The decision making process and the I Ching
Throughout his life, a man must face all kinds of decisions, some of which can be crucial for his future. We have no choice but to choose. It is inevitable and even failing to decide is in itself a decision. The why, when, where or how much, are other decisions we can postpone or even make on an ongoing basis. But before taking any other step, before deciding how many steps we will take, we must decide if we will take it or not.
The final result of any decision always ends with a yes or not, with a positive or negative answer, with an affirmation or a negation. The I CHING is always ready to answer any question with a yes or a no. This works very similar to a cosmic computer with a large database, which includes all the knowledge of the universe. It is even willing to give advice over the how and when best to execute the decision, if it would be best to wait, or if we should look for other alternatives. The decision not to listen to the I CHING, or rather not to listen to ourselves and find the answer in our hearts through faith and intuition, is only ours.
To arrive at the proper decision requires the use of our intellect and our hearts (think feel). Both are necessary to reach a decision, but the heart will always be superior. Both can be exercised (think feel), but the heart is more difficult to exercise because it requires faith. The I CHING is based on humility and humility and faith are closely related.
When everyone including the best analysts and even the Defense Minister of France, said that it was impossible to get Saddam Hussein out of Kuwait, the I CHING was referring to Hussein as THE WANDERER (Hexagram 56) or him who is a guest and should behave as one, that is he must be very diplomatic with his hosts if he wants to win them over. Nevertheless; the I CHING announced Saddam’s inability to behave in a civilized way when in the third line of the same Hexagram it gives us a stern warning:
The I CHING said: “The wanderer’s inn burns down. He loses the steadfastness of his young servant. Danger. A truculent stranger does not know how to behave properly. He meddles in affairs that do not concern him; thus he loses his resting place. He treats his servant with aloofness and arrogance; thus he loses the man’s loyalty. When a stranger in a strange land has no one left on whom he can rely, the situation becomes very dangerous”.
How did the I CHING know that Hussein was going to burn Kuwait and that in turn the allies were going to destroy his “grand” army?
When the I CHING described Bush Sr., the Hexagram was The Joyous, Hexagram 58,
The I CHING said: “True Joy, therefore rests on firmness and strength within, manifesting itself outwardly as yielding and gently”. The Superior man joins his friends for discussion and practice.”
When the I CHING talked about Bush as an honest prince, who will come out triumphantly with the help of his friends Thatcher and the other world leaders, it is also warning him that in just a few months he will be attacked by his internal enemies who would stop him from reaping the rewards of his victory. How did the I CHING know about this possible scenario, after the impressive reception Congress gave President Bush Sr. after the victory of Dessert Storm?
Any investor could have made a fortune in the futures market with this information and the necessary faith on the warnings of the Hexagram about the destruction of Kuwait and Iraq. However, intellect alone, would not have allowed him to enter the futures market.
Is there anyone who by using his intellect alone could have foreseen the fall of the Soviet Union and the Berlin Wall, the rise of the Japanese Empire and the crash of its stock market, and the stumbling of the US economy and its eventual recovery? And on the micro level, how many foresaw the humiliation of the US automobile industry, the crush of the real state industry and its eventual recovery, the debacle of the Savings and Loans, and the hard times of the computer industry? And on the corporate level, who by using his intellect alone could have foreseen the bankruptcy of Pan Am and Penn Station Railroad, the difficulties of Macy’s, the rapid deterioration of IBM and its eventual recovery, and the required restructuring of two real state names such Olympic and York and Donald Trump years ahead of the actual events?.
Is there anybody who seriously believes that a fundamental analysis includes all the elements of the corporation, down to the minimum details? We may know about management abilities but what about the corporation which almost went bankrupt because its top management died in an airplane crash or what about disruptive technologies or sudden drops in margins, quality or so many elements almost impossible to predict by the analysts.
The rejection of fundamental analysis gives raise to the Random Walk Theory. Yet the I CHING would seem to be a complement of both the Random and Fundamental styles: through a combination of a random event such as the throwing of the coins, we can ascertain if the fundamentals are sufficiently strong for the corporation to provide for good results in the future. The I CHING holds that everything is known in the Universe, that nothing is hidden, that the past, present and future are all ONE and that it is possible to know the future by the throw of coins.
What to do then with a BA in economics, an MBA in Finance, ten years of international banking experience in three countries with Citibank, twelve years of experience as a Financial Advisor with Merrill Lynch and 10 years as an Independent Financial Advisor for a commercial as well as a private Swiss Banks and a USA brokerage house? Should I throw all this education and experience away? Should I take decisions strictly based on the judgment of the I CHING? Yes I could because the I CHING is open to everyone regardless of his or her knowledge. Yet the best option would be to combine the heart with the mind (think feel). All the knowledge and experience I have accumulated have been of great value to me in interpreting the judgments of the I CHING.
For instance, years ago I asked about General Motors as an investment and the judgment was negative. The Hexagram was 11, Peace, with six in the sixth line.
The I CHING says: “the wall of the town sinks back into the moat. The hour of doom is at hand.”
This reads in the AGMOLLER Cards “the government orders have long been in disorder. He will have cause for regret”.
If we interpret this as the fact that management has long been in disorder and the CEO (who later retired) will have cause for regret, we would certainly not have invested.
Years later, in a second reading about GM the Hexagram was 63, After Completion, without any moving lines.
The I CHING said: “This is a favorable look. Yet it gives reason for thought. For it is just when perfect equilibrium has been reached that any movement may cause order to revert to disorder.”
It would appear that even though GM had improved its car designs and in many ways had even surpassed the Japanese, we should have been cautious and reduced our exposure in this stock and perhaps in the auto industry.
The judgment in and of itself was bad enough and simple to understand for anyone who did not know anything about the car industry. It was also simple enough to keep away from any exposure to this company and for any investor to look for other alternatives. Nevertheless; this judgment is almost amazing for those who knew about the economic problems of the USA at the time, and of its automotive industry, of the Japanese’s aggressive policy as evidenced by a monetary policy aimed at keeping the Yen weak to give their products a competitive advantage, their large investments in technology and robotics, their work ethic (mystical), of the specific problems faced by GM which had forced it to close down plants and lay off a large number of employees, of their poor management of which Ross Perot spoke so often, and of the inability of the U.S. politicians to force the Japanese to play the game in equal terms.
