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Confirmation Bias

Confirmation bias is the tendency to search for, interpret, and remember information in a way that confirms your pre-existing beliefs. It's arguably the most pervasive and damaging of all Cognitive Biases.

Why It Matters

Defenses

Inversion is one of the best defenses: actively asking "What would prove me wrong?" forces you to seek disconfirming evidence. Probabilistic Thinking helps by requiring you to assign actual numbers to your confidence, making it harder to hide behind vague certainty.

Prompts

Why is Confirmation Bias particularly damaging to investment decisions? Once you've decided a company is great, you unconsciously filter news to support that view, ignoring contradictory evidence. What mental model is one of the best defenses against Confirmation Bias? Inversion — actively asking "What would prove me wrong?" forces you to seek disconfirming evidence.

tag--flashcards--mental-models