Evaluating decisions by process rather than outcome
The hosts argued that evaluating an investment based solely on its financial payoff is a cognitive bias, as a bad decision-making process can occasionally yield a positive result.
The argument
Using the analogy of running a red light without getting into an accident, the hosts argued that a positive outcome does not retroactively make a risky or poor decision a good one. They emphasized that the quality of the decision-making process itself is what investors should evaluate.
Hear it yourself
"And there's this cognitive bias resulting, which is evaluating a decision based on the results that it yielded rather than on the decision-making process itself. So any given investment may or may not pay off."
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