It states that you always look for confirming evidences in your views in facts as to justify your views . Often this is like taking a comfortable relief by seeing only what you want to see and ignoring the actual facts .
This bias often is a big threat in investment decisions , You see a company being badly hurt by a event like a legal court case and due to the Endowment effect you get wedded to your position and look for facts and evidences that supports your views to hold the investment rather than to exit your positions. This is viewed as a big threat in decision making .
Often business are rapidly changing And you have to update your views to reflect the fact , If you’re a Bayes Practitioner you would know that each and new evidence needs to be updated in order to reflect and adjust the latest probability . Yet in case of confirmation bias instead of updating your views you remain in Status Quo and tend to see facts that confirms your beliefs . Which I’m turn leads you to hold the Investment and which as a order will lead to a bad decision .
In our daily life we always justify and look for evidences as to what we need to know and see rather than what is the real fact to it . This can totally break you or your business that’s why we use principles like Invert and Persian messenger syndrome ( Read earlier blog posts ) , ideally a rational mind you should always beware of this !
Ideally instead of lollipop ping you should view new facts and update it to the already existing ones to reflect new facts and revised probability !
Do you know how this kills you as a team ? You always think and look for evidences that you’re the best in team , ego mounts up and as a fact you do certain things well and certain things not well so you often rely on what you’ve done well when justifying you’re good even though when you’re not good at something . Don’t micromanage
Charlie Munger Almanack , Thinking Fast and Slow is a great place to start acquiring worldly wisdom
Master Moves 