as a decision, but because the bullish ones simply feel more worth finishing.

Important

Confirmation bias does not feel like bias; it feels like research. The only reliable defence is deliberately hunting the strongest argument against your position before you commit.

Related terms

  • Disconfirming evidence — Information that would make your thesis wrong - facts you would have to explain away rather than cite.
  • Overconfidence bias — Systematically overestimating the accuracy of your own judgement - in particular, being far more certain of a forecast than its track record justifies.
  • FOMO (fear of missing out) — Buying because other people appear to be making money, rather than because you have formed a view about what the asset is worth.

Lessons that explain it

  • If nothing could prove you wrong, you have not said anything — A thesis becomes useful at the moment it names what would refute it. This is how to write that line so it is checkable rather than rhetorical. (12 min)
  • Confirmation bias and the fear of missing out — Two failures that feel like diligence and enthusiasm: reading only what agrees with you, and buying because the decision is being made for you by other people's excitement. (11 min)
  • The pitch is designed to persuade you; the business has to persuade customers — A compelling pitch and a strong business are different things. Separate the story from the evidence, look for what is missing, and test claims before they shape your judgement. (10 min)

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