This Week in History

On May 16th, 1860, a contentious Republican convention begins in Chicago.
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Held in Chicago from May 16 to May 18, 1860, the convention marked the emergence of the Republican Party as a major force in national politics and set the stage for the election of Abraham Lincoln as the 16th President of the United States. William H. Seward, a prominent senator from New York, emerged as the front-runner, but his perceived radicalism made him a controversial choice. After two days of debate and on the third ballot, the Republicans selected the former Congressman and little-known lawyer from Illinois as their candidate for President of the United States. Elected later that year with less than 40% of the vote, Lincoln brought former rivals like Seward, Salmon P. Chase, and Edward Bates into his cabinet to shore up support. Instead of surrounding himself with like-minded individuals, Lincoln appointed rivals and political adversaries to his cabinet, aiming to create a diverse team that could help him navigate the challenges of leading the nation during the Civil War. In the words of historian Doris Kearns Goodwin, Lincoln created a “Team of Rivals.” This unique approach to leadership, where diversity and dissent were embraced, is a significant aspect of Lincoln's legacy.
     You see, Lincoln wasn’t just fighting the Civil War; he was fighting Confirmation bias, a term introduced by English psychologist Peter Wason, referring to the inclination of individuals to prioritize information that aligns with, reinforces, or validates their existing beliefs or values. Once established, confirmation bias becomes entrenched and challenging to dislodge, shaping how individuals perceive and interpret new information. Instead of succumbing to the allure of confirmation bias by surrounding himself with ideological clones, Lincoln embraced dissenting voices and conflicting viewpoints. Instead of retreating into ideological echo chambers, Lincoln and his cabinet engaged in rigorous discourse, challenging each other's assumptions and perspectives. Through this process, they arrived at more robust solutions to the nation's complex problems, particularly during the tumult of the Civil War. Today, thanks to social media and the algorithms that show you more of what you like and less of what you don’t, we are living in the golden age of confirmation bias. I’m not saying social media has no place in an investor’s life. Just be sure to recognize it is a rival to good decision-making when you add it to your team.