How to take tough decisions

Trust your gut or build a multi-year model
🚫😨 Longer-term and high-level models may not provide the clarity needed for individual decisions. These models are often focused on broader strategies and may not easily translate into specific actions for daily choices. Or as John Lennon once said, “Life is what happens to you while you are busy making other plans.”

💡 Got it! This is all about trusting your gut feeling!
While intuition plays a crucial role in decision-making, it’s essential to remember that emotions and intuitions rely on simple pattern recognition. They might not delve into detailed analysis or provide clear guidance in complex situations.*

🤝 In our opinion, it is not a question of either or, but of combining the two:
Trust your gut feeling. And back it up with a multi-year model.

To enhance decision-making, you can train your intuition by formulating expectations. This involves identifying theses based on data and observable indicators. By comparing the results to your expectations, you can intuitively interpret outcomes and gain confidence in your decisions. Drafting a financial model is one way to formulate expectations systematically. It guides you through the thinking process as the basis of your financial story, helping you align your decisions with your expectations.

This method of setting expectations is heavily relied upon in professional sports. 🏅 Athletes like Nicola Spirig emphasize having a long-term vision while also setting daily goals and expectations for each training day. Spirig’s approach included picturing the entire Olympic race and every possible race situation in advance, preparing her to act without hesitation.** This clarity in objectives helps align efforts and teamwork.

By applying these principles, individuals can strive for excellence in their endeavors, whether in decision-making, sports, or any other aspect of life.

What counts? How do you count it? Make it count! 🙌
*Recommended Reading: Kahneman, Daniel. Thinking, fast and slow. New York (2011)
**Watch the rewind video of the “Closest Ever Triathlon Finish” of the 2012 Olympics in London to understand why even a split second of hesitation would have cost Nicola Spirig her Gold Medal.