Our untrustworthy gut
We seemed to have found what was the perfect apartment. It was new and had been finished to a very high standard. There was plenty of space for the kids. My wife would get the kitchen of her dreams. There was underfloor heating throughout. The master bedroom had a walk-in wardrobe and large ensuite bathroom.
It was a relief because we had spent the best part of a week in Zurich viewing apartments. Driving around the city with two small kids in a fully packed car was exhausting.
The following day we filled in the application form and a week later we were shortlisted for an interview with the landlord. I went alone for the interview because my wife was still living with the kids at our home in the French-speaking part of the country.
The door opened and the landlord, Dr Bollinger introduced himself. He was an elegant middle-aged silver-hair man. I guess he had a PhD in something, which I assume bore no relation to champagne. He seemed nice.
The thing is for some unknown reason, I wasn’t sure about the apartment.
The thing is for some unknown reason, I wasn’t sure about the apartment. There was something that bugged me about the place. So I negotiated aggressively with him – not something people tend to do in Switzerland, but I had nothing to lose. He knocked of CHF150 and I smiled politely. So I decided to stay silent and he got nervous and kept talking.
He told me how beautiful the apartment was. He had only used the finest materials because it was originally his family home, which he knocked down and built into apartments. He wanted to make his tenants feel comfortable in a way that other landlords wouldn’t think of doing. My silence seemed to make him more and more nervous.
In the end after his long awkward monologue, he capitulated and offered me a month’s rent-free. He told me not to worry about the deposit until I could comfortably pay it.
I told him I would sleep on it.
We have all been there before. It’s a gut feeling that we can’t quite explain. Interestingly, a lot of decisions we make are based on this feeling, even if we aren’t fully aware of it.
The story I just told was something I only really thought about a few weeks later. For me it was a classic example, where I had already made up my mind before I consciously knew it. And, this is an experience that many people have in their day-to-day lives.
What got me thinking about this event was a documentary I watched recently, titled “Automatic brain – The magic of the unconscious mind”. The filmmakers carried out an experiment on a group of people, asking them to balance a long wooden stick with some sort of contraption.
When they asked the participants afterwards how they did it, they often attributed their success to a certain technique that they had thought out. For example, some believed it had something to do with balancing on one leg, while others believed it was more to do with their arms. More bizarrely, a few people in the test group actually carried out some ritualistic activities fuelled by a superstition that this would help them.
What they didn’t know was that the filmmakers were studying them. Many in the group experimented with different techniques, and when they managed to balance the stick for a long period of time, they attributed this to their success. The filmmakers, however, found that they had all unwittingly learnt the same technique after studying their eye movements and body language.
This type of subconscious learning is quite common. For example it takes years for a baseball player to become professional. When they go up to bat, the ball moves so fast that it’s impossible for them to physically track it with their eyes before hitting it.
The truth is that he just needs to stare a little bit into the future.
We know that a good batter should be able to hit the ball. But how does he do it? The truth is that he just needs to stare a little bit into the future. His brain has learnt how to automatically calculate where the ball will be before it even leaves the pitcher’s hand. Without knowing it consciously, the pitcher’s position and movement give it all away. There is a great mini documentary if you’re interested on YouTube.
A lot of baseball players don’t consciously realise that they do this unless it’s pointed out. It’s something that their brains have learnt to do automatically. And, there is a good reason for this.
In these situations there is little time to consciously examine the situation because if we do it can actually be detrimental to the outcome. For instance, baseball players can psych themselves out when they go up to bat. Promising careers have ended this way. Michael Lewis writes about this at length in his critically acclaimed book “Money Ball”. Don’t worry, you don’t have to know much about baseball to enjoy this book – I know very little about the sport.
This type of thinking fascinates me. It’s fast and a lot of the time we are unaware that we actually do it. It turns out that this is a survival mechanism that we have evolved as humans. Daniel Kahneman, who won the Noble Laureate in Economics, studied it at length in another very popular book call “Thinking, fast and slow”.
Here is a synopsis of the parts that relate to what I am writing about. Humans have evolved two forms of thinking. The first is what we have described above: a fast and automatic form of thinking that is driven subconsciously, which Kahneman calls ‘system 1’ thinking. The second is the slow and a more logical form of thinking that happens at a conscious level. Kahneman describes this as ‘system 2’ thinking.
Both forms of thinking are important, depending on the situation we are in. I am going to examine the fast, automatic ‘system 1’ form.
There was no way I could have heard it, but I knew instinctively that it was coming.
I was about to cross the road. I was listening to music on my iPhone. I paused momentarily, looked to my left and saw a tram heading my way. There was no way I could have heard it, but I knew instinctively that it was coming and I stepped back. It was an automatic reaction. Upon reflection, it was probably the other pedestrians who gave it away when I saw them turn their heads in the direction of the oncoming tram. But, I hadn’t realised this at the time.
It’s a bit like the policeman patrolling the local neighbourhood. He sees someone on the street. For reasons he can’t explain, he has a bad feeling about that person. After years of experience he knows that he is often more right than wrong.
Doctors have also told similar stories. They see a patient and there is something odd about their symptoms, but they don’t know what it is. On a hunch, they run a test and detect something life threatening.
In all these instances, ‘system 1’ fast thinking is vital. However, life is not that simple. In the modern information age, this method of decision-making has its shortcomings.
…the human brain struggles to cope instinctively in the modern world.
Nassim Taleb gives countless examples in his book “Fooled by Randomness” on how the human brain struggles to cope instinctively in the modern world. We see patterns where there are none in the masses of data that we receive, which can lead to disastrous decisions. We also have a tendency to woefully underestimate the risks we face because we either don’t know what they are or we underestimate their probability.
There is actually a whole body of research, which explores these weaknesses. It seems our ‘gut feeling’ or ‘system 1′ thinking is indeed powerful, but it’s not so great at handling things like complex financial data. Our brains have not evolved quickly enough for the problems we face in the modern world.
There is however, a certain seductive quality about following our intuition. There is a common belief that good businessmen have a good gut for great decisions. Luck is unfortunately often mistaken for skill and there is to a certain degree of survivorship bias here – unlucky businessmen go bust.
We also like to give weight to information that confirms our assumptions and prejudices. As creatures of the status quo we will justify and perpetuate current conditions and focus on the first information we receive. As a consequence, we become ‘anchored’, which distorts how we make subsequent decisions.
We also have a deep-seated need to see patterns.
We also have a deep-seated need to see patterns. Here, our brains synthesise the past and use this to understand the present and anticipate the future. It can also lead to ‘group thinking’. We copy each other, making a trend self-fulfilling – do you remember the tech bubble or the sub-prime mortgage market. Even experienced investment professionals can be seduced.
Despite its faults, however, the intuition of the gut is fascinating. It’s a very intimate human experience and it would be a tragedy if we completely replaced it with robotically automated processes.
There is a certain beauty in how this form of automatic thinking actually works. Gerd Gigerenzer in his book “Gut Feeling” explains that our brains mentally draw a number of ‘rules-of-thumb’ subconsciously from our evolved capacity and the environment we live in.
An experienced policeman or doctor will have worked long enough to know when something is not quite right. Apart from the immense knowledge and conscious experiences they have built up, their ‘system 1’ part of the brain has instinctively learnt a few things too. Sometimes this can even be drawn from their conscious ‘system 2’ mind’s ability to learn.
If you have ever tried to learn a language you will know what I mean. In the beginning it’s a struggle trying to remember words and understand the rules of grammar. When you try to speak you are constantly trying to think about how to form your sentences and translate from your own native language. But, eventually something happens. You find that the words come automatically and you don’t have to think too hard to talk.
What your subconscious has learnt might also just be plain wrong.
What this means is that if you haven’t done something long enough you can’t trust your gut. Your mind hasn’t had time to draw rules-of-thumb based upon your experiences. It also hasn’t had time to digest the conscious knowledge that you have built up – if any – to react automatically.
What your subconscious has learnt might also just be plain wrong. An unsettling experience as a child might give you a phobia of clowns that lasts into adulthood. It’s not logical, but you are scared of clowns nonetheless.
However, there are times when intuition does work. Going back to the apartment in Zurich that we subsequently passed up on. It turned out to be the right decision.
There was no privacy because it was on the ground floor. All the floor-to-ceiling windows faced out into the street, which meant that we would have had the blinds down, most of the time. It was also really expensive. We found an equally nicer apartment on the other side of the lake for CHF1,000 less.
In hindsight, a lot of this was obvious after I had time to process what I had seen. I’ve had an awful lot of experience searching for property in the notorious Geneva area. But the fatigue of apartment searching had got to me and I could quite easily have ignored my gut because it was a very nice apartment.
To sum up, I agree that your gut is not always very trustworthy. However, this is not a story about trusting your gut. It’s about learning to listen to it from time-to-time when it is right.
