Confirmation bias is the psychological phenomenon by which the mind seeks information which supports an already previously held belief and shuns information that contradicts the belief. For those of you that were fans of "Hogan's Heros" this is the Sgt. Schultz equivalent of "I see nothing and I know nothing." Despite the various capers perpetrated by Colonel Hogan, Hogan was always able to convince Sgt. Schultz to see what Sgt Schultz wanted to see.
What works in the world of comedy, can spell trouble for investors. Tthe Psy-Fi blog has a wonderful new missive on the confirmation bias:
http://www.psyfitec.com/2010/01/confirmation-bias-investors-curse.html
For those of you interested in the link between the brain and the investment process, there is a treasure trove of information on this blog and I link to it on the right side of the main page.
For those "really" interested, within the blog post is a reference to a paper by Raymond Nickerson. It is very lengthy but well worth the time:
http://psy2.ucsd.edu/~mckenzie/nickersonConfirmationBias.pdf
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