My Bias Blind Spot Bubble

Since March Madness is nearly upon us, how about a fun basketball story?

I was lucky enough to be a hoops fan during the golden age of basketball: Larry Bird and Magic Johnson, the Bad Boy Detroit Pistons, Michael Jordan, and the perennially-on-the-verge-of-winning-it-all New York Knicks during the Patrick Ewing, John Starks, Charles Oakley, Anthony Mason era.

The most frustrating aspect of being a Knicks fan was the terrible officiating. Jordan got away with murder, and not long after, Shaquille O’Neal became the refs’ favorite. Countless bad calls against the Knicks at the worst possible moments made fans feel like the league was colluding to favor the Bulls and undermine the Knicks. It never felt fair or just. “Jordan Rules” were real, and I was absolutely convinced – convinced! – that something foul was afoot.1

Fast-forward to the 2000s. Over that decade plus of doing CNBC, I had become friendly with Big Joe Besecker of Emerald Asset Management. Joe’s a great manager and comes at the markets from a very different perspective than myself. We had been on the air many times together and always had fun riffing off of each other. Joe invited me to see the Saint Joseph’s Hawks men’s basketball team (or was it St. John’s Red Storm? I don’t even recall) play in the National Invitation Tournament (2012ish? or ‘13?). At the time, I had never sat anywhere near courtside, and as a big alum, he had great seats.

The NITs are fun. When you are five rows off the floor at center court, you see EVERYTHING. It was a close game, and Joe was endlessly berating the refs for their “bad” calls. Travel! Flagrant Foul! Charge! C’mon refs, keep it fair!

Joe is a really big guy, and his voice boomed across the Garden floor. We were so close, you just knew they heard every word.

Here’s the thing: I’m a big Knicks fan but never really paid close attention to college basketball. I’ll watch March Madness, especially when a team like Michigan or North Carolina is having a breakout year. But I have absolutely no emotional involvement in any outcome – zero skin in the game. Couldn’t care any less about who wins.

Joe kept turning to me every other play: “Did you see that foul?”

My response: “The hand is part of a ball, he barely touched him, not a foul.”

Joe: “Travel!”

Me: “Two and half steps on a lay-up is always allowed.”

Joe: “That was a charge!”

Me: “Not really, the guy was moving and not planted – it was a good foul call.”

Joe: “Three!”

Me: “Nope, his foot was on the line.”

On and on this went, all game.

That night stands out to me because I don’t even remember who won. All I recall was this horrible sinking feeling that everything I believed about the bad officiating and the Knicks’ was completely, utterly wrong.

I had a massive blind spot as to my own biases. This was a self-created bubble of my own making, and I was unhappy learning just how delusional I was.

It was eye-opening. My emotional involvement in the game’s outcome affected everything: how I perceived the action, what stood out, what I remembered, and even the narratives I told myself about what was going on. Being a fan hopelessly affected me in ways I had not even imagined. It wasn’t just that I was wrong, it was – Goddammit! – that I was completely and totally living in an artificial construct of my own making that bore no relationship to objective reality.

My bias blind spot bubble has been burst.

I had been deep down the behavioral finance rabbit hole ever since my days on a trading desk in the 1990s. But it was always a tool to see how everyone else, from other traders, brokers, clients, strategists, etc., was engaging in selective perception, narrative fallacies, and hindsight bias. It was never me that made all of those mistakes.

But it was.

That game was eye-opening. It made me realize that, despite my extensive research into the psychology underlying behavioral economics, I suffered from the exact same cognitive errors as everyone else.

As Daniel Kahneman explained, “We are blind to our blindness. We have very little idea of how little we know. We’re not designed to know how little we know.”

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Kahneman’s themes — humility, acknowledging how little we actually know about today, (and even less about tomorrow), striving to understand reality, and recognizing our own inherent shortfalls — are prime drivers of How NOT to Invest. If these ideas interest you, then please check it out.

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1. Some people think of “Jordan Rules” as the Detroit Pistons coach Chuck Daly’s playbook of how to stop Jordan and the Bulls, but I am referring to the unwritten rules how the league officiated superstar players, most especially Jordan.

Coming March 18, 2025
see more at HowNOTtoInvestbook.com

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