Hello John,

Thank you for your considerate and thoughtful reply. Here are my thoughts to your points...

You wrote: "This will teach decisiveness — indeed, I learn decisiveness in life in general before I applied it to trading — but it will not give you intuitive expertise in a specific domain."

Life teaches much more than decisiveness, it also is a wonderful playground to deploy knowledge, memory, creativity, instinct, and intuition. In the traffic example I gave I used to tune into my intuition to anticipate whether the driver in front of me was going to change lanes, turn left, turn right, and so forth. This is excellent practice for intuition. Now that I live in New York the intuition game I play is to anticipate where the train doors will open on the platform so that I am assured of a seat on the rush hour train.

My overall point is that mastery is not just about grinding away the hours - 10,000 in your example - but also about paying attention to the world around us and seeing opportunity to practice using our minds to maximize the results of a chosen endeavor.

You wrote: "Re. analysis and creativity, I think we are talking at cross purposes here. Clearly it is useful for human beings to be creative in their analysis, and it is debatable how far that creativity belongs to system 1 or system 2. But investment decisions should be based on a model, not a gut feel: creativity is useful if it helps you build a better model."

First, I would argue, and have argued (see previous response and its references) that system 1 and system 2 are not what I am talking about here. So definitively, instinct and intuition are not the same thing. Also, creativity is super complex and not well understood by current neuroscience or current psychology, of which Kahneman is a practitioner. System 1 and system 2 do not adquately describe creativity either.

My own thought, based on my experience, is that creativity is a whole-brained activity and that it relies on knowledge to provide a grounds for interpretation of insight and as a reference for what kinds of questions need answering. But that there is an interaction with intuition that is the spark that provides the insight in the case of a truly original thought, and the connection in the case of a permutation of extant thought.

I agree with you half way that investment decisions should include modeling. In fact, I am on the record in my book The Intuitive Investor as saying that the ultimate goal is for every aspect of your mind to be exalted by the tools you use; and that the right brain, including creativity and intuition, are deeply neglected.

Regarding modeling...Facts by definition, are things that occurred in the past, but investing and its results unfold in the future. As you are building your model you may trust that past facts will repeat themselves going forward. An example of this kind of thinking is looking for "moats" around a business, or sustainable competitive advantage. This is another way of saying I am comfortable projecting past results into the future because revenues and earnings tend to be stable. But the operative word in "as you are building your model you may trust past facts will repeate themselves going forward" is trust. Trust is not a factual activity, but a leap of faith choice. Likewise, you may not trust that past facts will repeat themselves, instead preferring to predict that there will be a state change. Again, a leap of faith is called for to make this judgment.

So please tell me about the future facts of the market sans leaps of faith. Intuition is one of the tools in the toolkit and I have found it, as have many others, useful for understanding the future. That does not mean that it is easy. The task of charting out a course for the legitimacy of intuition is difficult (as all new endeavors are) because of the need for good nomenclature to allow for distinctions, and hence discussion and exploration, as well as skills that allow people to have valid experiences with the material.

You wrote: "I am not sure what you are saying here, but this is exactly the point I am making..."

I was responding to this from you: "There are such things — in particular, the subtleties of human social interactions, which we are all more-or-less naturally adept at understanding — but I do not think it is plausible that the relevant kinds of things exist in the financial markets. Human beings are naturally very bad at understanding financial markets!"

My point was that the science of the mind and its workings is very young and that I am willing to engage in these discussions as a way of moving the study of intuition forward. I think that the left brain and right brain working in concert are a potent combination, but that there is a gross imbalance given to left brain analytical thinking having nothing to do with the right brain's potency, but more with a lack of nomenclature to describe states of consciousness and skillset built around that consciousness. It will take a long time for this work to help us better understand human behavior, human choices, and hence financial markets. On the scale of the lifetime of a human being it may seem as if this takes forever, but on the scale of history it will happen rapidly.

You wrote: "I think perhaps you are thinking of science too much through the eyes of an individual scientist. Scientists may make “intuitive leaps” (really, an organisation of facts that takes some time to brew in the mind). But a “leap” can also be a leap into a precipice — it can be completely wrong. Our understanding of the cosmos has not progressed because we all have intuitive leaps; it has progressed because individual scientists incrementally understood more and more things, wrote down what they understood and why they understood it, and subjected their ideas to public criticism from other scientists. The important bit is all system 2."

I think of science as scientific method divorced from its modern scientism aspects. In other words, it is a logical system that naturally flows from its metaphysical assumptions. I also think that experiences not described by science remain valid while they await science's blessing. Scientists spent decades trying to prove that dogs think. Were dog owners waiting around impatiently for science to acknowledge every dog owner's experience with dogs? Hardly. I am hosting a discussion on intuition because I know that it is important; that it is distinct from instinct; that it is tricky to describe; and because there seems to be a convergence happening between physics, neuroscience, and psychology that can help inform the investment profession about this subject.

I very much like your description about the difference between the individual scientist, and science, as a whole. That is certainly an important distinction and you are right that I was more focused on the individual.

You said something interesting here when you said, "[science] has progressed because individual scientists incrementally understood more and more things, wrote down what they understood and why they understood it, and subjected their ideas to public criticism from other scientists." I could not agree with you more. I think intuition is a way of understanding the world, a sense, in fact, that is comparable to our other senses. Further, the process you describe is exactly why I am putting my thoughts in public and trying to advance the discussion.

I still disagree with you that system 1 and system 2 are all that is needed to describe our experience of mind.

You wrote: "A good investor (and certainly a good wealth manager) needs to be like an engineer. Read the “text book” and apply it, that’s my advice."

Thank you for sharing your point of view with me and the audience.

You wrote: "E=mc^2 is not a definition. Energy and mass are different concepts. Einstein’s theory was an act of scientific modelling, not an act of grammar. Your “model” is an act of grammar. This is clear if we do a thought experiment. If I said to you, “X is a case of intuition”, you might reply, “no, X is not sensory stimulus followed by interpretation and is therefore not the kind of intuition we are talking about here”. If I said to Einstein, “heat is a form of energy that does not fit your theory”, Einstein could not reply “oh, heat does not count as energy for the purposes of this paper”. He would have to reply, “actually, that case does fit my theory”."

First, in your thought experiment Einstein would have been the beneficiary of the fact that heat was already acknowledged as energy so his theory did not have to prove it was a form of energy, it simply needed to explain its equivalency with mass. In charting out intuition there are many that deny its existence so it is a bit tougher. Also, E=MC^2 is a definition. There are many sources that discuss this, but I refer you to "The Quantum World" by Ken Ford, retired director of The American Institute of Physics who describes (pp. 191-192) it: "Mass and energy, which prior to Einstein's work were thought to be distinct and unrelated concepts, are drawn together into a simple relation of proportionality by Einstein's equation." He also describes it as an equivalence (p. 17) with the speed of light simply being a scalar.

My definition of intuition is that it is a sense, so intuition = a sense. Yet, intuition, just like the other senses requires an interpretation, too. So for example, in acoustics they say that sound = disturbance of a medium by vibration with a listener. To an acoustics scientist the answer to the age old philosophical question, "If a tree falls in the forest and there is no one there to hear it, does it make a sound?" is "no, it does not make a sound because there is no listener." In intuition, if the interpretation is bungled then there is no intuition.

I think what you may be after is the mechanism by which intuition works. Because you deny its existence it seems to remain an abstract concept. But I do not want to put words in your mouth so please correct me. As for the mechanism by which it works. I think that quantum physics demonstrates that consciousness is a non-local wave phenomenon. I would characterize intuition as the sense that allows consciousness to attune with non-local waves.

Hope this helps with your understanding : )

Jason