"The mind that makes up narratives about the past is a sense-making organ. When an unpredicted event occurs, we immediately adjust our view of the world to accommodate the surprise."--Daniel KahnemanHindsight bias is the tendency to construct one's memory after the fact (or interpret the meaning of something said in the past) according to currently known facts and one's current beliefs. In this way, one appears to make the past consistent with the present and more predictive or predictable than it actually was. When a surprise event occurs and you say "I knew it all along," you probably didn't. Hindsight bias may be kicking in.
Hindsight bias accounts for the tendency of believers in prophecies and psychic predictions to retrofit events to past oracular claims, however vague or obscure (retroactive clairvoyance). For example, after the Challenger space shuttle disaster that killed seven U.S. astronauts on January 28, 1986, hindsight bias was used by followers of Nostradamus to claim that he had predicted it in the following verse: