Notes from Thinking In Bets by Annie Duke
- Plenty of parallels between Annie’s take on risks & decision making and Howard Marks in his book The Most Important Thing, such as:
- The outcome of a decision and the quality of the decision need not be the same. Ergo, a well-made decision may not produce the intended effect; a great outcome does not always require great decision making.
- Recognize that with each of your actions, you are betting on your beliefs (about your happiness, attention, health, money, time…). You are betting on future versions of yourself.
- Make explicit your beliefs, and assign to these statements a 0-to-10 rating of your confidence in the accuracy of your belief. Then, list the possible alternatives and their ranges for a more complete prediction.
- Parallels to Jordan Peterson’s guide to essay writing: attempt to rip apart your hypothesis with plausible alternatives, the more the better. Learn your opponent’s perspective and master its articulation. If you accomplish this and maintain your conviction to your hypothesis, then you can move forward.
- Making mistakes does not ensure learning and growth. “Experience is not what happens to a man; it is what a man does with what happens to him.”
- Parallels with Principles by Ray Dalio:
- Make bets/predictions about outcomes. When you’re right, understand that the outcome was probabilistic, not inevitable. Don’t get comfortable, and continue betting. Don’t blame bad outcomes on bad luck — re-examine your process. Gather data, widen your scope of potential factors, then prune down to identify the significant few (same recipe for building regression models). The goal is to develop a feedback loop to keep you in the game and avoid gambler’s ruin.
- “What are the consequences of each of my options in ten minutes? In ten months? In ten years? How would I feel today if I had made this decision ten minutes ago? Ten months ago? Ten years ago?”
- “Imagine yourself looking back from the destination and figure how you got there. Remembering the future is a better way to plan for it.”
- Parallels with Tim Ferriss’ fear-setting technique:
- Goal accomplishment is helped by negative visualization
- Start a premortem by imagining why you failed to reach your goal. (Atul Gawande has talked about this too.)
The Riches of Macau
- Macau is the Las Vegas of China – but much bigger. Because gambling in China is outlawed outside of Macau, gaming revenues are estimated to be 5X that of the Las Vegas strip
- GDP per capita by 2020 is estimated at $143K, highest in the world (above Qatar, Luxembourg, Singapore)
- The majority of the profits for Wynn Resorts and Las Vegas Sands come from Macau, not Vegas (71% and 53% of profits, respectively)
- Go deeper: how many billions get laundered through Macau? The Chinese elite looking to move money outside of the country are limited to $50K/year transfers, but Macau offers an alternative: casino chips can be converted into any currency, i.e., USD, which are then much more fluid.
The Story of Biggie and Tupac
- A lesson from Tupac: “If you want to make your money, you have to rap for the [women]. Do not rap for the [guys],” he said. “The [women] will buy your records, and the [guys] want what the [women] want.” Target demographics 101.
Mattis’ Resignation as Defense Secretary
- Mr. Mattis, a retired four-star Marine general, resigned in protest of President Trump’s decision to withdraw American forces from Syria. He asked aides to print out 50 copies of his resignation letter and distribute them around the building.
- Resignation letter.