BiggerPockets Real Estate Podcast 297: Mastering the Decision-Making Process with Business (and World Series of Poker) Champion Annie Duke
Sep 20, 2018
Annie Duke, a former professional poker player and acclaimed author on decision-making, shares her insights on navigating uncertainty. She discusses how traditional risk management in poker applies to real estate and investing. Duke emphasizes the pitfalls of 'resulting'—judging decisions solely by outcomes—and the importance of separating luck from skill. With practical advice on fostering confidence through humility, group accountability, and ‘thinking in bets,’ she encourages listeners to embrace uncertainty to make smarter choices in life and investing.
01:47:33
Decisions Always Carry Real-Time Risk
- Every decision, even small executional steps, carries real risk and consequence in the moment.
- Poker forces awareness of path-dependent outcomes, revealing how recent results distort judgment.
Outcome ≠ Decision Quality
- We conflate outcome quality with decision quality when we lack visibility into the decision process.
- This
Social Blame Drives Conservative Choices
- Resulting drives people toward conventional safe choices because social blame for unconventional failures is harsher.
- That conformity stifles innovation and slows adoption of higher-expected-value plays.
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Intro
00:00 • 5min
Annie's path from academia to poker
05:11 • 36sec
Risk management lessons from poker
05:46 • 6min
Resulting: judging decisions by outcomes
12:01 • 4min
Pete Carroll's Super Bowl choice analyzed
15:32 • 5min
Consensus choices vs. innovation
20:30 • 5min
Applying bets logic to middle-class investing
25:18 • 3min
Learning from losses and wins equally
28:29 • 2min
Use groups to catch bias and learn
30:44 • 10min
Confidence versus certainty
40:14 • 15min
Preparing emotionally and practically for risk
55:12 • 17min
Thinking in bets: decisions as bets
01:12:05 • 4min
Ask 'Do you want to bet?' to sharpen beliefs
01:15:47 • 5min
Training kids and habits with low-stakes bets
01:21:04 • 10min
Overcoming confirmation bias and seeking disagreement
01:30:38 • 7min
Recommended reading and business thinking
01:37:25 • 3min
Personal habits, humility, and mastery
01:40:22 • 5min
Final practical tips: pre-mortems and plans
01:44:59 • 2min
Outro
01:46:58 • 4min
#6060
• Mentioned in 7 episodes
The geometry of wealth
Brian Portnoy
#1515
• Mentioned in 25 episodes
Set for life
Scott Trench
#23351
• Mentioned in 2 episodes
Decide to Play Great Poker
Annie Duke
#127
• Mentioned in 141 episodes
Thinking in bets
Making Smarter Decisions When You Don't Have All the Facts
Annie Duke
In this book, Annie Duke teaches readers how to make better decisions by treating them as 'bets' on uncertain outcomes.
She emphasizes the importance of distinguishing between the quality of a decision and its outcome, acknowledging the role of luck, and avoiding biases such as 'resulting' and hindsight bias.
Duke draws on her experiences as a professional poker player and combines these with insights from cognitive psychology and other fields to provide tools for making more objective and thoughtful decisions.
The book encourages readers to get comfortable with uncertainty, seek truth through diverse opinions, and learn from outcomes to improve future decision-making.
#5
• Mentioned in 521 episodes
Thinking, Fast and Slow
Daniel Kahneman
In this book, Daniel Kahneman takes readers on a tour of the mind, explaining how the two systems of thought shape our judgments and decisions.
System 1 is fast, automatic, and emotional, while System 2 is slower, effortful, and logical.
Kahneman discusses the impact of cognitive biases, the difficulties of predicting future happiness, and the effects of overconfidence on corporate strategies.
He offers practical insights into how to guard against mental glitches and how to benefit from slow thinking in both personal and business life.
The book also explores the distinction between the 'experiencing self' and the 'remembering self' and their roles in our perception of happiness.
#83
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Radical Candor
Be a Kick-ass Boss Without Losing Your Humanity
Kim Scott
Radical Candor by Kim Scott offers a practical approach to management by emphasizing the importance of caring personally and challenging directly.
The book argues that effective managers must find a balance between being empathetic and providing clear, honest feedback.
Scott draws from her experiences at Google and Apple to provide actionable lessons on building strong relationships, giving feedback, and creating a collaborative work environment.
The book introduces the concept of 'radical candor' as the sweet spot between obnoxious aggression and ruinous empathy, and provides tools and strategies for managers to implement this approach in their daily work.
#1971
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The Signal and the Noise
Why So Many Predictions Fail – but Some Don't
Nate Silver
In this book, Nate Silver delves into the world of prediction, examining why many predictions fail and how some succeed.
He uses case studies from diverse areas like baseball, elections, climate change, financial crashes, poker, and weather forecasting to illustrate statistical principles.
Silver emphasizes the importance of probabilistic thinking, humility, and acknowledging uncertainty in making predictions.
The book is praised for its accessible explanation of complex statistical concepts and its wide-ranging coverage of predictive methods.
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Extreme ownership
How U.S. Navy SEALs Lead and Win
Leif Babin
Jocko Willink
This book by Jocko Willink and Leif Babin focuses on the principle of 'Extreme Ownership,' where leaders take full responsibility for their actions and decisions.
The authors use their experiences in the U.S.
Navy SEALs to illustrate how this mindset can lead to success in any organization.
The book covers various principles such as believing in the mission, checking ego, and leading by example.
It emphasizes that leaders must own all failures, develop plans to overcome them, and ensure their teams are well-conditioned and aligned with the mission.
The authors also stress the importance of humility, discipline, and effective communication in leadership.
#451
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Superforecasting
The Art and Science of Prediction
Dan Gardner
Philip E. Tetlock
Santiago Foz (argentino)
In this book, Tetlock and Gardner present the results of the Good Judgment Project, a massive forecasting tournament that identified a small group of 'superforecasters' who are exceptionally good at predicting future events.
The authors explain that good forecasting does not require powerful computers or arcane methods but involves gathering evidence from various sources, thinking probabilistically, working in teams, keeping score, and being willing to admit error and change course.
The book uses stories of forecasting successes and failures, as well as interviews with high-level decision makers, to illustrate these principles and demonstrate how anyone can improve their forecasting abilities.
#270
• Mentioned in 85 episodes
The Miracle Morning
The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM)
Hal Elrod
The Miracle Morning by Hal Elrod provides a step-by-step process to transform your life by starting your day with six powerful practices: Silence (meditation), Affirmations, Visualization, Exercise, Reading, and Scribing (journaling).
This updated and expanded edition includes new content such as The Miracle Evening and The Miracle Life, helping readers optimize their bedtime and sleep, and begin their path to inner freedom.
The book has helped millions of people become the person they need to be to create the life they’ve always wanted.
In today’s epic show, we interview World Series of Poker bracelet champion Annie Duke. Annie is a nationally sought-after speaker who combines her mastery of poker with a study of the cognitive sciences in a truly unique and brilliant way.
In this show, you’ll have your mind blown by Annie’s insights regarding following conventional wisdom (even if it doesn’t make sense), focusing too much on the results (and not enough on the right choice), and accepting a level of uncertainty to gain a HUGE advantage over your competition. Annie’s theories on “thinking in bets” are designed to help others navigate a world where we can’t be certain of an outcome, but still come out on top over time.
This is an absolute can’t-miss episode for those looking for strategies to overcome apprehension, fear, or uncertainty. Be sure to listen to this incredibly brilliant and powerful interview—and get the tools to take your next steps today!
In This Episode We Cover:
- Annie’s backstory and how she got into professional poker
- Her concept of risk management
- Thoughts on luck and circumstances we have no control over
- Elements of luck versus elements of skill
- Pete Carroll’s endgame decision
- The concept of “resulting”
- What constitutes a consensus choice
- Winning and losing—and caring about your decision-making process
- The difference between real estate investing and poker
- The importance of confidence and certainty
- Why one shouldn’t be afraid of losing and being blamed
- A champion versus a victim
- And SO much more!
Links from the Show
- BiggerPockets Forums
- Rounders
- BiggerPockets Podcast 074: Buying My First Investment Property- A Newbie Podcast with Jordan, Jacob and Jeromie
- Jordan Thibodeau’s Author Profile
- Scott’s Instagram
- David’s Instagram
- BiggerPockets Podcast 157: A Simple Morning Ritual to Help You Dominate Every Area of Your Life with Hal Elrod
Books Mentioned in this Show
- Thinking in Bets by Annie Duke
- The Miracle Morning by Hal Elrod
- The Geometry of Wealth by Brian Portnoy
- Decide to Play Great Poker by Annie Duke
- Superforecasting by Dan Gardner and Philip E. Tetlock
- Extreme Ownership by Jocko Willink
- Radical Candor by Kim Scott
- Thinking, Fast and Slow by Daniel Kahneman
- The Signal and the Noise by Nate Silver
- Set for Life by Scott Trench
Tweetable Topics:
- “Every decision, even small executional decisions all the way to the larger goals, carries risks.” (Tweet This!)
- “There are no small decisions.” (Tweet This!)
- “The most important person we need to worry about pointing fingers at is ourselves.” (Tweet This!)
Connect with Annie
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