Episode Description:
A good outcome does not necessarily mean you made a good decision.
And a bad outcome does not necessarily mean you made a bad one.
That distinction is at the heart of James’s conversation with Annie Duke, former professional poker player and author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.
Poker gave Annie an unusually intense laboratory for studying uncertainty. You can make exactly the right decision and lose money. You can make a terrible decision and win. If you judge yourself only by the result, you may reinforce bad habits, discard good strategies, and learn the wrong lesson entirely.
James connects this immediately to business, investing, comedy, relationships, and his own experience selling a company during the dot-com boom. When things work out, people naturally want to take credit. When things go badly, they naturally want to blame luck.
Both reactions interfere with learning.
Annie argues that one of the most valuable skills is learning to separate what you controlled from what you did not. Instead of asking only, “Did I win?” ask whether the process that produced the result was sound.
The conversation then becomes an exploration of how to learn faster.
Annie says one of the best shortcuts is to “borrow other people’s 10,000 hours.” When she entered professional poker, her brother had already spent years around players like Erik Seidel and Dan Harrington. Instead of rediscovering everything through expensive trial and error, Annie entered a community that had already spent thousands of hours thinking about the game.
But being around experts is not enough.
You have to know how to talk to them. You have to communicate the relevant details. You have to remove the outcome when asking for advice so it does not bias the conversation. And you have to find people willing to challenge you instead of simply confirming what you already believe.
Annie describes three essential commitments for a strong decision-making group: a commitment to accuracy, accountability for your beliefs, and openness to dissent.
James and Annie also explore the role of teaching. Annie says her own poker game changed dramatically once she had to explain her strategies to students. If you cannot clearly explain why you believe something, you may not understand it nearly as well as you think.
The second half of the episode turns toward practical decision-making.
Annie explains mental time travel: instead of allowing the emotion of the present moment to dominate a decision, imagine how your future self will view it. A $100 gambling win can feel terrible if you were previously up $2,000, while a $100 loss can feel great if you were previously down $2,000. But one year later, you would simply prefer the $100 win.
Perspective changes the decision.
James adds his own variation: “situation traveling.” If he cannot see a personal problem clearly, he asks what advice he would give his daughter or how he would handle the same situation in business.
They also discuss pre-mortems, negative visualization, planning for obstacles, parenting, “yes, and,” self-serving bias, echo chambers, and the value of saying “I’m not sure.”
For Annie, uncertainty is not weakness.
It is the beginning of curiosity.
And curiosity is what makes learning possible.
Editorial Note:
This is a From the Archive episode originally centered on the 2018 release of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts. Annie has since published How to Decide and Quit: The Power of Knowing When to Walk Away.
The episode uses Nate Silver’s 2016 U.S. presidential-election forecast to illustrate probabilistic thinking. FiveThirtyEight’s final forecast gave Hillary Clinton roughly a 71% chance and Donald Trump roughly a 29% chance—meaning a Trump victory was less likely in the model, but far from a zero-probability event.
What You’ll Learn:
Timestamped Chapters:
[03:03] Thinking in Bets
James introduces Annie and her framework for making decisions when you do not have all the facts.
[05:16] Luck, Skill, and the Stories We Tell Ourselves
James remembers selling a company during the dot-com boom and mistaking a fortunate outcome for evidence that he was a genius.
[07:36] Why It’s Hard to Learn From Winning
Annie and James discuss the tendency to stop examining your performance when the outcome was good.
[09:16] Ego and Temporal Discounting
Annie explains why humans naturally take credit for good outcomes, blame bad ones on luck, and favor immediate emotional rewards.
[11:18] Good Decisions Can Fail
The conversation shifts from learning to decision-making and the importance of accepting uncertain outcomes.
[13:01] Why We Pay to End Uncertainty
James and Annie discuss business deals, pensions, lotteries, and why people accept large discounts to get certainty now.
[14:24] Workshopping the Book in Front of Audiences
Annie explains how years of speaking helped her turn decision science into stories people could actually use.
[17:03] Can You Hack the 10,000-Hour Rule?
James asks how Annie went from graduate school to becoming one of the world’s best poker players.
[18:04] Borrow Someone Else’s 10,000 Hours
Annie explains why learning from people who have already accumulated expertise can dramatically shorten your own learning curve.
[19:57] The Poker Learning Pod
Annie describes the community around her brother, including Erik Seidel and Dan Harrington, and how their thinking accelerated her development.
[20:43] Experience Is Necessary, but Not Sufficient
Annie argues that putting in hours is not enough; you have to know how to interpret feedback.
[23:15] Finding the Right Learning Community
Even if you cannot immediately surround yourself with world-class experts, Annie says you can identify people who are curious, calm, and committed to improvement.
[25:06] Why Teaching Made Annie Better at Poker
Having to explain strategy to beginners forced Annie to discover assumptions she could not actually defend.
[26:05] The Truth Can Atrophy
Annie uses John Stuart Mill to explain why even correct beliefs become weaker if you never have to defend them.
[30:26] Experts, Peers, and Beginners
James and Annie identify three valuable learning communities: people ahead of you, people alongside you, and people you can teach.
[31:10] How Erik Seidel Taught Annie to Think
Annie remembers being told to stop describing a poker hand as “unlucky” and instead provide the details needed to analyze the decision.
[33:16] Don’t Tell Me How the Hand Ended
Annie explains why knowing an outcome can bias the advice someone gives you.
[34:30] Why Headlines Invent Explanations
James compares outcome bias to financial headlines that explain a market move after it has already happened.
[36:27] The Feedback Loop
Annie describes how expert advice, practice, and immediate feedback can dramatically accelerate learning.
[38:50] Virtual Mentors Count Too
Books and other resources can give you access to expert thought processes even when you cannot know the expert personally.
[39:31] Peer Groups vs. Echo Chambers
Annie explains why a group of peers is only useful if everyone is genuinely open to disagreement and new information.
[43:23] Accuracy, Accountability, and Dissent
Annie outlines the three commitments she believes make a strong decision-making group.
[45:02] Bets as Accountability
Putting odds on a belief forces you to clarify how confident you actually are.
[47:17] Make the Decision Before the Market Crashes
Annie explains how predetermined rules and accountability partners can prevent emotional reactions from taking over.
[48:36] Map the Mines Before You Step on Them
Instead of visualizing only a perfect future, Annie recommends identifying the obstacles and disappointments that could derail you.
[50:43] The Backdoor Into an Expert Community
James uses Judd Apatow and podcasting to show how creating something can give you a reason to approach experts.
[52:25] Start With Three People
Annie explains why community does not need to begin with fame or a large audience.
[53:55] Nate Silver and the Meaning of 30 Percent
James and Annie use probabilistic election forecasting to show why people routinely round uncertainty down to zero or up to certainty.
[57:29] What Probabilities Are Actually For
Annie explains how forecasts can help people decide where to spend their time, attention, or resources.
[01:00:55] Mental Time Travel
Annie introduces a technique for escaping the emotional intensity of the present moment by asking how your future self will view the decision.
[01:01:32] The Blackjack Test
Winning $100 after being up $2,000 feels terrible; losing $100 after being down $2,000 feels great. A year later, the preference becomes obvious.
[01:05:05] Have a Conversation With Your Future Self
Annie describes using time travel with her children, while James introduces his own version: “situation traveling.”
[01:06:10] A Community of Different Versions of You
James and Annie expand the idea to future selves, situational selves, and counterfactual versions of yourself.
[01:09:31] Redefining Winning
Instead of defining winning by whether you made money, Annie suggests defining it by whether you learned.
[01:12:00] Drop Down in Stakes to Learn Faster
Annie remembers moving from high-stakes Hold’em to tiny stud games because she cared more about learning the new game than protecting her status.
[01:15:10] Be Open to Dissent
Annie says disagreement is one of the most powerful accelerators of expertise.
[01:15:52] The Power of “I’m Not Sure”
Certainty shuts down curiosity. Annie argues that acknowledging uncertainty keeps you hungry for information.
[01:19:11] Experts Know What They Don’t Know
One mark of expertise, Annie says, is greater awareness of the boundaries of your knowledge.
[01:20:07] Decision-Making for Parents
Annie explains how she redirects her children from blaming a bad test on the teacher toward planning what they can do next time.
[01:22:00] “Yes, And” as a Decision Tool
James connects Annie’s parenting strategy to improv: accept the current reality, then build forward from it.
[01:23:10] David Letterman, Lauren Conrad, and Bad Dissent
Annie explains why challenging someone directly can backfire when you have not agreed to that kind of conversation.
[01:27:45] How Much Can You Really Hack 10,000 Hours?
James asks how much faster deliberate learning can make someone an expert.
[01:32:40] You Don’t Have to Be Great at This
Annie says even modest improvements in recognizing learning opportunities can double how much you learn.
[01:35:17] “Suck Less” and Let It Compound
Small improvements shift the odds over time. Perfection is unnecessary; direction matters.
[01:37:06] Thinking in Bets
James recommends the book and summarizes the conversation around uncertainty, community, self-compassion, and learning.
[01:38:01] Ryan Holiday’s Secret Influence on the Book
Annie explains how the structure of The Obstacle Is the Way and Ego Is the Enemy influenced the way she wrote Thinking in Bets.
Additional Resources: