Economist Arnold Kling, in The Three Languages of Politics, speaks directly to me when it comes to free market economics — I absolutely know that I instinctively scrutinize and dispute any evidence that contradicts it. And, for whatever reason, I allow myself such luxury:
When we engage in motivated reasoning, we are like lawyers arguing a case. We muster evidence to justify or reinforce our preconceived opinions. We are open and accepting when it comes to facts or opinions that support our views, while we carefully scrutinize and dispute any evidence that appears contradictory.
When it comes to the financial markets, however, it is essential that I not wish for anything, nor argue on behalf of bulls or bears. I have to assess conditions as the market presents them, like them or not. In this regard I must heed the advice of Nassim Taleb:
The problem is that our ideas are sticky: once we produce a theory, we are not likely to change our minds—so those who delay developing their theories are better off. When you develop your opinions on the basis of weak evidence, you will have difficulty interpreting subsequent information that contradicts these opinions, even if this new information is obviously more accurate.