Monday, May 17, 2010

Chapter 12 - Basic Intuition

We've all experienced basic intuition to an extent. It could be small, such as calling the all-in bet on the river of a poker game when you only have a pair of twos. It could be buying stock in Apple when it was falling. It could even be going to Dominican when everyone else tells you to go to a different school. We make decisions based off our intuition, or gut feeling, all the time. Whether it turns out good or bad is a whole different story.

Chapter twelve focuses a lot on individual decision making and one form of decision making is simply intuition. Our book defines it as "a process, intuition is automatic and involuntary." The book also provides an excellent example of a great decision that was made because of intuition. The decision was Ray Kroc purchasing Mcdonalds from the Mcdonald brothers. It wasn't a rational decision at the time, but that didn't stop Ray from making $500 million from the purchase.

Sometimes you have to trust your gut on decisions that don't seem right on the surface. It's often these decisions that will net you the most profit. But that doesn't mean you should avoid using rationality as well. The best decisions that you can make are the ones that include both rationality with intuition.

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