Is intuition more efficient than brute force analysis?
Sometimes when I am trying to analyze a really complicated investment thesis, its almost like using my intuition I can arrive at a solution way faster than if I try to analyze every minutia consciously. Its also a feeling of knowing the answer without knowing why you know the answer, and also there is no paralysis of analysis. Anyone else can chime in on how much you rely on intuition?
2 sides to the coin.
Firstly, it's a hallmark of experience, and if you're truly experienced enough, it can beat out most overcomplicated models out there. I'd like to say Buffett is a prime example of this - he likes to talk in simple, vivid stories and anecdotes, and shits on the overly academic approaches out there like Beta and CAPM. It took academia decades to catch up with what he was doing with his intuition and deep understanding of Grahamite teachings.
On the other hand, I recognize what you're saying as a prime example of what Damodaran cautions against as inherent biases in valuation. You go into your analysis with a subconscious bias already in mind, and without realizing it, all the inputs in your model magically fit your preconceived bias. Investing is soft enough that you can twist any analysis to fit your bias.
It's a hallmark of the greats in finance, that they are able to balance these 2 sides subtly. Having enough experience and knowledge to have superior intuition, but not blind enough to just introduce the bias into their model without knowing it
Shhh. Don’t let people know that a massive portion of finance is really just complexity for the sake of complexity
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