Lots of resumes may look good and many candidates can perform well in an interview.īut at the end of the day, it is still a gamble. The HR department of any company faces the tough task of hiring. Of course, statements like that are not going to make anyone feel good, except for the person that said it. The first words out of the mouth of some might very well be, “I knew it was going to go down.” Many opinions are expressed, some for and some against certain stocks.Īfter the team has selected a few stocks to invest in, then spent a couple of million to buy a bunch of shares, if one fails, you will likely see a range of reactions, including the hindsight bias. For example, there may be a group meeting to discuss potential buys.
Hindsight bias example professional#
It is no wonder that people in this profession have a lot of stress.Īs in other industries, professional stock brokers also exhibit hindsight bias. It can be a real blow to one’s confidence and bank account. Predicting the Stock Marketīeing wrong about stocks can be devastating. Examples exist for trivial events, such as if it will rain or not, to significant historical events involving economics and wars. Hindsight bias is so prevalent you can see it happen nearly every day. No one likes to look bad, so saying that we knew something was going to happen helps restore our self-esteem. This is a way of restoring cohesion to a world that is sometimes unstable. Hindsight bias is a cognitive bias that occurs when people overestimate their ability to predict outcomes, after the fact.įor example, although someone may make a prediction, when that prediction fails to materialize, they are likely to say that they “knew it all along.”
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