You should trust your gut to NOT do something but you should use data to affirmatively do something.

Back in the savannah, our gut evolved to keep us from being eaten by lions. The gut feeling is to keep us alive and stop us from making a big mistake … especially when a lot of data suggests that it might be a good thing. Trust your gut if it tells you not to hire someone, not to marry someone, not to do a deal, not to walk down a dark alleyway, not to do business with someone, etc.

Your gut is much less good determining to do something. It might not be a good idea to just go with your gut to hire someone, to marry someone, to do a deal, to walk down a dark alleyway, or to do business with someone. In those cases, you might want to include data and do a thorough analysis … especially if it is something that is hard to undo or going against a core rule that you generally follow.

For instance, let’s say you have an internal rule that you will not invest in companies that have really nice corporate headquarters but your gut tell that is is a good investment. It might be a great investment … but since you’d be going against one of your pattern-match rules, I would suggest you gather a lot more data than trusting your gut.

But in the case where you have a rule that you normally invest in all companies that have 50% market share and are growing at over 50% per year … but in this case your gut tells you there is just something not right about the CEO … then TRUST YOUR GUT. You will have a hard time determining what your spidey sense is trying to tell you with analysis. Best to just walk away.