Media Moves

Business journalism, confirmation bias and the stock market

August 25, 2015

Posted by Allen Wastler

stock market“What happened?!”

That question is going around a lot these days, given recent market volatility.

And there are already a lot of analyst notes, on-air debates, and public speeches attempting to connect dots between the market ups and downs and ongoing developments in China, Europe, the oil patch and tech sector.

It’s a time for business journalism to shine, particularly if we keep “confirmation bias” in mind.

“Confirmation bias” is the regrettable tendency of the human mind to remember information that fits in with a personal view of the world and ignore that which doesn’t. You can find a neat little rundown of the psychology involved and various case studies at the You Are Not So Smart blog.

It can be a troublesome phenomenon for journalism in general.

But it’s a double challenge in business journalism since so much of the work is based on reporting how others are viewing events.

Take, for example, the simple analyst note. A reporter will take such a note and typically turn it around in a quick story along the lines of “Well regarded analyst recommends This Stock based on A, B and C.” Problem is, the analyst may well have overlooked contrary information from D, E or F due to his or her own confirmation bias. (Contrary information may also have been left out due to stupidity or more nefarious reasons, but I’m sticking with the notion that analysts are smart and try to do the right things here).

The same trap lies in on-air discussions and interviews, particularly when the subject is charismatic and the timing is propitious — like during a market crash. Conversations can get breathless in the heat of the moment.

So does it mean the reporter or anchor has to be smarter than the analyst or subject in order to point out overlooked facts or interpretations? Not necessarily. But it does mean the reporter should be aware that the subject is making an argument based on a self-selected set of facts. Other facts and other conclusions are always possible – even if the interpretation at hand is really, really convincing. And those possibilities should be pointed out to the reader and viewer.

This should be standard, indeed featured and called out, in thorough analysis pieces and segments. But it also should be observed in quick turns, like those done in the rush of a crazy market day.

This is fairly easy in Internet journalism by linking to a contrary opinion. In print, there is always the “To be sure” paragraph (as in “To be sure, this entire story could be absolutely wrong”). And you’ll see the better TV/radio folks throw an occasional “Now other folks could argue” line into whatever conversation is under way.

The trick is remembering not only your bias but also that of your sources and subjects in the first place.

Allen Wastler is the former managing editor of and the former managing editor of He can be reached at

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