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NYT Discovers Confirmation Bias
Posted By Barry Ritholtz On October 14, 2013 @ 7:20 am In Cognitive Foibles,Financial Press,Really, really bad calls | Comments Disabled
“Perhaps something more complicated than sketching out voting districts is at play. The polarized political map is now accompanied by a media ecosystem that is equally gerrymandered into districts of self-reinforcing discourse.”
From the better-late-than-never files:
I want to direct your attention to an article from David Carr, titled It’s Not Just Political Districts. Our News Is Gerrymandered, Too.  That’s where the above quote came from.
The bad news is that we learn that the media reporter for one of the more important American newspapers is only now discovering both confirmation bias and the Balkanization of the press. The good news? Well, let’s consider this a form of progress.
As we have written oh so many times, confirmation bias  is an expensive habit of investors. We tend to read that which agrees with our investments and posture. We disagree and downplay that which advises the other side of the trade. We even selectively forget things that challenge our views and holdings.
In politics, it can divide the electorate into two warring camps, with Party first and Country second. But it also works to drive people away from the political parties — which may turn out to be a good thing in the modern era. Party affiliation has fallen over the years, and is now near its lowest levels, pretty much, ever. Independents are the largest voting group (even if they don’t vote as a bloc).
Investors that read only that which agrees with their views do poorly in markets.
Political strategists who read only that which agrees with their views do poorly in elections.
Its not only important to be “reality based,” you must also seek out dissenting views and opinions. Find intelligent people of differing perspectives and worthwhile process, and see what they have to say. Not despite their disagreeing with you, but because of it.
I don’t always agree with what colleagues like David Rosenberg or Doug Kass or Bill Fleckenstien argue — but I respect their process, and know their is an intelligence and method to their writings. Reading what they say, especially when I disagree with it, makes me a better investor.
One last issue with Carr’s column: He makes the horrific comparison of confirmation bias in news consumption with gerrymandering. For the record, the former is a hard wired cognitive error inherent to all humans; the latter is a corrupt process that serves to defeat the ideals of Democracy and “One Man, One Vote.” They are not remotely similar, and the NYT should be embarrassed by the comparison.
It’s Not Just Political Districts. Our News Is Gerrymandered, Too. 
NYT October 11, 2013 http://www.nytimes.com/2013/10/12/business/media/when-our-news-is-gerrymandered-too.html
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2013/10/nyt-discovers-confirmation-bias/
URLs in this post:
 It’s Not Just Political Districts. Our News Is Gerrymandered, Too.: http://www.nytimes.com/2013/10/12/business/media/when-our-news-is-gerrymandered-too.html
 confirmation bias: http://bit.ly/17oWlgp
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