The tendency after an event has occurred to believe one "knew it all along" — creating a false sense of predictability that undermines learning from mistakes.
Deeper Explanation
Hindsight bias is corrosive to investment learning because it makes past mistakes feel like predictable failures rather than what they were: reasonable decisions given the information available at the time. An investor who says "I should have seen the fraud coming" is replacing the actual uncertainty of the moment with false certainty of retrospect. The antidote: keep a decision journal. Record the thesis, the information available, and the reasoning at the time of each investment. Review this record when evaluating outcomes — not the narrative your memory has reconstructed after the fact.
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