Hindsight bias
This is the tendency for people to overestimate their ability to have predicted an outcome that could not possibly have been predicted.
The problem is that too often we actually didn’t “know it all along”, we only feel as though we did.
Ultimately, hindsight bias matters because it gets in the way of learning from our experiences because if you feel like you knew it all along, it means you won’t stop to examine why something really happened.
Hindsight bias can also make us overconfident in how certain we are about our own judgments.
It’s important to learn from our mistakes or missed opportunities so that you can become a better investor
This is the tendency for people to overestimate their ability to have predicted an outcome that could not possibly have been predicted.
The problem is that too often we actually didn’t “know it all along”, we only feel as though we did.
Ultimately, hindsight bias matters because it gets in the way of learning from our experiences because if you feel like you knew it all along, it means you won’t stop to examine why something really happened.
Hindsight bias can also make us overconfident in how certain we are about our own judgments.
It’s important to learn from our mistakes or missed opportunities so that you can become a better investor
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