"Actively Seek Opposing Opinions"... Kim Kwang-seok Analyzes the 'Reason Why You Can't Sell'

'Confirmation bias' has been identified as the fundamental reason why investors fail to catch the appropriate selling point after purchasing a stock. In a book review video for the 'Charlie Munger Bible Complete Edition' released on the YouTube channel 'The Man Who Explains the Economy (Kim Kwang-seokTV)', Professor Kim Kwang-seok presented the psychological errors stock investors experience after purchasing and ways to overcome them.

Subjective Analysis and the Danger of 'Confirmation Bias' Starting After Purchase

In the video, Professor Kim Kwang-seok pointed out that while objective analysis is possible before purchasing a stock, only subjective analysis becomes possible after the purchase. He explained that when stock prices fall, most investors merely hope the price will rise and find it easy to ignore information unfavorable to that specific stock. This phenomenon ultimately results in admitting mistakes only after the stock price has fallen to an irrecoverable level.

Kim cited the battery industry as a past example, mentioning a situation where those who suggested the possibility of a shift in leading stocks were attacked for offering negative outlooks. He used the example of the projection that Samsung Electronics' DRAM market share is expected to fall from 75% in the first quarter of 2024 to 63% in the second quarter of 2026, explaining that the attitude of turning away from such facts by labeling them as "negative public opinion" is a representative case of confirmation bias.

How to Overcome Dissonance Avoidance: Active Acceptance of Opposing Opinions

Professor Kim analyzed that the human brain has a tendency for 'dissonance avoidance,' which is the desire to avoid information that conflicts with existing beliefs, and that this is one of the causes of confirmation bias. In an information society where information increases exponentially, it is easy to take a 'shortcut' by selectively accepting only information that reinforces one's own beliefs. This phenomenon appears not only in investing but also in political stances and daily conversations.

Kim presented a solution through the relationship between Charlie Munger and Warren Buffett. He explained that although the two figures were like 'No-men' with opposing thoughts, Buffett found a balance point by not avoiding but accepting Munger's conflicting information. Citing the case of Darwin, he emphasized that the way to overcome confirmation bias is to admit that one can fall into bias and to actively seek opposing facts or opinions.

A Battle of Logic against Logic: The Criterion for Deciding 'When to Sell'

Kim identified 'a battle of logic against logic' as the core of investment decision-making. He stated that if the logical basis for continuing to hold a stock you own is refuted by the logical basis of a newly encountered opposing opinion, then that is exactly the time to sell. In other words, he presented a specific criterion: if you cannot refute the opposing opinion, you should consider selling.

Furthermore, he introduced an anecdote from the Berkshire Hathaway shareholder meetings between 2010 and 2013, where Buffett invited short seller Doug Kass and asked questions that induced a drop in the stock price, mentioning the importance of an attitude that shines a spotlight on opposing opinions. Kim added that in corporate management, government policy, and individual investment, it is essential not to simply please others, but to have extremely logical partners or to undergo a process of deeply addressing various opposing opinions.