— Rick Rule
… We all believe we source information from various channels… and that we then assemble, dissect, and analyze that information rationally before drawing our conclusions. But that’s not what we do.
We certainly seek input from many places. But we seek input that makes us comfortable. We seek input that reinforces our existing views and prejudices. We assign most relevance to information that is familiar to us and that we are comfortable with. This is known in behavioral finance as confirmation bias.
We also all suffer from another cognitive bias known as recency bias. Our experience of the immediate past governs our expectation of the future.”