The correlation between experience, instinct, regret and learning

This post is a tad serious but it has been something I have been thinking about for quite a while now. Bear with me, read the post and who knows, you'd be able to relate. Read on...

I'm sure we've all experienced this before. We're in a situation where we're pretty sure what needs to be done but we were either hesitant, unconvinced or just not confident enough to execute any sort of action. Eventually, we come to realise what we thought we should have done but didn't was the right thing to do after all (with hindsight, of course). This inaction or failure to act leads to a feeling of regret.

Yes, we've come across many such situations in our lives. Walking down a badly-lit street, knowing very well that we shouldn't but it's the shortest way home after a long day's work but end up counting our lucky stars that we're still alive after getting mugged. Or making an impulse buy because the deal was "too good" to turn down only to later question ourselves on our decision-making. Or buying a stock after a recent run-up because we do not want to "miss the boat" only to see a sell-off soon after. Worse still, failing to cut losses because we think the stock will "recover" but instead continues to fall. On the flip side, hesitating to buy a good stock when all factors to be considers points to a "BUY" and regretting when the stock price rises sharply during the next trading session. In every situation that I've mentioned above, I'm sure there was a voice inside us telling us to take the longer route, to walk away because we don't need to buy it, to wait for some profit-taking before considering to invest, to sell because the stock price has already fallen by 15%...to trust our judgement and analysis and buy the stock. These voices are our instincts or intuition and are formed from our learning of these experiences, either directly or indirectly.

Think about it. From a very young age we were probably told not to walk down dark alleys by our parents or we've watched enough movies to know what can happen when one decides to "take a short cut" (indirect experience). Yet, all it takes, for instance, is a lack of judgment from being tired to even consider taking a short cut to head home. It is precisely this short moment when we decide our next course of action that our instincts and intuition kick in, trying to tell us, drawing from our learned (direct and indirect) experiences, that walking down the alley is a bad idea. If we then decide to ignore our instincts, walk down the alley and end up getting mugged, we will regret our action but more importantly we will never walk down a dark alley again. This is what we all know as learning from mistakes. However, we all know some mistakes are just too costly to make.

Now, apply the above scenario in the context of other everyday experiences such as the ones mentioned earlier. If we decide to ignore our instincts and make that impulse buy, we will soon regret the purchase and learn to not make the same mistake again. Suppose we dwell on making an investment decision when all factors point to a good investment and eventually lose out on that opportunity, we will also regret our inaction and learn to be more decisive in the future (direct/acquired experience). 

Personally, I think it is evident that experience and instinct/intuition go hand in hand. The dark alley scenario and the stock investment are examples of instincts from an indirect experience and direct/acquired experience respectively. One scenario creates a regret due to an action while the other a regret due to inaction. What I think is most important here is to have the ability to instantly rationalise and trust our instincts because our instincts usually work in our favour. In essence, it is pivotal to heed our instincts as it may help us mitigate the negatives and leverage on the positives - our instincts will tell us when to act and when not to do anything at all.

...and I guess it also boils down to 'living with no regrets'. How many times have we heard this right? It's so cliched, but there's a lot of truth in that statement. For risks that are not worth taking (eg. dark alley), trust our instincts and take another route. For those calculated risks that could work in our favour, trust our instincts and act. At least we will know if it turns out to be a mistake and live to learn from it, and not live to regret not trying. And if it turns out well...we'll be glad.