What is cognitive bias that causes investment failure? Part 3

I've written about cognitive bias in investment over 2 times, 5/9 and 5/13, and today is the 3rd time.
「confirmation biasIt's called”.

Confirmation bias means that you only search for information and content that is in line with your own thoughts and desires, and you feel safe watching it. And the psychological situation where objections are disregardedThat's it.

I think there are many people who think, “Oh, that's a good job.”As SNS became popular, we are now in an age where confirmation bias is more likely to intensifyIt is said.

Also, it is a cognitive bias that even people who have taken the right action of “thinking and investing for themselves” fall into. It's very troublesome.

I'm a caller, so I'm keenly aware, but when it's a medium- to long-term upward trend or short-term downtrend, if you send a short-term downtrend from an option perspective, “it's still going up!” “What are you saying” comments are often attached (laughs)
This shows that basically the majority of individual investors are in the mentality that they want the market price to rise since they are in the long run. Also, confirmation bias is working strongly by searching for messages that “stocks will rise,” and attaching opposing comments to the opposite transmission.

Of course, the market price is different, and my messages don't match, so that's fine, but the problem isAren't you looking for only information that matches your own market price without knowing it?That's it. And it means that if it's wrong, they'll sink together.

While rising endlessly in 2023 and 2024, there were also many videos that incessantly fueled sales with sensational thumbnails like “the explosion is coming,” “the recession is coming,” and “the market price is collapsing.” There are still a lot of them now (laughs)
So,Add comments that many people agree withYou were there. “Yes, of course! I'm going with a strong grip on the W Inba!” It was full of comments such as “I've already cashed it out, so if there's a crash, I'll go buy it.”

This is a typical confirmation bias, and if you really hold a futures short for a long period of time or buy down W inba, it would be an explosion.

andUse confirmation bias to form commercials and promotionsIt will be done.
That's why most securities company employee analysts and independent investment advisors“Stocks will rise” “Japanese stocks will be strong”It will send it out. There are many people who feel overwhelmingly better that way,Leads to attracting customersIt's from there.

With such transmission, any kind of news or data becomes a “Japanese stock purchase.”
I'm amazed when I say buy all the time, so in the short-term decline phase, the scenario is “soft now, but it will recover half a year from now.”

Well, that was off topic,Be aware that confirmation bias is often bad when you fail in investingThat alone is quite different.

If you have a long sense of market value, take a look at sending a short one as well.
Conversely, if you're short yourself, take a look at the long ones.
This alone is actually completely different.

I was relieved to see that the rice recession would definitely come from 2022 to the next year in 2023, and I was relieved to see a lot of messages from the group that would come to recession, starting with Emin. However, starting with Okazaki-san, I saw that there was no recession, that the US economy remained strong, and that Japanese stocks were the target, so I was aware of the communications from people who consciously disliked it (lol) and said that stocks were high all year round.

Then, I'm convinced that Japanese stocks may really have undervaluation corrections, semiconductors may have to be put on, and that Japanese stocks must be reviewed with the aim of dividends due to the need to improve ROE...
huh? Is it OK to go downwards due to the 2023 recession? If you buy it now, wouldn't it be better to feel like if the rice recession is coming, you'd rather buy more there? and my consciousness changed.

So, starting 23/9, albeit lateThe long-term investment portfolio was changed to focus on “Japan Stock High Dividend ETF,” “Japan Semiconductor Stocks,” and “Semiconductor SOX Linked.”. Individual stocks were also narrowed down to stocks with long-term growth and dividend expectations, such as KDDI and Ricoh Leasing, etc., and all growth stocks were cut.

The number of stories mentioned above has also increased in my communications.

As a result, six months later, I think we have been relatively successful so far.
On the assumption that the rice recession would come, 1/3 of VTI and SPYD were sold while continuing savings at the beginning of '23, but this was also bought back by the fall and the reserve amount was slightly increased.

Well, this just happens... but I knew the word confirmation bias, so I'm conscious not to trust people who say they go up and down endlessly, and I always try to imagine the opposite market price or chart considerations even in my own communications.

andJust knowing confirmation bias makes it actually easier to change mindsIt will be.
This is important!

I always imagine my own sense of market price, whether information gathering is unbiased, what would happen if the market price was the opposite...Images and orders for when moving in reverse are often madeIt is.

well, in short, it's chicken lol,Loss cuts and doten going in the opposite direction have become lighterI think so.

ActuallyPeople caught in confirmation bias explode to death because they can't cut losses due to anchoring effects and prospect theoryIt can also be said.
Even though it's a big loss, it's inexhaustible, and they comfort themselves by sending messages from people suffering in the same way and purchasing only information with the same sense of market price.

If you know this, you should consciously avoid it.
This alone makes it possible to change the mind.

Please be aware of these three cognitive biases.