Gut Instincts

There is some fascinating research that has confirmed for me once and for all that "hunches," "gut instincts," "feelings in your bones" are real and should be paid attention to. Antonio Damasio and his colleagues at the University of Iowa have been studying a group of patients who've had their amygdalae removed because of uncontrollable seizures, tumors, or other pathology. The amygdala is a small structure in the emotional brain that seems to be a central processing point for fear responses, among other things. It's been known for a long time that people who've had their amygdalae removed follow a peculiar course. Though they continue to seem like themselves—their personality, memory, fund of knowledge, reasoning power all seem unchanged—they usually get in trouble in life. It turns out that they are gullible (and so easily influenced by people who take advantage of them) and that they have a hard time organizing their futures.
It's been hard to demonstrate these phenomena in the lab, because the effects are subtle and long-term, but one of Damasio's colleagues came up with a gambling game that shows something about what's going on. The subject is essentially playing a game like blackjack with two separate decks. One deck is rigged so that in the long run the subject wins money; the other deck is rigged against the player. Subjects playing the game are asked at regular intervals if they have any hunches or explanations about what's going on. They're also hooked up to a circuit that measures their Galvanic Skin Response (GSR; it's part of the traditional lie detector). GSR is essentially a measure of moisture on the skin, and it rises when the subject feels stressed. The experimenters found that patients who'd had amygdalectomies never "got" the game; they never caught on that one deck was good and one was bad, and so would go on playing both at random. They also showed no change in GSR as they played. But when normal subjects were tested, after a while people would begin to have hunches, and so they would start playing the good deck more, and they'd win more, and their hunches would be confirmed and would turn into explanations.
As expected, the GSR of normal subjects began to rise as they played from the bad deck; the fascinating finding was that GSR for these people started to rise before they were aware they had a hunch or any slightest idea about how the game worked. Something operating on an entirely unconscious level was telling them they were at risk. This is a prime example of how our emotions can develop and influence our behavior without our awareness.
There is no evidence yet that positive hunches—the little voice that tells you what Lotto number to play—have any validity at all. So if you dream of making a killing in the market on some obscure stock, better stick with what your research and logic tell you. But if you find yourself sweating over a particular investment, maybe you should pay attention and get out while you can.