FoMind
Chen bought a stock, convinced it would go up. After that, he browsed investor forums every day, reading only the bullish posts. When bad news came out, he told himself, "The big players are just shaking out weak hands." A month later he was even more convinced, but the price kept falling.
This is confirmation bias: once we hold a view, we tend to seek out, interpret, and remember information that supports it, while ignoring or twisting information against it.
It works at three stages
- Seeking: searching only for "why it will rise," never "why it will fall."
- Interpreting: taking ambiguous news at face value when it supports you and nitpicking it when it doesn't.
- Remembering: vividly recalling the times you were right and quickly forgetting the times you were wrong.
The scary part is that this process makes you more and more confident, even though the evidence itself hasn't grown.
How to guard against it when forecasting
FoMind's new-forecast flow has two fields, supporting reasons and opposing reasons. The second one exists specifically to counter confirmation bias.
- Take the opposing reasons seriously: don't write something empty like "something unexpected might happen." Write specific reasons with real weight.
- Invite an imaginary opponent: picture a smart friend who holds the opposite view. What would they say? Write down their strongest argument.
- Search the other way: if you believed the opposite conclusion, what would you search for? Go search for it.
- Write the cons before choosing a number: give your probability after writing reasons on both sides, not the other way around.
How to spot it in a review
Look back at your reasoning: five supporting reasons and one half-hearted opposing one? When unfavorable news appeared, did you genuinely update, or did you explain it away? If the latter, confirmation bias may have played a part.
When your reasons all point one way, it's often not because the evidence is one-sided, but because you only looked at one side.