Intuition

Back when I was at the Coast Guard Academy in the spring of my sophomore year, I took a road trip up to an all-women’s college in Connecticut. For the life of me, I cannot recall the name of it. It was somewhere near Hartford, I think. I was going with a buddy of mine who had a girlfriend up there. She was in the choir, and we were going to watch her sing. I was down for it. It was a target-rich environment.

So after the show, my man goes up to his girlfriend, and I introduce myself to the girl standing next to her, a petite brunette (my type) with a great smile. Her name was Amy. Now back then, there were no cell phones, so I got her mailing address and went back to the base and wrote her a few letters. I invited her to a date on the beach that summer, near Harkness Memorial Park.

So she makes the drive down to Waterford, and we’re sitting on the beach. It’s a fantastic day, bright sun, not too hot, gentle breeze, she’s as cute as ever, and I lean over to give her a kiss on the neck, when I look down and see her arms. They were the hairiest arms on a girl I had ever seen. Thick, black hair encircling her forearms. I aborted the kiss, went back to my side of the blanket, and thought about things for a bit.

I never called her again.

Yes, it was because of arm hair. I am that shallow, apparently. But I think there’s more to it than that.

Our brains are incredibly powerful computers, working in concert with an endocrine system that pumps hormones throughout your body. I saw the hairy arms, and my brain instantaneously made a billion calculations, projecting out into the future, of what a possible relationship might look like. What would a marriage be like? Would she insist on going to church? Would she chew with her mouth open? Would we fight? Would there be infidelity? Would we have hairy kids? And after the trillions and quadrillions of calculations my brain conducted, I decided that the relationship didn’t have much of a future. I didn’t think it, on a conscious level—my brain and my body made the decision together.

This is what we call intuition.

I am a big believer in intuition. I am a big believer in the idea that people are a lot smarter than they think they are. I’m not talking about anything supernatural, mind you. I’m talking about the idea that people instinctually know the right thing to do at any given moment. I am not the first person to say this. Malcolm Gladwell wrote a book about it. I read it, but is has been almost twenty years, so there is virtually no chance that I am plagiarizing him.

The obvious application of this idea is in finance. As a trader, I had to make 200 split-second decisions a day. They were necessarily instinctual decisions. On the screen in front of me, I had a few hundred inputs: interest rates, the price of oil, etc. I also had hundreds of inputs from the trading floor: all the things that people were yelling around me. My brain had to process all this stuff and come up with a price in less than a second. I was not being evaluated and compensated on the basis of my thought—I was being evaluated and compensated on the basis of my intuition, my split-second judgement. Trading isn’t the only job like that. There are lots of them, like operating heavy machinery, trucking, and sports.

Then there is intuition about people. My wife will tell you that I am incredible judge of character on the basis of meeting someone once, even for a few seconds. I’ll walk away from the encounter, saying, “I have a funny feeling about that guy,” and then a few years later he’ll turn out to be a villain. Probably the best example of this was in the mid-2000s when my wife and I were watching stupid TV and we had 19 Kids and Counting on. The producers were interviewing Josh Duggar, the eldest son, and I jumped off the couch, pointing at the TV, yelling “THAT guy is a scumbag!” As you know, he later was accused of molesting his sisters, cheating on his wife on the hookup website Ashley Madison, and eventually being convicted of possession of child pornography. But that was years, even decades into the future. How did I know? I have no idea.

There are thousands of car accidents in the United States every day. If you look at the accidents, you might think that people are accident-prone. Until you look at all the accidents that didn’t happen. How many close calls have you had in your driving career? In 30+ years of driving, I have had hundreds. In those 30 years, I have had one collision with another car, which wasn’t serious. You’re about to change lanes, and something doesn’t feel right—you sense that a car is in the other lane, even though you can’t see it. You see something developing a few hundred yards ahead of you, and take action immediately. My wife says I have very good reflexes, but that’s not quite correct. It’s the computer in my head, working with the body, to evaluate hundreds of inputs and make decisions in a fraction of a second.

The idea of feeling, not thinking, is pervasive in our culture. Follow your heart, not your mind. That’s exactly what Ewan McGregor tells a young Anakin Skywalker in one of the execrable Star Wars prequels. Feel, don’t think. The Objectivists would like a word. They believe in man’s rational mind. Our irrationality, as a species, is one of our weaknesses, they argue. But it is also one of our greatest strengths. The best hitters in baseball don’t stand there at the plate splitting the atom, thinking about what pitch the pitcher is going to throw next. They intuitively know. And they react. That is true of a lot of sports. If you intellectualize it, you will fail. It has to be instinct. It is also true of life.

Somewhat related is the idea of recognizing opportunity when you see it. In this case, I’m referring to economic opportunities. You look at a transaction and you know it’s a home run. My best example is the land we bought to build our new house. When my wife showed me the listing, I was like: you gotta be kidding me. This is real? This isn’t a typo? 9 acres of land a mile from the beach in coastal South Carolina, in the nicest development for 100 miles. They want how much? I couldn’t sign the closing documents fast enough. It was too good to be true, but it actually was true. We got that land for a song, and the sellers couldn’t wait to get rid of it. Six months later, it was worth twice as much.

I will say that recognizing economic opportunities does not come naturally to most people. Whether it’s a new job, buying a house, or a stock, or even buying plane tickets, people struggle with valuation. They can’t do the numbers. Again, if you intellectualize it, you will never get it right. Economic opportunities are also a feeling. It’s your brain and your endocrine system working together. When you know, you know. I have had a handful of transactions in my life that just felt right. It was a can’t-lose proposition. And every time, my brain and body have been right. It’s when I start doing all the CFA math that I tie myself in knots. But repetition and training help develop instinct. Experience counts.

We just turned on the Webb telescope, and we are finding that there are billions and billions of star systems in the universe with even more billions of planets that are capable of sustaining life, and for sure there are more intelligent life forms out there. And sometimes when I am in a plane, and I look down at New York City or Chicago or Los Angeles and look down at the city, I think, this is it? This is all we’ve been able to accomplish in human history, and most of this progress came in the last 200 years? But what makes us unique as a species isn’t our intelligence, but our emotions. It also makes us susceptible to extraordinary popular delusions and the madness of crowds.

We are incredibly complex creatures. But every day, we cheat death, fall ass-backwards into money, marry the right people, and create works of art. We should stick to our core competencies, and I’m not talking about thinking. We are taught not to trust our feelings, but feelings are simply higher-order thinking.

Go fuck yourself,

Jared

Music recommendation: Neil Diamond – Be. I am a huge Neil Diamond fan. And I went through a Richard Bach phase in high school, so I loved Jonathan Livingston Seagull. This was my jam when I was about 14 years old. My mom had it on vinyl.

P.S. We’re Gonna Get Those Bastards will always be free. Please forward to whoever you like.