Book Review: Thinking in Bets

The Book ‘ Thinking in Bets’ is written by Annie Duke, who is a world class poker champion

Most decisions in life are made using incomplete information.Often we use the positive outcome of the decision as superior decision making. The author calls this as ‘resulting’. The key is not to focus on one outcome but on the process/decision tree behind the decision

The Book explains that all decisions are actually bets .Our beliefs and psychological biases determine our bets and sizing of them

The author talks about a Buddy system which can help improve our decision making. She also talks about scepticism and how it can be used for better decision making.

The Book also mentions using scenario planning etc to plan for different scenarios .Backcasting is when you work backward from a positive future and premortem is when you work backward from a negative future.

There is this old (from 1947 !) joke by Ben Graham which is actually the essence of the Book

There is a beautiful little story, that I suppose most of you have heard, about the man
who was the weaker bridge player of the husband-and-wife team. It seems he bid a
grand slam, and at the end he said very triumphantly to his wife, “I saw you making
faces at me all the time, but you notice I not only bid this grand slam but I made it.
What can you say about that?” And his wife replied very dourly, “If you had played
it right you would have lost it.”

I would recommend this Book only to those who didnt understand the joke !

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