24 February 2019

On today’s show, Preston and Stig learn from World Poker Champion Annie Duke.  She teaches the audience how to think in bets and avoid cognitive pitfalls.

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  • Why we should make decisions the same way as making bets
  • How to separate the decision and the result and why it’s important
  • Why it makes sense to offer the right person $30,000 to spend 30 days in Des Moines (seriously!)
  • How to seek the truth together as a group


Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Preston Pysh  0:02  

On today’s show, we’re extremely excited to bring you a fascinating discussion. Our guest, Annie Duke, is a master of cognitive psychology and probabilities. In fact, after completing a double major in English and Psychology from Columbia University, she was awarded a National Science Foundation fellowship to study cognitive psychology at UPenn. 

For people familiar with Annie, they already know she’s a world-renowned poker player for two decades and has won countless titles, the World Series of Poker and numerous championships. She is also the best-selling author of “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.” 

She’s been a keynote speaker for executive staff at Marriott, Citibank, and many Fortune 500 companies. On today’s show, we dig into Annie’s methodology for decision making, how she tries to understand the odds of what appears to be improbable situations. 

Without further delay, we bring you this insightful discussion with the one and only Annie Duke.

Intro  1:04  

You are listening to The Investor’s Podcast, where we study the financial markets and read the books that influenced self-made billionaires the most. We keep you informed and prepared for the unexpected.

Stig Brodersen  1:24  

Alright guys, we are here today with Annie Duke to talk about her new book, “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.” 

I have to say, as I told Annie just before the interview, I am a little starstruck here. Thank you so much for coming on the show, Annie.

Annie Duke  1:38  

Well, thank you for having me. I’m excited to talk about some ideas.

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Stig Brodersen  1:41  

Me too. Before we talk about how our listeners can optimize their decision making, I have to ask you about one of the most life-changing decisions that you made. If we set the scene: you’re 26 you have a degree in English and Psychology, just got married, and you relocated to Montana. 

I think for anyone, they would not say that the next logical step would be to have a long successful career as a professional poker player in Las Vegas. Though it wasn’t as random as it sounds. Please tell us your story.

Annie Duke  2:11  

First of all, thank you so much for the opportunity to do that because that’s not actually where most people start. Very often in the moment, when there are things that randomly intervene in your life… In the moment, we’re very often bad judges of whether that’s good luck or bad luck. It takes a lot of time for you to sort of be able to look back and see what kind of influence that had with clear eyes. 

Here’s basically what happened. I finished college. I went to UPenn for graduate school to get my PhD in cognitive science. At the end of that, I was going off to interview for my first job as a professor. My idea was I’m going to go do these job talks and become a professor. 

During the last year of my program, I had been struggling with some stomach problems. I was on my way to NYU for my first talk and I didn’t ever make it to the talk. I actually ended up in the hospital for two weeks. I was just really sick. It became clear that job talks weren’t going to happen that season. 

In academics, you have to wait a year, because the job market is seasonal. At the time, I had just gotten married. My husband at the time had a place in Montana. That’s where his dad lived. I said, “Alright, we’ll just go stay in Montana until I get better, and then I’ll come back and finish everything up.” 

This feels like very bad luck. I was then in Montana and I thought, “Okay, I’m not on my program. I don’t have my fellowship now. I need money and I’m sick.”

Going and getting what would be a regular job probably is not going to work for me because I don’t know what days I’m going to feel okay and what days I’m not going to feel okay. 

My brother, Howard Lederer, who at the time was already playing poker said to me, “I think there are legal games in Montana. Why don’t you try playing poker to sort of fill in the financial gap?” 

I said, “Okay, fine.” 

I went to Billings, Montana, which is 35 miles or so from where I’m living at the time and I started playing. That’s what I was going to do in the meantime. Then, “the meantime” turned into 18 years playing poker. That’s just sort of how I ended up there. There’s this big intervention of luck. 

At the time, I felt very bad luck that sent me on this path, that I think in retrospect turns out to be quite good luck, if I can now look at it with time having passed. 

Stig Brodersen  4:30  

I don’t think I do your book justice when I say this, but for me, the most profound concept in your book is really the concept of “resulting.” Could you talk to the listeners about what is that and why is that so important whenever you’re evaluating whether or not you made the right decision?

Annie Duke  4:46  

Tell me like in your gut what this feels like. Somebody sets you up on a blind date. It’s the worst date that you’ve ever had. Does it feel like that was a good decision?

Stig Brodersen  4:57  

No, that would feel like a horrible decision to spend with that blind date.

Annie Duke  5:01  

Okay, somebody sets you up on a blind date and it goes great. The person is the love of your life and you live happily ever after. Does it feel like a good decision to go out on the date?

Stig Brodersen  5:11  

Yes, this definitely feels like a great decision.

Annie Duke  5:14  

Isn’t that interesting? In either case, I’ve told you the exact same information about the decision. All I told you that you decided to go out on a blind date, someone set you up and you decided to go. 

The information about the actual quality of the decision is the same. The only thing I switched was the quality of the outcome. You notice how intuitive it is that you’re feeling about whether the decision was good or not changes depending on the outcome, even though I haven’t told you much about the decision. 

This is what we call “resulting.” 

Most of the decisions that we make, it’s unclear to us particularly in retrospect, whether the decision was good or bad. It’s just very opaque. We can’t really see into mathematics. We don’t really know what all the possible outcomes were. We don’t know what the probabilities of those outcomes were. We don’t really know what the payoffs are. 

These things are all kind of hard for us to see. When we can’t see that, what we do is we use the shortcut. I can see whether it turned out well. The date was great. The date was bad. This is now going to tell me whether the decision quality was good. 

Now, this is such a strong bias that I can actually tell you something about the quality of the decision. I can show you again how this feels. 

Now, I’m going to tell you a little bit more about the decision quality. A random acquaintance who you hardly know set you up on a blind date. You go on the date, and it turns out horribly. Was it a good decision?

Stig Brodersen  6:31  

Again, I want to say no. I feel this is a trick question.

Annie Duke  6:34  

No, it’s not a trick question. Literally, the great thing about all this stuff is none of them are trick questions. It’s all just about revealing your own human nature. There’s no trick to it, because the more that you can reveal about that stuff, the better off you are. 

It’s not about trying to think about what’s the right answer. It’s actually really important just to think about what it feels like to you? It feels like a bad decision and now, I’ve told you a little bit more. Now, if I asked: Why do you think that’s a bad decision? What would you say?

Stig Brodersen  7:01  

It’s only an acquaintance. She doesn’t know me that well. She probably doesn’t know my type.

Annie Duke  7:04  

Right. This is interesting because now the things that I’ve told you about the decision seem to align pretty well with this outcome that I’ve given you. So now, you don’t really have any trouble with it, but watch what happens now. 

A random acquaintance, who you hardly know, if they’re a totally random acquaintance. They’re like, “Have I got somebody for you!” They set you up on a blind date and you decide to go on it. Then, it goes great. The person is the love of your life and you live happily ever after. 

Stig Brodersen  7:32  

Fantastic. Yeah.

Annie Duke  7:33  

What’s really interesting here is that in the first case, you went to it as a random acquaintance. You could sort of see here are the holes in my decision making process and because it aligned with this bad outcome that you had, it allowed you to sort of think that you were making a rational sort of analysis about the decision quality.

However, as soon as I make the person end up being the love of your life, all that washes away. Even though the circumstances are the same, it’s a random acquaintance. They hardly know you. Somehow now you think, “Well, what people will say is you got to take a chance.”

Here’s the interesting thing is that this isn’t for nothing, because it actually changes our behavior going forward. When we take the quality of the outcome and either use that to figure out if the decision was good, or even override information that might signal that the decision wasn’t so good, because in the second case, you’re overriding. 

It was a random acquaintance who doesn’t know you. This is called “resulting.” I take the quality of the results, figure out if the decision was good. 

Now, think about how this causes us to learn the wrong lesson. Are you going to go around recommending people that they find people who hardly know them to set them up on dates? 

Preston Pysh  8:39  

Annie, this idea is a huge part of your book. Talk to us why it’s so important for people to think about probabilities. More importantly, how can they apply that way of thinking in their daily lives?

Annie Duke  8:53  

Here’s how we can think about what’s happening with “resulting.” We’re acting as if the relationship between decisions and outcomes is much more perfectly correlated than it actually is. 

It’s only the case that when decisions or outcomes are really perfectly correlated, that you could possibly work backwards from the outcome quality to the decision quality. 

The problem is, of course, that we don’t want to learn the wrong lesson. Given that it’s the case that you can have a perfectly good outcome from a bad decision, we wouldn’t want you then to go back and repeat that bad decision again, just because you’re doing this resulting thing, and vice versa. You can have a bad outcome from a good decision. We don’t want to not do that. 

With “resulting,” what’s happening is we’re acting as if there isn’t so much uncertainty in the relationship between decisions and outcomes. 

Let me give you a place where that does make sense. If we think about the game of chess, there’s not a lot of uncertainty. We can think of uncertainty in two forms. 

One, uncertainty in the information, that there’s hidden information from us. In chess, I can see the whole position. If I can see all of your pieces, I can know what all your possible moves are. There’s nothing hidden there. 

The other form of uncertainty would be lack, the intervention of luck. Anything that you can’t control in chess. The pieces only move by an act of skill. Nobody rolls the dice. Then all of a sudden, the bishop appears or disappears from the board. 

What that means is that in a game like chess, if all that you know, like the only thing you know, is that I played a game of chess with somebody and I lost. All I’m telling you is the outcome. What can you say about my decision quality compared to my opponent, if all you know is I lost?

Preston Pysh  10:31  

Well, maybe he or she’s a better decision maker.

Annie Duke  10:36  

Right. In that game and that’s fine. In that particular case, it’s totally fine to do that. Why? Because chess doesn’t have this uncertainty. 

Now let’s take something where we do have a lot of uncertainty. Let’s take poker. 

Now in poker, we’ve got two forms of uncertainty, right? We’ve got the cards that are hidden from view, so I can’t see the person’s card. Also, there’s the intervention of luck. 

What that means is that now I can have the best hand. I can play it really well and I can still lose going into the last card. I could be 98% to win the hand, 2% of the time I lose. Sometimes I’m just going to lose.

Likewise, and actually, I think even more problematic is that I can have the worst hand. I can play it pretty poorly. Similar to how I can decide it’s a really good idea to go out on a blind date that’s set up by someone who literally doesn’t even know anything about me. So, I can have the worst hand. I can play pretty poorly, and then it can turn out great. I could be 98% to lose the hand and because of the turn of the last card, 2% of the time, I’m going to win. 

What does that mean? That if all you know is that I played a little bit of poker. Let’s say a half hour of poker with somebody and that I came out the loser. Now what can you say about my decision quality in comparison to there. 

Once you start to put uncertainty into the mix, it takes a lot more iteration there to actually see the skill start to emerge. You can kind of think about it like if I flip a coin once and it lands tails, that doesn’t mean that I should think that tails is going to land every single time, right? It takes a lot of coin flips, in order for me to sort of figure out what’s going on with that coin. 

That’s the same in poker. We would have to play a lot of hours together before you could actually say who was the better decision maker. A half hour doesn’t do it because there’s too loose a connection between decision quality and outcome quality. 

Okay, so what we can sort of think about is that what’s happening when we’re doing “resulting,” is that we’re acting like we’re playing chess. If I know what the outcome is, I can work backwards on a single trial. 

We’re not working with big data sets here. For most things, you’ve got one try at it. When the fact is that we’re not really playing chess, we’re actually playing poker because if we were playing chess, then every time you ran a red light, you would at least get a ticket. Then every time you went through a green light, you would emerge unscathed. 

We know that that’s not true. Sometimes I go through green lights and get in an accident. Sometimes I go through red lights and nothing bad happens to me. We know that you can’t do this, right? 

Once we sort of have that frame, and we realize, okay, we’re sort of acting like we’re playing chess, but we are really playing poker, you can start to see where this frame of thinking about your decisions that is bad, actually is really helpful. 

Really, what a bet is is this: I have options that I’m weighing and I have limited resources to invest. So I can’t invest in all the options available to me. 

Let’s simplify it and say I’ve got a binary choice: Option A and B. I have resources to invest. Sometimes it’s just my time and whichever option I choose is not going to result in a guaranteed future. When I choose an option, there’s going to be a set of possible futures that could occur. Each of those futures is going to have some probability of happening. 

That’s exactly what a bet is, right? I invest in an option that then results in some sort of probabilistic distribution of outcome. What I’m trying to do is get a positive return on my investment.

Stig Brodersen  14:02  

I think this story is the perfect segue into my next question here, because your book is so just packed with great stories. 

Perhaps my favorite story is about the 30 days in Des Moines. I do want to apologize to all our listeners out there. It might not come across as well. But for me, that was such a hilarious story. It’s become sort of a poker folklore also, but could you please tell us that story? Perhaps also the more surprising learning outcome of why this story applies to all of us. 

Annie Duke  14:32  

My good friend John Hennigan in the 90s, an amazing poker player, but also a stereotype of what you would think of as a 20 something guy playing poker for a living. The term that we would have used is “action junkie.”

An action junkie is someone who just really likes to be in it. He likes to be in the action. So he’s playing all night. For example, the game is starting at 9 or 10. He’s playing through the night. He never sees the sun. When he’s done playing, it’s like going out to the club. 

This is a guy who likes his nightlife, really likes poker and loves a gamble. One day, he’s sitting at the poker table and a discussion breaks out. There’s a lot of downtime in poker. You end up with very strange discussions happening.

On this particular day, the discussion was about state capital. They were talking about, “Do you know the state capital of this?” They get to Iowa. The state capitol of Iowa is Des Moines. 

For some reason, Hennigan just announces, “Oh, I could totally live in Des Moines.” Alright, so now he stated a belief, “I could live in Des Moines.” 

Now everybody looks at him and says, “Yeah right.” I mean, this is the absolute epitome of a Vegas guy. They’re like, “Yeah, right. You could live in Des Moines.” 

Well, so now what we have is conflicting beliefs. People at the table believe that he can’t live in Des Moines. John Hennigan believes he could. As often happens in an environment where bets take place when there are conflicting beliefs, the adjudicator is a bet. You have this kind of accountability mechanism that now intervenes for your beliefs where you sort of figure out, “Alright, let’s figure out how deeply we really believe this thing.”

So they start to negotiate a bet. The bet that they come to is that John Hennigan has to move to Des Moines for 30 days, because John is capable of finding the most happening place anywhere. They can find him. They say, “You can stay in this one hotel on this one street in Des Moines and you’re not allowed to stray from the street except during the day, you’re allowed to go outside of town to go practice golf.”

Now, for John, this was one of the secret reasons that he wanted to actually go to Des Moines for 30 days. He wanted a little detox from Vegas. He was imagining that it might be good for him to take a break, but he also wanted to practice. So he said, “Okay, I’m going. I’ll get 30 days of  really good golf practice. I’ll also get to detox. It’ll be good for me. I’ll get a break.” 

This is what he’s thinking and the people on the other side of the group said, “There’s no way you’ll survive in Des Moines for like one second.”

So they settle on a price because you always sort of put a price on your beliefs in these situations. The bet that they placed is $30,000. So if John can last for 30 days in Des Moines, he’ll win $30,000. If the group wins, meaning John comes home before 30 days, then they’ll split $30,000 among themselves.

John moved to Des Moines the next day. Within two days, he called the group. He called a representative of the group. He said something like this, “Hey, well, you know, obviously, I’m committed. So I’ll tell you what, I’m going to let you settle the bet.” 

So in the same way that we settled lawsuits, we can also settle that for less negotiation among the party. This is what he offered the group after two days in Des Moines, “If you guys give me $15,000, I’ll save you the trouble and I’ll come home.”

The group was like, “What are you talking about? You called after two days. Why don’t you stay for a while? We’ll just see how this plays out. Within a week, John had come back to Las Vegas and he was paying the group $15,000 for the opportunity.”

Stig Brodersen  18:14  

Wow, what a fantastic story.

Annie Duke  18:16  

The thing about the story is it’s a really funny story. It’s not really just for the entertainment value, but it actually shows you something really important about what happens when you think in bets. 

What happens is that you get held accountable to the things that you believe. This is actually really, really important, because we can kind of think about beliefs in two ways, right? 

We could think about beliefs as predictions. For example, I believe that I could stay in Des Moines for 30 days. That would be a prediction. We know that the nature of those predictions are probabilistic. Generally, what we do is we think about those things as “yes or no,” either this will happen or it won’t. 

Usually, it’s almost always somewhere in the middle that it’s not that you’ll stay in Des Moines or you won’t. It’s that some percentage of the time you stay in Des Moines. Some percentage of the time you’re likely to come home. 

Even with that, you can also think about it even as more of a continuum, which is like how many days do you stay? How happy are you going to be there? You can imagine that none of these things are really black and white. There’s a lot of uncertainty when we’re thinking about beliefs that we have about the future. That would be a prediction. 

What’s interesting about this mechanism of betting is that when you state something, particularly when you state something with too much confidence, what thinking about it as a bet does is it reminds you that you’re going to be held accountable to that. Particularly, you’re going to be held accountable to actually paying attention to how sure or unsure you are of that belief. 

What betting does is it asks you how sure am I sounds like not so much of a distinction, but it’s actually quite a significant distinction. Because when you say, “Am I sure?” you’re asking a yes or no question, which has to be black and white. You’re eliciting either 100% or zero percent, which is not the way the world works.

It’s certainly not true of our models of the world. It’s definitely not true of anything we’re predicting about the future. However, when I switch that language from “are you sure?” to “how sure are you?”, it’s no longer a yes or no question. 

Now, I’m asking you for something that sits along a continuum and to examine what your own level of uncertainty is, which is a really good thing, because that gets you to a more accurate representation of the world.

Preston Pysh  20:27  

Holy moly, it’s crazy to hear such funny stories be turned into something so mathematical and intellectual. 

Annie, here on the show, we often talk about people who are the best in the world at certain things. It’s not every day that we actually get to have the conversation with the people who we’re talking about. But you’re here with us today and you were the absolute best poker player in the world at a certain point in time. 

Like any other person that achieves that status, what is it that you would say allowed you to achieve such unprecedented success in this field? In short, how do you become the best in the world at whatever it is that you’re trying to do?

Annie Duke  21:09  

Well, so first of all, I think we have to remember that there’s a lot of luck. Right place, right time. 

For example, if I were to start playing poker today, I don’t know that I would have been particularly good at it. The game has really, really changed. It’s much more reliant on online play and playing 20 screens at once. 

They’re running analytics over the game and all this stuff. Maybe I would have been good. I don’t know, but I definitely… The way that the game was when I started playing suited me very well. I really want to recognize there’s a lot of luck in that. 

Like I say, I may not have even ended up playing had I not actually gotten sick, right? I would have ended up being a professor or if I had been born at a different time and it was 1960. I don’t know how a woman would have ended up playing poker. That would have been very strange. 

My genes are my genes and my background is my background and so whatever talent I was born with for the game, I also have to put into the luck category. 

Let me just start there. There was just a whole bunch of luck involved in my getting to the place that I got to. 

The other thing that I would say is that I had the help of some tremendous people. That’s not just to say sort of in the generic way that I had the help a tremendous number of people, but in the way that everybody should be thinking about how do you make better decisions and to consider how the people around you, how your mentors are actually working these decisions with you, and how are they interacting with you as a group have a tremendous influence on what the quality of your decisions are going to be.

I want to think about group sort of in two ways. There are two kinds of styles that groups can interact with. Style number one is a confirmatory style. This is most of what we see… By the way, most of what we see in enterprises, most of what we see in politics, most of what we see in friend groups is confirmatory styling. What we do is we affirm the beliefs of the group. 

Let’s say, for example, that I’m in a group where people really, really, really believe in open immigration. In most groups, if I were just to say, “Let’s think about maybe whether limiting immigration in some way might not be so bad.” 

I’m not saying these are my opinions. I’m just saying like what if I challenged this in the group. Most groups, I would get ostracized. I’d be sort of put into line. 

The other way that a group can be is an exploratory style. What that means is that they’re actually not trying to affirm the beliefs of the group. It’s actually to try as a group to come up with what the best answer is: how do we, as a group, sort of figure out what the most accurate model of the world is? 

Now, we can see in that particular group if I made that challenge. If I said, “I know that we all believe in open borders, but let’s consider the outside view. What would happen if you had zero immigration? What would [happen] if you had these quotas on it? What if you had these different restrictions? What if you did have open borders”? 

And you’re actually exploring all of it, and you’re willing to listen to what the challenges are. In particular, listening to somebody who is dissenting with your beliefs in a way that helps you to actually more accurately model the world. 

There are really wonderful things that come out of that, which is really good as a decision maker, even in the case where it turns out that the thing that you believe is actually pretty dead on. It’s still really useful to hear somebody who believes something strongly on the other side.

Whenever we actually have sort of what would be considered an opponent, even if it turns out that you think that your strategy is really good, it’s very important to be open-minded to their strategy, because it allows you to figure out what are the things that you can do in order to leverage their strategy to your advantage. 

If I’m really open-minded to really try to figure out what’s the best view that I could have of your thinking, it exposes more of your thinking to me so that I understand much better what you’re doing, which is good. It actually allows me to understand in a much better way what my own strategy and what my own thinking is. 

One thing that a really good group does that this group of mentors did for me was they instilled in me this exploratory style. That in order for me to interact with this group, that I had to be open to the fact that I was wrong. I had to think about how I could have done it differently. 

When I said that a player was bad, they challenged me and said, “Why? You have to say why they’re bad, because maybe they’re not. Maybe you just don’t understand what they’re doing.” 

This was forced on me by my mentors, which was really lucky, because I heard a lot of other groups who did this. That player is really bad and the person would say, “Yeah, they suck. Let me tell you about the player that I played against who was really bad.”

Now notice, there’s not a whole lot of learning going on there. It’s just sort of confirming “we are great, they’re bad.” That’s sort of the world where my group wasn’t allowing me to do that. 

It creates this really wonderful accountability mechanism that actually improves your decision making when you’re away from the group because now whenever I’m looking at a situation, I’m processing it in the moment knowing that my group is going to challenge me later. 

Now it actually makes the way that I look at the situation, the way that I process the information as it comes in, it disciplines it so that I’m much less likely to fall on my own into this sort of confirmation bias problem, into this motivated reasoning problem, and into this sort of feeling overconfident my own strategy. 

In the end, you can sort of think like, “Isn’t that kind of what this idea of betting does to you?”

Stig Brodersen  26:41  

Annie, it’s very interesting how you talk and think about decisions and also think that reading through your book, you contribute a lot of your success to this decision group, if we can call it that. 

I think that seeking for truth, there is this social contract you have in place with many people. If you just went out right and spoke to people, most will probably be in what you would refer to as a confirmation group. They might be offended or just very confused of why you would ask that question.

My question to you is, how do you find like-minded people who are willing to grow with you and who you can form this group with and where you can seek the truth together?

Annie Duke  27:18  

The thing that’s really great about that question is that we need to understand that you can’t go around in your life just challenging people to bet. You’re not going to have any friends if you’re just going around to people saying, “Do you want a bet?” All the time, they will say, “What a jerk.” That’s number one. 

Number two is that not everybody is looking for this kind of interaction, because this kind of interaction is actually challenging. When I listen to somebody who disagrees with me, there are three things that can happen after I finish listening to them. 

One is that I could continue to believe or perhaps even increase my belief in the thing that that was my side of the argument. You could change my belief a little bit in your direction or I could have a full-on reversal. In any of those cases. I’m better off for having had that interaction because I understand more what I mean. 

When you have a full-on reversal, that’s amazing because that’s going to stop you from making that same mistake again, going forward. 

Most of what’s happening, it’s not a full on reversal, or a sticking to your guns. Mostly what’s happening is that you’re calibrating. You’re saying, “Yeah, a lot of what I believe is true, but now I can really see the other side and I can see that some of what they’re saying actually has merit. I’m now going to incorporate that into my belief.”

The problem with all of that, is that in order to actually do that, you have to open yourself up to the possibility of a full-on reversal. You have to open yourself up to say, “Well, I wasn’t really 100% right about this, that there’s some wrong in there.” 

The issue for most of us is that our beliefs are really part of our identity so when somebody is expressing a belief that opposes ours, we feel like it’s a challenge to our identity. When we have to change a belief, it feels like being told that we were wrong. At the moment that feels really bad. 

Once we understand that, the first thing is we don’t want to really force that on people. If I’m just randomly having conversations with people and I’m going around saying to people, “Do you want to bet?” I might as well be telling people, “Well, you’re wrong, I think you’re wrong.” That’s how they’re going to hear it and that’s actually not going to do any good. 

Let’s sort of divide the world into people who are seeking this kind of interaction, this exploratory style and people who don’t know that they want to be seeking that. So, let’s just divide the world into those two groups. 

Alright, so how do you form your own group? Well, if I were to say to you, “Hey, if you were to think about your friend, can you think about some of those friends who just sort of naturally seem interested in asking why they’re wrong? Or they’ll say to you things like, ‘Where am I going wrong here? What do I not have right?’ When you disagree with them, they don’t get upset. They’re willing to hear you.” 

Stig Brodersen  29:53  

Yes, there are definitely people who do not enjoy that, but will definitely feel better about that than other friends.

Annie Duke  30:01  

Right. So those are the people who you form your decision group with. You find the people who are heading in that direction already and you say, “Hey, let’s get together and let’s actually form a decision group or a decision pod.”

What the goal of this is going to be threefold: we’re going to commit to try and to form the most accurate model of the world, as opposed to affirm the things that we already believe. So let’s agree to that. Let’s call that accuracy versus rightness. We’re going to reason about the world in order to try to be accurate rather than right.We’re going to agree to that: accuracy is our king here. 

The second thing we’re going to agree to is that we’re going to hold each other accountable to the things that we believe so that when you say something that I think is off base, I’m not just going to let it go like we mostly do. 

In our group, when you hear me say something that you say that I’m off base on, I am going to consider that you have harmed me, if you do not point it out to me. So, this flips the normal interaction on its head. 

When I’m at a coffee cocktail party and I express an opinion and someone challenges me, most people feel like that’s harmful. You’re going to hold me accountable to the things that I believe in that way, because you’re going to point out when you think that I’m going to stray.

Stig Brodersen  31:10  

Your book is absolutely amazing. I’ll definitely encourage everyone out there who listens to this to pick it up. Annie, where can they find the book and where can they learn more about you?

Annie Duke  31:20  

There are a few places you can find the book at wherever your favorite place to buy books is, whether it’s Amazon or an independent bookseller, the book is widely available. You can get it on audio, obviously. You can get the physical book and you can get a Kindle. Really hoping that people will look at that.

The other way that people can interact with me, which I would love if your listeners did is on Fridays, I send out a newsletter, where I’m really writing about how you apply these ideas to stuff that you’re sort of seeing out in the world. People can go to AnnieDuke.com to find the newsletter there. I love that process and I love the readers of my newsletter. I particularly love how it actually creates a lot of interaction with them.

Stig Brodersen  32:02  

Well, fantastic resource, Annie. On behalf of The Investor’s Podcast, thank you so much for taking the time to speak with us here today.

Annie Duke  32:09  

Well, thank you so much for having me. This is great.

Stig Brodersen  32:11  

All right, guys. That was all that Preston and I have for this week’s episode of The Investor’s Podcast. We will see each other again next week.

Outro 32:19  

Thanks for listening to TIP. To access the show notes, courses or forums, go to theinvestorspodcast.com. To get your questions played on the show, go to asktheinvestors.com and win a free subscription to any of our courses on TIP Academy. 

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