I often think about the role intuition has played in my investment career. When I look back, some of my best decisions came when I listened to that “little voice” inside me. Conversely, some of my worst decisions came when I didn’t listen to it. Professional investors are highly analytical and often pride themselves on making unemotional and fact-based decisions. Yet, while facts and data are important parts of the investment mosaic, they can never complete the picture. You can never be 100% sure that you are making the correct decision just because your facts mosaic is comprehensive and complete. The reason, of course, is that you are still dealing with the future, and the future can never be known with 100% certainty, in fact, the future is very far from 100% known. Yet, over and over and over, I have seen highly intelligent investors insist on more and more data and facts before they come to a decision. Past a certain amount of facts and quantitative input, this is pure folly because the additional information to be considered is often not that impactful.
All of this is only complicated by the investment world we have entered into with the emergence of artificial intelligence. The technology is so new and powerful, that all we can do as reasonable investors is make an informed, if not “intuitive” judgment about its potential. The potential can be defined as the Total Addressable Market, or TAM as it is commonly referred to. But even taking a shot at the TAM can be laughable, especially with a technology that we have never seen before.
There are clues from past examples. I don’t remember any investor that actually grasped how big the internet was going to be, or the advent of mobile phones. These technologies changed how human beings communicate. The migration of billions of eyeballs to the net allowed companies with digital products to scale immediately if they had a product that was successful. The marginal cost of moving bits is close to zero so product and economic scaling can take place in a short and rapid time period. Google, Amazon, and Meta, amongst others, are examples of this. But the key takeaway is that no one really ever imagined these companies would create trillions of market value when the net emerged as a primary part of the human experience. And there was no discounted cash flow model or solid facts that would have told you with any certainty the value of these companies and what the ultimate “TAM” was going to be. No doubt, some investors got it right more than others, but I would venture to guess that even those that got it right would admit that it far exceeded their expectations.
How can we harness the power of intuition? Stop and think for a moment. Have you ever just had a feeling about something or that something good or bad was just about to happen? If that feeling turned out to be true, you probably thought back to that moment when that feeling presented itself. While we may not recognize it in the moment, usually thoughts like that emanate from fact patterns that emerged and that are familiar to us from past experiences. Recently, I was playing golf with a friend, and I was putting well that day. On the back 9, I had about a 12-foot putt for a par, and my friend suggested the line which made sense to me and in addition he suggested that I had no excuse to miss the putt since the line was known. Now, a 12-foot putt might go in 20-25% of the time, yet I had a feeling, and was especially motivated by his challenge, that I was going to make it. Sure enough, I dropped it dead center. The “facts” and historical “data” were not in my favor, but that feeling just came over me and allowed me to make a focused and confident stroke.
Of course, investing is not a physical undertaking. It’s an analytical and intellectual process that can play out over several days or weeks and sometimes in minutes when making the initial decision. Intuition plays a heavy role in the ultimate decision. I was going to say that we don’t teach it in higher ed, but before I stated that, I thought I should check AI and see what it came up with. This is what Google Gemini answered to my question, “Are there classes at the high education level that teach intuition? Here’s Gemini’s partial answer that is relevant to investing:
“While intuition is often thought of as a “mysterious feeling,” higher education increasingly treats it as a trainable cognitive skill. You won’t find a major called “Intuition,” but you will find classes that teach it under the guise of Expertise, Creative Studies, or Heuristics.”
Gemini then cited examples of where intuition is taught at the university level as it relates to medical schools, law schools, and…business schools. Specifically, to business schools, Gemini mentions Columbia Business School’s “Developing Quantitative Intuition” which teaches executives how to make fast decisions with incomplete data by spotting patterns in numbers rather than just running formulas. Interestingly, they later renamed the course, “Leadership Intelligence in the AI Era.” This partial description is very interesting to me: “In a modern business environment flooded with big data and AI outputs, decision-makers frequently fall into “analysis paralysis” or mistake computational volume for clarity. The course does not focus on advanced statistical programming or math camp. Instead, it teaches leaders how to balance data intelligence with human judgment and business acumen to make fast, sound decisions even when information is incomplete, ambiguous, or generated by opaque algorithms.”
I like the second name much better. The key, again, is fact patterns. Fact patterns that produce clues to outcomes even with incomplete information. If you are highly intuitive, you learn to trust that little voice that speaks to you and you are willing to move quickly before others because of your conviction. Fact patterns occur over a lifetime of experience. Highly intuitive people learn from these fact patterns and trust their conclusions while others fail to act and lose the opportunity that is presenting itself. It is a power we all should be interested in if we wish to succeed.
In a recent article by one of my favorite research services, 13D Research & Strategy, they suggest that senior executives rely on intuition more than junior executives and that studies suggest that intuition-based decisions are 20% more accurate than purely analytical ones.* This makes sense to me and is consistent with my own development of over 40 years of investing. When I was young, I focused more on “value” investments because I could quantify what a company was worth and many times these left-brained exercises were powerful if my fact gathering and data analysis were ahead of others. In the 80’s and 90’s, this was pretty effective. But starting with the emergence of the Wintel franchise in the late 90’s, the game began to change (Microsoft Windows and Intel). Moore’s Law, the doubling of compute power every 18 months, created a non-linear inflection point in the world of microprocessors and forever changed the business and investment landscape.
In Part II, I will give examples of how I have used intuition in my career and how it led to some great successes but also some horrible mistakes when I didn’t listen to it.
*” What I Learned This Week, 13D Research,” August 28,2025.