behavioral finance bias

BEHAVIORAL INVESTING / FINANCIAL PSYCHOLOGY

Overconfidence Bias: Why Investors Overestimate Their Skill After Success

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Introduction Few things are more dangerous in investing than success. After a series of winning trades or a strong market run, investors often feel smarter, more skilled, and more in control than before. Confidence grows, caution fades, and risk suddenly feels manageable—unnecessary. This is not coincidence. It’s Overconfidence Bias at work. Overconfidence bias is one

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BUFFET - COGNITIVE BIASES

Confirmation Bias: Why Investors Only See What They Want to See

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Confirmation bias in investing leads individuals to favor information supporting their beliefs while dismissing contradictory evidence. It creates a false sense of confidence and can significantly deteriorate decision quality. To counter it, successful investors seek disconfirming evidence, embrace criticism, and focus on facts over opinions, prioritizing truth over comfort.