Intuitive and Non-Intuitive Thinking

Good intuition comes from years of knowledge and experience that allows you to
understand how people and the world works. Many situations are intuitive. Some aren’t.

Intuitive thinking is important. Equally important is non-intuitive thinking.

Non-intuitive thinking provides some of the best opportunities to learn and grow. Book
knowledge is important. However, with first hand experience you learn those areas that
aren’t intuitive thinking. Another term that is commonly used for non-intuitive thinking
is: learning the ropes.

Mentors, coaches and teachers work closely with their students to help them learn the
intuitive thinking as well as the non-intuitive (and counter intuitive) thinking about a
subject.

With experience, practice and wisdom, non-intuitive thinking can sometimes become
intuitive thinking.

Intuitive Thinking and Non-Intuitive Thinking

When working on a task it makes sense to look for the obvious solution first.

If the solution doesn’t present itself, look for the not-obvious one.

And, when attempting to answer a question look for the obvious answer first, then look for
the not-obvious one.

Keep in mind, so-called common knowledge may not be correct. Critical thinking works best
when you continually ask yourself:

* Does this make sense?

* If so, why?
* If not, why not?

Keeping an open mind to new data and options is another element of sound critical thinking.
The critical thinker tests new experiences and knowledge against past experiences and
knowledge.

If the new experience or information is consistent with what is known, he keeps his view. If
not, he strives to learn why there is an inconsistency.
Once resolved, he either keeps, or alters his frame of reference to account for the new
information. A frame of reference includes experience, education, upbringing, culture and
many other factors that contribute to how someone views the world.

A Intuitive vs. Non-Intuitive Thinking Example

Here is an example of intuitive thinking vs. non-intuitive thinking. At the end of the example
ask yourself:

* Will this information change my frame of reference?

* Or, will my frame of reference remain unchanged?

A common statement everyone has heard is: “Buy low and sell high.”

This seems straight forward. However, there is another way of looking at this that is counter
intuitive.

William O’Neil, who started a successful financial paper known as Investors Business Daily,
says that a more effective way to make money in stocks is to “buy high, and sell higher.”

O'Neil argues that the fundamentals of a company’s stock are important. They include
things like how financially strong the company is, whether the company’s sales and earnings
are increasing, whether it is well managed and so forth.

According to William O’Neil, the technical aspect found by studying charts of a stock is
equally important. They include price swings, volume, ownership by management and more.

These charts reflect the emotions of investors such as greed, fear, hope and despair. These
emotions help explain dramatic increases or drops in a stock price even when the company
seems to have strong fundamentals.

O’Neil feels stock prices are governed in a large part by these emotions. This needs to be
taken into account to be a successful investor in the stock market. In other words, stocks
that are doing well continue to do well. Falling stocks tend to keep falling.

Stock Price Movement

Here is the train of thought he followed.

Many investors who buy a stock at a high price will hold on to it when it has a significant
(sometimes dramatic) price drop. The emotion to “not be wrong” (and sell for a loss) is
strong.

A stock may decrease significantly even when the company fundamentals seem to be
excellent. Stock swings are frequently indicators that the fundamentals may change in the
next several months.

Many stocks that have a severe correction eventually move back up in price—slowly. A high
percentage of people sell these stocks when they regain the original price they paid for
them. They are happy to get what they put into the stock originally. And, they fear the
stock will decrease again.

When this stock reaches a new high, most investors (who were happy to get their money
out) no longer own the stock. Then there is minimal downward price pressure.

According to O’Neil, it might be a good time to buy the stock if it has good fundamentals,
fits certain technical patterns and the market is bullish. The stock will frequently move
higher quickly.#1

O’Neil has become a successful and well known investor using this philosophy.

Does this reasoning make sense to you?

* If so, why?
* If not, why not?

What kind of information would you need to question conventional wisdom?

For a concept like this (assuming you haven’t heard about it before) to make sense, you
would need to do some significant research before changing your mind.

Money is tough to make and easy to lose if one isn’t careful. Changing one’s beliefs on
investing shouldn’t be done without doing considerable research.

If a person has held a belief for a long time, a single argument probably won’t change his or
her belief immediately. This is especially true for any belief that an individual feels strongly
about.

This is normal. However, if a new idea or concept sparks a serious question in your mind
about what you believe in, then that spark can encourage you to do your own research and
learn more.

Different reasoning may even change your point of view. This occurs if you find
convincing facts and data to back up the new information you have learned.

Other times, you may investigate a subject and are unable to find enough information that
convinces you to change your belief. If this happens you will hold to your original belief.
Either way, you haven’t taken things at face value. This is a strong trait of the critical
thinker. This philosophy helps increase your knowledge base.

Discovery of Non-Intuitive Things

There are three ways of discovering non-intuitive things. They are:

1. Gaining more experience.

Experience is a great teacher. The greater your experience, the easier it is to see the
similarity between new ideas and what you learned in the past.

Experience teaches you what kind of projects, objectives or problems are straight forward.
It also teaches which ones may have non-intuitive (or counter intuitive) issues to address.

In other words, experience hones your intuition. It can make non-intuitive thinking become
intuitive thinking.

2. Experimentation.

Experimentation can help you uncover inconsistencies. Tinkering is a great way to discover
something that isn’t consistent with what you thought.

3. Learn by reading, studying & through teachers and mentors.

The more you build your base of knowledge, the more you learn about the nuances,
differences and subtleties of a wide array of mysteries. Intuitive Thinking and Non-Intuitive
Thinking become easier.

#1 O’Neil, William J. How to Make Money in Stocks—A Winning System in Good Times or
Bad (New York, NY, McGraw-Hill)