Going for your gut feeling – Yes or No?

I have often asked myself this question and I am sure the same applies to you.

My view on this is that you should go with your gut feeling when you have a threshold level of relevant experience.

In my opinion, gut calls are usually very little if any helpful when it comes to looking at deals or similar investment opportunities requiring quantitative analysis and much more important but still not enough when it comes to picking or relying on people.

It is a fact that when I am looking at deals, I always look at the hard cold numbers. I rarely rely on gut feelings. Why? Let’s say for example you don’t know much about investing, and you’re debating whether to buy shares in Google or Amazon at the current stock price, your gut reaction whether to pull the trigger is almost certainly meaningless. There is very little chance that your “intuition” is worth betting money on, given that these stock prices are set by professional buyers and sellers who spend their lives studying these companies. Same goes for private companies or trading physical commodities – all based on hard cold facts and numbers.

By contrast, relying on your gut when it comes to people is always a great idea given that people at large are quite complex and imperfect. One caveat though: Always double-check your gut. Go beyond the resume. Dig for extra data. And don’t just make reference calls; they are rarely enough and make it even more confusing since we are still dealing with biased and imperfect people. Try to force yourself to listen, especially to mixed messages and unpleasant insights. Remember Former President Reagan’s famous quote? “Always trust your gut but verify”.

So once again, your intuition gets better the more life experience you get. The more experience you gain in life, the more likely you are to become a quick study in a new field. We all know for example how once you learn about navigating the politics of one organization, you are much quicker to learn your way around a new organization.

I know it’s tricky to know when enough experience is enough experience. But as you get more seasoned, you do get a better sense of when to trust your instincts. You learn when they are right, and trust them for that reason.

Hopefully for you, you get to a point quickly in life where you have seasoned instincts in your profession and in dealing with your family.

Share your thoughts…

Written by

Ziad K Abdelnour, Wall Street financier, trader and author is currently President and CEO of Blackhawk Partners Inc., a private equity and physical commodities trading firm based out of New York City, Founder & President of the United States Committee for a Free Lebanon (USCFL), Founder & Chairman of the Financial Policy Council, Member of the Board of Governors of the Middle East Forum and Former President of the Arab Bankers Association of North America.