TIP715: Thinking in Bets by Annie Duke
We Study Billionaires - The Investor’s Podcast Network
Intro
This chapter explores the intricacies of decision-making in uncertain situations, cautioning against evaluating decisions solely based on their outcomes, known as 'resulting.' Using poker as a lens, it illustrates how to discern luck from quality choices, offering insights applicable to investing and leadership.
In this episode, Clay explores the book Thinking in Bets by Annie Duke, a guide to making better decisions under uncertainty.
Drawing from her career as a professional poker player, Annie shares how to separate decision quality from outcomes and avoid the trap of “resulting.” Clay also discusses how our brains are wired for certainty, why embracing probabilistic thinking leads to better outcomes, and the value of building a truth-seeking support system. Additionally, he uncovers tools like backcasting, premortems, and kill criteria to improve long-term decision-making as investors.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
01:36 - What it means to “think in bets” and how poker can sharpen decision-making.
05:57 - The concept of “resulting” and how it distorts our ability to evaluate decisions.
08:17 - Why good decisions can still lead to bad outcomes—and vice versa.
09:41 - The role of System 1 vs. System 2 thinking in making better choices.
10:44 - How investing parallels poker with incomplete information and uncertainty.
26:29 - How to build a feedback loop that separates luck from skill.
34:03 - The importance of building a truth-seeking group or “buddy system.”
35:02 - The dangers of confirmation bias and how beliefs are often formed by default.
52:54 - How backcasting and premortems can help map out future decisions.
57:16 - The power of setting kill criteria to avoid emotional decision-making.
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here.
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Annie Duke’s book: Thinking in Bets.
- Mentioned book: Big Mistakes.
- Related Episode: TIP623: The Art of Decision Making w/ Annie Duke.
- Related Episode: RWH015: Betting Better in Markets and Life w/ Annie Duke.
- Follow Clay on LinkedIn & X.
- Check out all the books mentioned and discussed in our podcast episodes here.
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