Holy Theory
We’ve met the nasty nature of confirmation bias on several occasions. This is the twisted trait that sees us in thrall to the views of others around us, and helps us encourage them to maintain those views, regardless of anything resembling reality. But this is only the half of it.
No, we also have to cope with the impact of information that blows huge great holes in our world views and which undermines our most devoutly held beliefs. When faced with unequivocal evidence that shows that our favourite investment ideas are wrong we do what you really ought to expect by now: we don’t so much ignore it as twist it to our own predetermined ends. Folks, meet the wonderfully counter-intuitive backfire effect.
