Sunday, November 23, 2014

We Are All Biased Now

The first rule in investment is to eschew emotion for rationality, but this line of thinking is deeply flawed.  To be emotional is to be human and when striving for cold logic, you fool yourself into believing you are no longer operating on an emotional foundation.  The trick isn't to pretend emotions don't affect decision-making, but rather to come up with a strategy where illogical emotions cannot hurt you.

The same fallacy occurs in how we deal with biased sources as it is unfortunate that we have labeled "biased" as bad and "unbiased" as good.  The logical outcome from this connotation is that most strives to be interpreted as unbiased and thus (un)consciously present themselves as unbiased sources of information.  This is ludicrous: we are all biased.  This is why sources like Fox News and Dailykos are harmless no matter how biased they are because it is beyond obvious how biased they are.  Readers guard themselves before reading that this is a conservative/liberal perspective on an issue.  It is only when entities hold themselves out to be unbiased that you have to be incredibly wary.

Never mind if it is even possible to be truly unbiased from a sociological or psychological perspective.  Just like emotions are part of being human, biases are an indispensable part of our inductive reasoning.  It is almost impossible to rid of biases just because you consciously choose to.  It is much more likely that you convinced yourself that they are gone.  

In some ways, I deem this search for "unbiased information so that you can make up your own mind" a marketing gimmick.  You know unbiased is preferable to biased, yet how can you tell what unbiased looks like?  Would it not be true that some biased sources will hold themselves out to be as unbiased as possible?  How do you know if you are smart enough to distinguish between biased and unbiased?  Is it also not true that you will scrutinize more closely "unbiased" narratives that disagree with your preconceived notions than those that you already fundamentally agree with?  So marketing yourself as unbiased is the same as food that market themselves as organic/antioxidant etc.  It means nothing, but you feel good being associated with it, thus it sells.

So don't worry about Rush Limbaugh: he tells you straight up he's a socialist hating Republican.  Be wary of the person who "just states the facts."