Michael Covel's Trend Following Ep. 1364: The Transformation II with Michael Covel on Trend Following Radio
Nov 10, 2025
Annie Duke, a professional poker player, entrepreneur, and author with a psychology background, dives into the art of decision-making under uncertainty. She emphasizes the importance of probabilistic thinking and how it helps avoid overconfidence. Duke explains 'tilt,' the emotional state that can derail decision-making, in both poker and business. She also discusses the potential dangers of consistent small wins and advocates for focusing on the decision-making process rather than outcomes. Her insights resonate with anyone looking to navigate risk better.
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Think Probabilistically Not Absolutely
- Annie Duke trains thinking probabilistically to avoid treating high-probability events as certain.
- Labeling outcomes 100% prevents exploring alternatives and learning from the 20% that can occur.
Expected Value Is The Winning Edge
- Expected value (EV) separates top decision-makers from the rest.
- Run enough iterations to distinguish true expectancy from random short-term outcomes.
Process Focus Spurs Innovation
- Focusing on outcome suppresses innovation because it punishes failure.
- Process-focused evaluation preserves experimentation and long-term expectancy.
