Showing posts with label confirmation bias. Show all posts
Showing posts with label confirmation bias. Show all posts

Jul 2, 2012

A Famous Investor Falls for Confirmation Bias


It is human nature to selectively focus on the evidence that supports one's position and to ignore the rest. This is a layman's explanation of what behavioral psychologists refer to as "confirmation bias". It is also a very common reason why inexperienced traders lose money - they get "married" to their position and hold it long past the point at which their reason for entering it has lost validity. 

In his CNBC interview Financial ‘Armageddon’ Will Happen Despite EU Deal Jim Rogers holds the view that despite the large one-day rally, the agreement at the EU summit on Friday is