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Investors should beware the sound of silence

In financial markets we can fool ourselves that we are being consistent when really we are filtering out data that does not support our investment premise

When Paul Simon wrote in The Boxer “Still the man hears what he wants to hear and disregards the rest”, he may not have been attempting profound economic analysis.

Yet that line from Simon and Garfunkel's 1969 hit neatly sums up a phenomenon that dogs investors and economic commentators alike. It is known less lyrically as confirmation bias.

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