Question

After some research, albert picked six companies in which to invest money. he discussed his picks with his wife, and she fully supported his choices, so he went ahead and made the investments. after a year, five of the six companies had gone bankrupt, wiping out albert's investments. his wife was furious. she claimed that anyone could have seen that these companies were going to fail. this claim illustrates an error in thinking called:

Answer 1

Albert’s wife claim illustrates an error in thinking called hindsight bias. It is known as the knew-it-all-along effect. It is the disposition to see the event as having been predictable after an event has occurred despite of having been little or no objective basis for predicting it. People tends to view events as more predictable than they really are. After an event occurred, people often consider that they knew the result of the event before it actually occurred. Albert’s wife tends to believe that the bankruptcy of the five companies that Albert invested should have been predictable even its actually not.