Invoking Sixth Sense and its role in Business & Investing

Our Bank's architecture has a Sixth Sense which sort of knows when to grow, when not to grow or when to slow down. You may not see it now, but when the cycle changes, it will be far more visible" - Mr Sashidhar Jagdishan, MD, HDFC Bank said in an interview with Rahul Jain of Goldman Sachs, 19th Feb 2024

Why this subject matters is of our interest in the business world which is bulldozed by analytics, data and AI.?Industry leaders and CEOs of companies like Page Industries, Syngene, Syrma, Suven Pharma, Bata, KNR Construction, Honsa Consumer, L&T, NOCIL, IGL, Astral, DCW, Sharda Crop, MCX, among others, have alluded to sixth sense, gut feelings, hunches, and intuitions during their conversations on conference calls with investment analysts in response to outlook about business, inventory, competition etc.?

The sixth sense is generally defined as a keen intuition or perception that enables one to grasp the true nature of a situation beyond the ordinary five senses. It is often associated with a deep understanding or insight that goes beyond what is immediately apparent. The concept of the sixth sense is not rooted in a specific discipline but rather in a combination of psychology, philosophy, and spirituality. It is a power of perception beyond the five senses; Intuition. It is an inner sense of guidance that can help you navigate your way through life, to better relationships, health, well-being, and success. It is a cumulative power of all your other senses - sight, sound, taste, touch, smell - that culminates in a stronger sense of inner knowing. As animals go, humans have relatively limited senses. We can’t smell as well as dogs, see as many colors as mantis shrimp, or find our way home using the Earth's magnetic poles as sea turtles do.

Do Common sense,?Gut, Sixth Sense, Intuition, hunch differs? Yes, common sense refers to practical judgment based on a simple perception of the situation or facts. It is more about applying general knowledge and reasoning to everyday situations. In contrast, the sixth sense involves a more intuitive or instinctual understanding that may not be easily explained or understood by logic alone. While the terms are often used interchangeably, there are subtle differences. A gut feeling is a visceral reaction or instinctual response to a situation, often based on past experiences or subconscious cues. Intuition, on the other hand, is a deeper, more subconscious form of knowing that is not based on conscious reasoning. The sixth sense is often considered more of a natural ability or inclination rather than a skill that can be learned or mastered. However, like intuition, it can be honed and developed through mindfulness, meditation, and paying attention to one's inner voice and feelings. In the business world, the sixth sense can be invaluable, especially in Investing,?where quick decision-making and understanding of varied market trends are crucial.

Humans have two brains—the familiar cranial brain and a “second brain” in the gut. Scientists recognize the web of neurons lining the gastrointestinal tract as an independent brain, and a new field of medicine—neuro-gastroenterology—has been created to study it. This enteric brain perceives, thinks, learns, decides, acts, and remembers all on its own. The cranial brain sets us apart from the world, the thinking in the belly joins us to it. My recent trip to Japan taught me that Japanese culture rests on a foundation of hara, which means ‘belly’ and represents the seat of understanding. Japanese will say, "He has a well-developed belly." Having been taught to mistrust our bodies, to mistrust our intuition, to mistrust any information that is not analytical, we are now cut off from the feminine core of our intelligence—the belly brain. Instead, we live, think, feel, and experience from a head-based, masculine perspective, which is hugely distorting.?At the turn of the last century, the German philosopher Friedrich Nietzsche suggested that humans needed a 'Sixth Sense' to survive what then seemed like insane madness: the Industrial Revolution. As I said earlier, our culture misunderstands what is information. Today, we are addicted to digital?information, that, like a digital signal, is made up of bits and pieces broken off from the whole and think that it’s real information.We are stripped of stillness, dull our capacity to learn, think, and feel.?But there is also analog?information. Analog information comes to us in a wave, as the?sailors in ancient times used information from ocean waves to navigate their way across the Pacific and find an island up to five hundred miles away.?These deep swells are refraction patterns from islands far beyond the horizon, and they guide the navigators across the trackless ocean. A parallel is found in the business and investing world where distilled experience of having looked at a situation from many quarters helped in stimulating sixth senses.??

The sixth sense remains a fascinating and somewhat elusive concept, blending elements of intuition, instinct, and perception. Warren Buffet, in an interview in 1999, said that investors need to fend for themselves and rely on their knowledge and Intuition when searching for promising businesses to invest in. Naval Ravikant, tech veteran: “It takes time to develop your gut, but once it’s developed, don’t listen to anything else.” All investment managers with experience have benefited during their careers from the use of the sixth sense. Even the U.S. Navy has invested millions of dollars in helping sailors and Marines refine their sixth sense because intuition can supersede intellect in high-stakes situations like the battlefield. I did benefited by my sixth sense, by staying away from merger news of a media giant with another global media company based on my experience of dealing with the media sector as well as from digital company which had a run with regulator, recently.?

In conclusion,?the sixth sense serves as a compass guiding us through the complexities of life, offering insights beyond the realm of logic and reason. As Vallum, navigates the ever-changing landscape of business and investment, it becomes increasingly clear that intuition is not merely a luxury but a necessity for success. In our firms, senior members share their vast repository of experiences with other team members, to hone up instinct of the team. So, the next time you find yourself at a crossroads, trust in the whispers of your sixth sense. For in those fleeting moments of intuition lie the seeds of greatness, waiting to be sown.?

Manish Bhandari, CIIA, is founder of Vallum Capital Advisors, Portfolio Management firm managing equity investment of Family Offices and HNIs. He is a board member of the Association of Portfolio Managers in India and based in Mumbai. He can be reached at [email protected]