Hindsight Bias
The tendency to believe, after an event, that it was more predictable than it actually was.
How it is identified
Test: recalled prior probability estimates shift toward the outcome that actually occurred
Unit
qualitative
In depth
Hindsight bias is corrosive because it prevents learning: if every past event feels obvious in retrospect, no lesson is drawn about the genuine uncertainty that existed at the time. It makes chart patterns look reliable, crashes look foreseeable and one's own past decisions look better or worse than the information then available justified. It also fuels overconfidence, since a history of apparently obvious events implies a talent for spotting them. The only reliable countermeasure is a contemporaneous written record — a decision journal stating the reasoning and the expected probability before the outcome is known.
Worked example
After a 35% fall, commentary lists the warning signs as though they were unambiguous. The same commentators, three months earlier, published year-ahead targets 15% above the then price, and both are on the record.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Hindsight Bias” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.