Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.
By Annie Duke
If the NFL created a fan-based award at Pro Football’s Hall of Fame in Canton, Ohio, I would nominate this author! Annie Duke’s picture would be placed in the Seattle Seahawks’ exhibit hall. She is a loyal, passionate, forgiving, smart, and insightful Sea Hawks fan, which is well-documented in her excellent book. I came away convinced that Pete Carroll is one of the greatest coaches of all time, and that’s saying a lot from a Packer fan. She argues that, with clear thinking and complete analyses, he made the correct decision in the 2015 Superbowl. While his infamous decision cost the Seahawks the Super Bowl, according to the author, he made the appropriate decision to have his quarterback throw rather than a running play. While we might judge a decision by its results, his decision was based on shrewd probabilities.
The topics she covers are emotional, complicated, and subjective. She uses the tactics employed in the game of poker as examples of how people can make good decisions in our regular lives. Her primary lesson is to focus on the process of deciding, not only on the result. Process not product.
I read a lot of personal finance and spiritual books. Her positions on uncertainty vs. certainty, and luck vs. skill, rational and irrational, combined with our biases, and the proper definition of confidence are spot on. For example, certainty does not exist except for the fact that we are born, must pay taxes, and someday must face death. The past has all the answers to show better decisions but by then it’s too late. So, using past information and experience is a small part of decision making.
Duke talks about luck for good reason. Being lucky happens more than we like to admit, but skill has a place too. Humans believe that it was due to our skill when the decision was great, and it was luck when the decision was not. Knowing the complex interaction between luck and skill will help us learn from negative results to make better decisions in the future. BTW, there is nothing inherently wrong or insulting if being lucky outperformed being skillful. Being lucky works to our benefit too, but we need to be aware of the relationship with skill.
Seeking another person’s or group’s point of view of your work seems to be so straight forward and filled with common sense. I have read enough success books where people say they hire people or consult with others who are more experienced, smarter, and more knowledgeable than we are. Duh! Of course.
The author practiced what she preaches and sought out and LISTENED to everything offered, positive and negative, by more experienced poker colleagues. When I was a novice teacher, I sought and watched experienced teachers in their classrooms and attended their classroom management workshops. When I had personal problems, I sought therapy. When I lost my spouse of 40 years, I sought a bereavement group. When I needed help with my investment decisions, I read many books and talked to knowledgeable friends and experts at conferences.
When I wrote my two books and my blog, I took many writing classes, workshops, and attended critique groups. I believe the author would agree that a critique group serves as one of the best methods to mitigate the effects of unclear, unfocused, and uninteresting writing. It can be a painful process listening to one’s biases, conflicts, and irrationality discussed by other writers in a critique group, but it promotes one’s writing to become more precise.
When I was in high school football, I often sat on the bench. But instead of feeling sorry for myself, I learned to love the practice sessions because they offered my main opportunities to play. When I made investing mistakes, I used the information from my studies and my experience to straighten out myself and my portfolio, and eventually became a successful investor.
For all these reasons, Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke earned my five-star rating. However, I have two minor quibbles. First, is with truth and truth finders. Truth is not something outside of ourselves. I believe truth is in the eye of the beholder. The author made it sound like that finding the “truth” is the ultimate goal before making the decision.
Secondly, I think championship poker players would benefit from an intense and profound memory of the cards dealt. That’s significant evidence to also consider for deciding to fold or bet. Of course, in the final analyses, players never know what is in their opponents’ hands, but knowing what was discarded is important. Perhaps the author left out this basic skill because knowing what the opponents don’t have is meaningless. Duke’s primary point throughout the book is how to minimize uncertainty. Knowing what was discarded by other players does not eliminate the uncertainty of not knowing what they have. In poker, as in real life, uncertainty is everywhere. Whether decisions about who we love, which career, where we live, or how we invest and manage our finances, and it is in our best interests to drink a cup of coffee with uncertainty.
The author wrote an excellent book on these essential concepts that not only show us how to make better decisions but reflect a successful and happy life. When we can accept the results of our well-planned and thought-out decisions, whether positive or negative, right or wrong results, we will experience more contentment, fulfillment, and success.
Steve’s BIO
Stephen A. Schullo, Ph.D. (UCLA ’96) taught in the Los Angeles Unified School District (LAUSD) for 24 years and UCLA Extension teaching educational technology to student teachers. Steve wrote investment articles for the United Teacher-Los Angeles (UTLA) union newspaper for 13 years. He has been featured and quoted in many mainstream media articles about 403(b) plans, including the Los Angeles Times, NY Times, and U.S. News and World Report. He co-founded an investor self-help group 403bAware for teacher colleagues and wrote 7,500 posts in three investment forums since 1997. He testified at California State legislative hearings and honored with the “Unsung Hero” award by his teacher’s union for his retirement planning advocacy.
For the last 14 years, he serves as a volunteer on LAUSD’s Investment Advisory Committee as a “Member-at-Large” and former co-chair. The committee contains collective bargaining reps from the unions and monitors the district’s tax-deferred retirement plans, 457b/403b, of 55,000 former and current LAUSD employees, worth $2.8 billion in total assets.
He started this blog in 2012 to help all PreK-12 public school educators nationwide, especially his Los Angeles Unified School District colleagues. He belongs to a small national group of 403(b) advocates (mostly teachers) who want to bring closer attention to the 403(b). During the last 25 years, 40 newspaper articles have been published and each one says the same thing, TSAs (Tax Sheltered Annuities) are terrible 403(b) plans and the salesperson gets the benefit from lucrative commissions and high-costs. Nobody in educational leadership reads these articles NOR talk about the proper place for annuity products publically. We come together at 403bwise.com and 403bwise Facebook page https://www.facebook.com/groups/349968819000560/ Come on over if you want to join us so we can help our colleagues avoid these self-conflicted and high-cost Tax-sheltered Annuities (TSAs).
Steve is the author of two books, Late Bloomer Millionaires and Fighting Powerful Interests: Educators Challenge Tax-sheltered Annuities and WIN!, a story of how a handful of LAUSD educators struggled for years to improve the 403(b) to no avail. But we never quit! We were instrumental in LAUSD’s implementation of the new 457(b) plan and earned a very rare, but very precious “Plan Design” award.
For a copy of both books, email Steve at steve.schullo@latebloomerwealth.com and he will happily email you both books, FREE with no obligation except to read them and get informed, in a pdf file format.