Hello John,
Thank you for your fantastic and very thoughtful response and for your willingness to engage in a conversation. I will try and take your points, in turn.
* RE: "There is a literature on the development of abilities."
I would love for you to send these on to me. Perhaps by posting links here in the comments section for me and for other readers?
* RE: "I think that investors who think they apply intuition successfully are kidding themselves. Most investors do not get deliberate practice (that is, effortful practice with clear, quick feedback) because most investors do not track the results of their decisions clearly and because, even for those that do — say with proper attribution of every single decision — feedback tends to come a long time after the event."
I agree with you entirely that the organization and interpretation of intuition takes a long time to develop. I certainly do not consider myself to be a master, say in the same vein as a sommelier is an expert at distinguishing grapes and vintages. Did you happen to read my post that essentially argues your very point about the proper way of measuring your investment success? You can find it here: http://blogs.stage.cfainstitute.org/investor/2014/05/26/how-to-measure-… Essentially what I said was that investors must become much more aware of the decisions that they are making and to improve their consciousness to be able to record their decisions.
* RE: "...to notch up 10,000 hours would take an implausible amount of time."
Several points...investing in its most general form is simply making decisions now that you hope result in benefits exceeding costs. We make these kinds of decisions all of the time. What route to drive home is not that different from which security to purchase from an issuer. So practice opportunities abound for investors. In my book The Intuitive Investor I argue that one of the things that makes you much better is to switch your primary context/mental filter to that of an investor. When you do this, then the walk through Times Square becomes an opportunity to learn as an investor. There are approximately 5,844 waking hours in a year so there is much opportunity to master anything that one desires to master.
Next, if intuition is a sense, which I think it is, then it is in operation all the time in any case. So it is portable. Where you go, it goes. So there is ample opportunity to utilize it.
And I think you would agree with me that 10,000 hours is an arbitrary number, certainly not a definition, or a model, and pretty squishy data.
* RE: "Your account also requires that there should be something there that can be known intuitively."
Here we probably disagree. I do think there are things to be known intuitively. Think: the mood of the market, for example. You took the conversation to a domain where it sounds like you think intuition might be in operation, "the subtleties of human social interactions." But I think intuition, while useful in this domain, is a bigger and better tool than that and can be more interestingly utilized. Question for thought: from where do scientific breakthroughs come? What happened before the big bang?
Also, you seem to have an implicit mental model in operation with regard to 'analysis.' Namely, that it is a purely rational process. Here I quote from the comments section of another post that I think will express my view point and highlight the importance of creativity and intuition in analysis:
"Regarding your point about good deductive reasoning…I used to say, and still on occasion say, when being interviewed on the subject of investment management that it is exactly like detective work, equal parts analysis and creativity. If you were to invite 10 detectives to a crime scene, say a bank robbery, there is certainly something to be said for the skill level of fact gathering. But there are literally a billion points of data that could be relevant. But the detective that solves the crime is the one that can identify the pertinent facts out of the myriad number of them – I consider this to be a rendering of creativity – as well as, and more importantly, understands the story that the facts are telling her and who can reconstruct the theory of, or story of the crime. Creating a narrative around facts is a creative process. So, more directly, I think deductive reasoning is an example of the holistic marriage of analysis and creativity. My own opinion is that many people think of creativity as synonymous with the arts or with “what’s new.” When, to my mind, creativity is also about choices around connections, or permutations of knowledge. Another bias is that the developers of logical topology are, well, logical. If logical topology had been developed by Picasso or Dali I think we would think of reasoning as more creative than we normally grant it to be."
So, in other words, I think that creativity and intuition are the silent and underappreciated partners in reasoning. Including all 'Aha!'/break-through moments.
Also, I agree with you that people are bad at understanding financial markets, but they were also very bad at understanding the cosmos for literally millions of years. Most of the breakthroughs in scientific understanding having come only recently in terms of human history. I would argue that astrophysicists inventing a 90% plug, dark matter and dark energy, that is the method for adapting relativity to the reality is a metaphysical leap of faith.
* RE: "Finally, on your proposed model of intuition: this is really a definition, not a model, and it is so wide as to encompass anything."
If you take Einstein's simple model of energy, E = MC ^2 and recognize that C ^2 is simply a constant you have a very simple model: energy = mass. This is a widely accepted simple model...and a definition. So I accept your comment as a compliment.
I do not reject Kahneman's System 1 and System 2 thinking, I say that it is incomplete. Take a look at this post to see more of the reasons why, as well as my definition of intuition: http://blogs.stage.cfainstitute.org/investor/the-intuitive-investor-def…
For example, Kahneman's System 2 presupposes knowledge, but cannot really explain innovation or intuition. So naturally I agree with your stating, "the alternative you propose can co-exist with it perfectly well."
Thank you again for your comments!
With smiles,
Jason