Annie Duke on Why We Judge Decisions by Results, Not Logic [From the Archive]

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Presenting The Archive, classic episodes that remain timeless, the raw, unfiltered conversations from the early days in which people shared their failures and showed us exactly how they rebuilt everything from the ground up.

Annie Duke (1:26)

In the first half hour, all you do is get blackjack. Just blackjack, blackjack, blackjack. You can't lose a hand. You end up up, say, $2,000.

And it's just because everything went your way. But your friends are still playing, so you continue to play. And over the next hour and a half, you lose all but $100 back. You know, how are you feeling about that?

James Altucher (1:43)

Right. So you're feeling horrible even though you're up $100.

Annie Duke (1:45)

Even though you're up $100. Now we can do the reverse.

James Altucher (1:49)

He had predicted Trump at 30 or 40% before the election. Now, after Trump won, everybody trashed Nate Silver. So there's this ugly thing happened, which happens on the Internet often, which is that there was hate. Because someone seemed wrong and stupid, it gave people an excuse to hate him. But the point you make, which is very interesting, is that he might have been dead right the whole time, in the sense that maybe there was a 30% chance that Trump would win. And okay, 30% is actually a fairly big number. Three out of ten times, someone will win, who has a 30% chance.

I am so happy to have Annie Duke, one of the best poker players ever, in the room, on the podcast. How's it going, Annie?

Annie Duke (2:41)

It's going pretty well.

James Altucher (2:42)

Now you wrote this book, Thinking in Bets, Making Smarter Decisions When You Don't Have All the Facts. Is that the subtitle?

Annie Duke (2:50)

It is the subtitle, yeah. Let's just call it Thinking in Bets. I think it's a lot easier.

James Altucher (2:54)

Yeah.

Annie Duke (2:55)

Yes, it's a lot easier.

James Altucher (2:56)

And I always, I don't like how, I'm not blaming your publisher. I know Portfolio, they're great guys. I just don't like subtitles in general because I can never remember them. But they make you have them.

Annie Duke (3:06)

Yeah, they make you have them because I think it does narrow it down for somebody who's just browsing it in a bookstore. So I think that's good. You know, Thinking in Bets was, you know, that was the title. So then we worked on the subtitle a whole bunch in terms of, well, okay, you know, how do we define this down?

James Altucher (3:23)

And I'll describe the book in a second, but I just want you to know I've already made about three decisions today based on the principles in this book.

Annie Duke (3:31)

Are you serious?

James Altucher (3:31)

Yeah. Obviously nothing having to do with poker.

Annie Duke (3:34)

Of course not.

James Altucher (3:34)

And your book is not, your book is just, poker is kind of an example. You have many other examples, but it's a whole philosophy about how to think and make decisions.

So, I feel like there's two aspects to this book that's really strong. One is how do you learn things that are very hard to learn, and one is how do you make decisions in situations that are much more complicated than you think.

Annie Duke (3:59)

Which is pretty much every situation is more complicated than you think.

James Altucher (4:03)

Right. And by the way, you kind of differentiate poker from chess, but we'll get to that in a second. Poker being a game with hidden information, so often the decisions have to be made without knowing all of what's going on.

Annie Duke (4:15)