TIP715: Thinking in Bets by Annie Duke

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 18 April 2025

⏱️ 61 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, Clay explores the book Thinking in Bets by Annie Duke, a guide to making better decisions under uncertainty. Drawing from her career as a professional poker player, Annie shares how to separate decision quality from outcomes and avoid the trap of “resulting.” Clay also discusses how our brains are wired for certainty, why embracing probabilistic thinking leads to better outcomes, and the value of building a truth-seeking support system. Additionally, he uncovers tools like backcasting, premortems, and kill criteria to improve long-term decision-making as investors. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 01:36 - What it means to “think in bets” and how poker can sharpen decision-making. 05:57 - The concept of “resulting” and how it distorts our ability to evaluate decisions. 08:17 - Why good decisions can still lead to bad outcomes—and vice versa. 09:41 - The role of System 1 vs. System 2 thinking in making better choices. 10:44 - How investing parallels poker with incomplete information and uncertainty. 26:29 - How to build a feedback loop that separates luck from skill. 34:03 - The importance of building a truth-seeking group or “buddy system.” 35:02 - The dangers of confirmation bias and how beliefs are often formed by default. 52:54 - How backcasting and premortems can help map out future decisions. 57:16 - The power of setting kill criteria to avoid emotional decision-making. And so much more! Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here. Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members. Annie Duke’s book: Thinking in Bets. Mentioned book: Big Mistakes. Related Episode: TIP623: The Art of Decision Making w/ Annie Duke. Related Episode: RWH015: Betting Better in Markets and Life w/ Annie Duke. Follow Clay on LinkedIn & X. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter. Check out our We Study Billionaires Starter Packs. Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: SimpleMining Hardblock Found AnchorWatch Fundrise DeleteMe CFI Education The Bitcoin Way Vanta Shopify Indeed Onramp HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP. Have you ever made a decision that turned out poorly and immediately
0:06.4	assumed it was a bad decision? Or maybe you got lucky and things turned out well for you and thought
0:12.2	you made a brilliant call. In today's episode, we explore why those snap judgments can be so misleading
0:18.7	and lead to poor decision making. We're diving into Annie Duke's
0:22.7	powerful book Thinking in Betts, where she shares practical ways we can make better decisions
0:27.8	and overcome a host of behavioral biases. Most decisions are made under uncertainty, with incomplete
0:35.1	information, and luck plays a big role in the outcome. But judging your
0:39.8	decisions based solely on how things turned out can keep you from learning and improving. Annie teaches
0:46.4	us how to separate decision quality from results, and she introduces the concept of resulting,
0:52.2	a trap we all fall into, and shows how it clouds our judgment.
0:56.1	Whether you're investing, leading a team, or making everyday choices, the wisdom that Annie shares
1:01.9	will sharpen the way you think, and by the end of the episode, hopefully you'll have a better
1:06.4	framework for making smarter decisions when faced with enormous uncertainty.
1:15.6	With that, let's dive right into today's episode covering Thinking and Betts by Annie Duke. Since 2014 and through more than 180 million downloads, we've studied the financial markets and read the books that influence self-made billionaires the most.
1:29.5	We keep you informed and prepared for the unexpected.
1:32.6	Now for your host, Playthink.
1:38.8	On today's episode, we'll be chatting about Annie Duke's book, Thinking and Betts.
1:47.6	Annie Duke is not an investor, but she is an avid student and expert on the topic of decision-making.
1:54.5	Annie spent 20 years as a professional poker player and won a number of major poker events,
2:00.0	including the World Series of Poker
2:01.6	Gold Braclet and earned $4 million in poker tournaments before retiring in 2012. Through her experience
2:08.2	playing poker, she realized that she had almost by happenstance entered an arena where she
	...

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