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The premier thinker on decision-making: @AnnieDuke
Her new book How to Decide is an absolute masterclass.
And she's recently spoken with:
• @SeanDeLaney23
• @ChrisWillx
• @tseides
• @jposhaughnessy
• @InvestorAmnesia
Across all of these, here's everything she's taught me
Her new book How to Decide is an absolute masterclass.
And she's recently spoken with:
• @SeanDeLaney23
• @ChrisWillx
• @tseides
• @jposhaughnessy
• @InvestorAmnesia
Across all of these, here's everything she's taught me
1/ Annie's Background
If you've never heard of @AnnieDuke:
• WSOP bracelet holder.
• Author of Thinking in Bets and How to Decide.
• Founder of the Alliance for Decision Education.
• Master of the intersection between luck, skill, and decision-making under uncertainty.
If you've never heard of @AnnieDuke:
• WSOP bracelet holder.
• Author of Thinking in Bets and How to Decide.
• Founder of the Alliance for Decision Education.
• Master of the intersection between luck, skill, and decision-making under uncertainty.
2/ The importance of decision-making
Two things determine your life: luck and the quality of your decisions.
You control just one of them: how you make decisions.
Decisions are simply predictions about the future.
Better decisions <==> Better results.
Two things determine your life: luck and the quality of your decisions.
You control just one of them: how you make decisions.
Decisions are simply predictions about the future.
Better decisions <==> Better results.
3/ Decision-making frameworks
To make quality decisions, ditch your gut and create a framework.
Gut decisions:
• Not repeatable
• Hard to examine
• Unique to you
• Filled with biases
Decision-making frameworks:
• Repeatable
• Examinable
• Transferrable
• Accountable
To make quality decisions, ditch your gut and create a framework.
Gut decisions:
• Not repeatable
• Hard to examine
• Unique to you
• Filled with biases
Decision-making frameworks:
• Repeatable
• Examinable
• Transferrable
• Accountable
4/ Process over outcome
Resulting is the tendency look at the OUTCOME of a decision to judge its quality.
The best decision-makers separate PROCESS from OUTCOME.
Bad outcome, good process -> works in the long run.
Good outcome, bad process -> fails in the long run.
Resulting is the tendency look at the OUTCOME of a decision to judge its quality.
The best decision-makers separate PROCESS from OUTCOME.
Bad outcome, good process -> works in the long run.
Good outcome, bad process -> fails in the long run.
5/ Hindsight bias
Hindsight bias is the tendency to believe an outcome was predictable or inevitable.
It manifests in two ways: "Should have knowns" and "Knew it all alongs"
To prevent it, note down all of the knowns and unknowns when making a decision.
Hindsight bias is the tendency to believe an outcome was predictable or inevitable.
It manifests in two ways: "Should have knowns" and "Knew it all alongs"
To prevent it, note down all of the knowns and unknowns when making a decision.
6/ The Three Ps
Preferences: which outcomes you want and don't want.
Payoffs: how an outcome effects your progress toward or away from a goal.
Probabilities: the likelihood of a certain outcome.
Good decision-making is a constant back-and-forth dance between these three.
Preferences: which outcomes you want and don't want.
Payoffs: how an outcome effects your progress toward or away from a goal.
Probabilities: the likelihood of a certain outcome.
Good decision-making is a constant back-and-forth dance between these three.
7/ Analysis paralysis
There is one trade-off in decision-making: speed and accuracy.
To decide how quickly to decide, gauge the downside or worst case of making the wrong decision.
Low downside: optimize for speed.
High downside: optimize for accuracy.
There is one trade-off in decision-making: speed and accuracy.
To decide how quickly to decide, gauge the downside or worst case of making the wrong decision.
Low downside: optimize for speed.
High downside: optimize for accuracy.
8/ Wasteful decision-making
We spend too much time on inconsequential decisions: almost six weeks per year.
• What to wear each day
• What to order at a restaurant
• What to watch on Netflix
Identify these wastes of mental bandwidth.
We spend too much time on inconsequential decisions: almost six weeks per year.
• What to wear each day
• What to order at a restaurant
• What to watch on Netflix
Identify these wastes of mental bandwidth.
9/ The happiness test
To gauge the importance of a decision:
1. Picture the worst case outcome.
2. Fast forward a year. Ask yourself "is my happiness today affected by that decision?"
3. Then repeat for six months and one week.
4. When the answer is no to each, move fast.
To gauge the importance of a decision:
1. Picture the worst case outcome.
2. Fast forward a year. Ask yourself "is my happiness today affected by that decision?"
3. Then repeat for six months and one week.
4. When the answer is no to each, move fast.
10/ Backcasting and premortems
Backcasting: reverse engineering your outcomes.
• Decide on an outcome, implement the system to achieve it.
Premortems: reverse engineering failures.
• Fast forward to a future failure. Think about what led to it. Avoid doing those things.
Backcasting: reverse engineering your outcomes.
• Decide on an outcome, implement the system to achieve it.
Premortems: reverse engineering failures.
• Fast forward to a future failure. Think about what led to it. Avoid doing those things.
11/ Six steps to better decision making
1. Identify the possible outcomes.
2. Identify your preference for each outcome.
3. Estimate the likelihood of each outcome.
4. Assess the relative likelihood of outcomes you like and dislike.
5. Repeat for each option.
6. Compare them.
1. Identify the possible outcomes.
2. Identify your preference for each outcome.
3. Estimate the likelihood of each outcome.
4. Assess the relative likelihood of outcomes you like and dislike.
5. Repeat for each option.
6. Compare them.
12/ Decision hygiene
Other's perspectives improve our decision-making.
But we can't infect them with our opinion without biasing them.
When seeking someone's opinion, don't give away yours.
The best example: get opinions on an issue in writing BEFORE a meeting starts.
Other's perspectives improve our decision-making.
But we can't infect them with our opinion without biasing them.
When seeking someone's opinion, don't give away yours.
The best example: get opinions on an issue in writing BEFORE a meeting starts.
13/ Learn more from @AnnieDuke
Buy Thinking in Bets: https://amzn.to/3dA5ZqO
Buy How to Decide: https://amzn.to/3lWi6Bq
Check out her foundation: The Alliance for Decision Education https://www.alliancefordecisioneducation.org/
Buy Thinking in Bets: https://amzn.to/3dA5ZqO
Buy How to Decide: https://amzn.to/3lWi6Bq
Check out her foundation: The Alliance for Decision Education https://www.alliancefordecisioneducation.org/
14/ Listen to @annieduke
Infinite loops w/ @jposhaughnessy and @InvestorAmnesia
https://twitter.com/jposhaughnessy/status/1316733915541970945?s=21
Modern wisdom: w/ @ChrisWillx: https://open.spotify.com/show/7yAAsaj77q3jQLbX8NAQ7J
Capital Allocators w/ @tseides: https://open.spotify.com/episode/4XxiZknQoccxOM0Kwi9pfQ?si=O0KSdZoVTrmxf_w63QHhZg
The Drive w/ @PeterAttiaMD:
https://open.spotify.com/episode/2c1k8KvSJbhUOPvw9yeO5D?si=ZIRtSu88RIG6nMOP4oQn_g
Infinite loops w/ @jposhaughnessy and @InvestorAmnesia
https://twitter.com/jposhaughnessy/status/1316733915541970945?s=21
Modern wisdom: w/ @ChrisWillx: https://open.spotify.com/show/7yAAsaj77q3jQLbX8NAQ7J
Capital Allocators w/ @tseides: https://open.spotify.com/episode/4XxiZknQoccxOM0Kwi9pfQ?si=O0KSdZoVTrmxf_w63QHhZg
The Drive w/ @PeterAttiaMD:
https://open.spotify.com/episode/2c1k8KvSJbhUOPvw9yeO5D?si=ZIRtSu88RIG6nMOP4oQn_g
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- Physical growth
- Network growth
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- Business growth
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- Productivity growth
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