Confirmation Bias – Earnings: BIP, CHR, SJR, CHR, MIC
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"Confirmation bias" refers to a tendency to favour information that confirms our beliefs, while ignoring data that doesn't. With the arrival of the internet and its ability to track individual interests, this delivers even more of what we want know, conveniently to our computer screens. This is how market trends become overextended.
Up until early 2019, the predominant belief borne out of the Global Financial Crisis was that interest rates were heading higher. There was little opinion available to the contrary. Interest rates were going to rise, best get used to it. It changed the composition of the preferred share sector to predominantly floating rate issues.
The early part of 2019 may well be remembered as a time when opinion on the direction of interest rates changed radically; from for certain going higher to not rising at all. The magnitude of this change is beginning to impact markets; comments this week identify early harbingers of this change.
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