Another Book Review

I recently read a book entitled Blink: The Power of Thinking Without Thinking by Malcom Gladwell. In it he proposes that using our intuition to make “snap decisions” is valid and these decisions often turns out more accurate than a more robust decision process. He provides some anecdotal evidence and studies that support his theory, but other books provide anecdotal evidence and studies that show that most bad decisions are a result of a hasty and faulty analysis. Obviously, I don’t agree with the premise that snap decisions are reliable.

• Many investors lose money. They rely on hunches and tips that “feel right”. Those that do their homework and proper analysis achieve better results.
• Our first impressions regarding our relationships are often all wrong. Why is the divorce rate so high if our intuition is so strong?

Gladwell makes the point that good judgment often supersedes detailed analysis (his example is people who are experts on art). That certainly seems to make sense. People get good judgment in a particular area due to intensive training and extensive experience. I maintain that it is not their intuition that guides them or their “unconscious computer” as he calls it, but their ability to do a thorough analysis “on the fly” due to their expertise. Most of us would have to perform a detailed analysis, with some tools (whether it be DecisionPlanner or a pen and paper), to arrive at a reasonable conclusion. Folks with extraordinary expertise do this without the tools and in a fraction of the time.

A couple of other observations Gladwell makes:

• Too much data is bad. “Analysis paralysis” is certainly to be avoided. Sometimes people just collect data to procrastinate. Often a lot of the data collected in the decision making process is just irrelevant. Those people with “good judgment” know, from experience, which data matters and therefore are able to arrive at a solution faster. Those of us without that expertise will have to decide which data matters, and we won’t always be right.
• Our prejudices and biases get in the way of effective decision making. Our prejudices can be eliminated or minimized with effort, and should be.

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