Key idea
Once we believe something, we hunt for evidence that agrees and dismiss what doesn't. It quietly blinds us to risks in our own choices.
Confirmation bias is our tendency to seek out, believe, and remember information that supports what we already think, while ignoring or downplaying anything that contradicts it. In investing, it makes us fall in love with our own decisions and blind to their flaws.
How it shows up
You buy a stock, then read only the bullish views about it and dismiss the bearish ones as "noise." You follow commentators who agree with your positions and tune out those who challenge them. Slowly, you build a comfortable bubble that hides the very risks you most need to see.
The danger is that confirmation bias feels like research. You are reading a lot, so you feel informed, but you are only gathering agreement, not truth.
The habit that helps
Deliberately seek the opposing case. Before committing to an investment, ask "what would make this a bad decision?" and genuinely look for it. An investor who can argue the other side honestly is far less likely to be blindsided than one who only collects reasons to feel right.
Finished reading?
Marking this complete counts today, and your streak becomes day 1.