Month: September 2016

Weigh Pros and Cons and then Follow Your Instinct

By Dean Hochman from Overland Park, Kansas, U.S. (arrows) [CC BY 2.0 (], via Wikimedia Commons

I read this article [1] that talked about how you should make decisions that utilized both your logic and instinct, where instead of mutually excluding each other from the decision, you should do a pros and cons list first, but then later on still go ahead to make a decision based on your instinct, because if your instinct compels you to make a decision over another even after a thorough logical analysis, it probably has some merit.

Funnily enough, soon after reading that article, I made two big decisions within a very short time frame concurrently which were completely opposite to each other – one being a consensus between logic and instinct, the other adhering to instinct even after the logical analysis.

Either way, the commonality of both decisions involved lots of unwarranted fear, and my experience in life so far has taught me that where fear is way overblown, it’s usually the right decision. I think this was the crucial deciding factor to following my instincts for both decisions.

Without spilling any details on both decisions (they are still in process and have lots of details that have yet to finalize), I think there were a few interesting takeaways from both decisions.

For both decisions, having had the time to think through the pros and cons way ahead of time of making either decisions meant that when decision time came, I had an anchor to navigate the very rapid decision making.

For the big decision that had a consensus between logic and instinct, the need for follow-up came fast and furious. I got a huge status update on my big decision yesterday morning, and I realized that I needed to get confirmations from 3 different people within the next 2-3  days. So even though I was still processing all the excitement, nervousness and stress from getting the big status update, I had to very aggressively find opportunities to talk to those 3 different people about confirmations.

Each subsequent conversation actually got tougher and tougher to execute purely from an emotional point of view, since I was already overwhelmed with emotions from the big status update, so every time each follow-up conversations went well it just added even more emotions to my existing bucket of excitement, nervousness and stress. Thankfully over all these years of learning to override at certain critical moments my bodily reaction of wanting to slow things down and process, I got the job done. And I think without having done the detailed pros and cons beforehand while I was not being rushed really helped, because I could just trust my assessment that was done beforehand and just focus on the execution.

To a lesser extent, the same applied to my big decision that only adhered to instinct. I knew it was the right thing to do lest I end up regretting not taking action, and for the certain few vulnerable moments where I really start questioning myself, I just pushed onward knowing that action begets action, and more or less once you start things kicking you can’t stop. That helped me achieve significant progress to getting to where I want.

For the big decision that had a consensus between logic and instinct, it really showed me what a black swan would look like.

For someone who prides in having a probabilistic worldview, who incorporates probability into decision making all the time, and who shares with people the human flaw of under-estimating black swans and over-estimating regularity, I still found myself a little shook from this explosion of information, emotions and need to make multiple quick decisions.

To be fair, I probably dealt it much better than any version of me up to this point could’ve dealt with it, since in terms of results I absolutely nailed it. But in terms of emotions I’m just currently a wreck, as I’ve had sleepless nights since Tuesday just trying to process everything.

But now that these few days of frantic quick decisions have been done, the consequences are starting to emerge. The timeline of the consequences has been pushed earlier by potentially half a year, which put lots of plans I had in mind out of whack. In hindsight I should’ve prepared more for black swans like this, but I’m lucky that I already started with my preparations long time ago so that I’m not fully naked now that the tides are going out.

For the big decision that only adhered to instinct, the key deciding factors of going against my pros and cons was realizing that most of the cons needed verification before deciding they were truly cons and applying a regret-averse framework to the decision.

I actually delayed making the decision for months. My initial pros and cons analysis showed that going ahead with the decision would just lead to catastrophe down the road. And since I’ve always predominantly used a value investing philosophy of “avoid catastrophe risk and the upside will take care of itself”, it made sense to not proceed.

But recent conversation with my friend made me question my assessment of catastrophe risks. Essentially it was made very clear that my assessment were based on lots of assumptions that I didn’t even verify. It’s one thing to know for sure that pharma companies have the catastrophe risk of misstep in R&D pipeline that could cause a permanent fall of grace due to a beginning of a vicious cycle of lack of blockbusters which lead to lack of R&D and so forth, but it’s another thing to think that some risks are definitely catastrophe risks without even considering the possibility of workarounds / compromises.

So instead of being stuck in fantasy mode, it made me want to investigate the actual reality.

Also the fact that I looked at the decision from the perspective of my death bed to see if I would regret not making the decision showed a strong sign of potential regret, I figured I should go ahead since I can accept failure but not regret.


[1] I unfortunately can’t find the link of the article… It’s one of the few unfortunate incidents where I remember the article but can’t find the source anymore.