Confirmation bias is seeking out, and believing more readily, the evidence that supports what you already think. Raymond Nickerson's 1998 review traced it through science, medicine, law and everyday judgement. From the inside it doesn't feel like bias; it feels like doing the reading.
Once you own a share, the articles that agree with you read like analysis and the ones that don't read like noise. The counterweight is disconfirming evidence: the facts that would show you were wrong. Naming them in advance — a dividend cut, cover falling below one, debt climbing — turns reading into testing. A holding's detail in the app puts payout ratio, cash flow coverage and debt-to-equity next to the yield that may have drawn you in.
Only one of these searches can change your mind.
SOURCES
- Nickerson, R. S. (1998). Confirmation bias: a ubiquitous phenomenon in many guises. Review of General Psychology, 2(2), 175–220.
Educational content only. It is not personal financial advice.