3 lessons on decisionmaking from a poker champion Liv Boeree
So I’m a professional poker player,
and today, I want to talk about
three things that the game has taught me
around decision-making
that I find apply to everyday life.
Now the first of these things
is about luck.
Now, like poker, life is also
a game of skill and luck,
and when it comes
to the biggest things we care about –
health, wealth and relationships –
these outcomes don’t only depend
on the quality of our decision-making,
but also the roll of life’s dice.
For example, we can be
perfectly health-conscious
and still get unlucky
with something like cancer.
Or we can smoke 20 a day
and live to a ripe old age,
and this kind of ambiguity
can make it hard for us to know
how good our strategies are, sometimes,
especially when we’re
experiencing a lot of success.
For example, back in 2010,
I won a really big poker tournament
known as the European Poker Tour.
And because I’d only been playing
full-time for about a year,
when I won, I assumed
I must be rather brilliant.
In fact, I thought I was so brilliant
that I not only got rather lazy
with studying the game,
but I also got more risky,
started playing in
the biggest tournaments I could
against the very best in the world.
And then my profit graph went
from a thing of beauty
to something kind of sad,
with this worrying
downhill trend for a long time,
until I finally realized
that I was overestimating my skill level,
and got my act together.
And this kind of reminds me
of what we’ve been seeing
in the cryptocurrency space,
at least in 2017,
where the only thing that’s been going up
faster than the markets themselves
is the number of “senior
investment specialists”
who have been appearing out of nowhere.
Now I’m not saying it’s not possible
to have a strategic edge,
but at the same time,
it’s very easy to feel like a genius
when you’re in a market
that’s going up so fast
that even the worst strategies
are making a profit.
So when we’re experiencing success,
it’s important to take a moment
to really ask ourselves
how much of it is truly down to us,
because our egos love to downplay
the luck factor when we’re winning.
Now, a second thing poker taught me
is the importance
of quantifying my thinking.
When you’re playing,
you can’t just get away with going,
“Eh, they’re probably bluffing.”
That’s just going to lose you
a bunch of money,
because poker is a game
of probabilities and precision,
and so you have to train yourself
to think in numbers.
So now, whenever I catch myself
thinking vaguely about something
really important, like,
“It’s unlikely I’ll forget
what I want to say in my TED Talk,”
I now try to estimate it numerically.
(Laughter)
Trust me, it helps a lot
with the planning process.
And the thing is, almost anything
that could possibly happen here today,
or at any point in the future,
can also be expressed
as a probability, too.
(Laughter)
So now I also try to speak
in numbers as well.
So if someone asks me,
“Hey, Liv, do you think you’re going
to come along to that thing tonight?”
instead of just saying to them,
“Yeah, probably,”
I actually give them my best estimate –
say, 60 percent.
Because – I know that sounds
a little odd –
but the thing is, I ran a poll on Twitter
of what people understand
the word “probably” to mean,
and this was the spread of answers.
Enormous!
So apparently, it’s absolutely useless
at actually conveying
any real information.
So if you guys catch yourselves
using these vague words,
like “probably” or “sometimes,”
try, instead, using numbers,
because when we speak in numbers,
we know what lands
in the other person’s brain.
Now, the third thing I want
to touch on today is intuition.
How often have you seen
these kinds of inspirational memes
in your Facebook feed?
[Always trust your gut feeling
and never second-guess.]
They’re nice, right?
It’s lovely. Yes. “Trust your soul.”
Well, they’re terrible advice.
These are some of the best
poker players in the world right now.
Do they look like people who live
purely off feelings and intuitions?
(Laughter)
Look at them!
Obviously, these guys
are about slow, careful analysis,
and that’s because the game
has outgrown the days
where pure street smarts
and people-reading
can get you to the top.
And that’s because our intuitions
aren’t nearly as perfect
as we’d like to believe.
I mean, it’d be great,
whenever we’re in a tough spot,
to just have an answer appear to us
from some magical source of inspiration.
But in reality, our gut
is extremely vulnerable
to all kinds of wishful
thinking and biases.
So then, what is our gut good for?
Well, all the studies I’ve read
conclude that it’s best-suited
for everyday things
that we have lots
and lots of experience in,
like how we just know
that our friend is mad at us
before we’ve even said anything to them,
or whether we can fit our car
into a tight parking spot.
But when it comes to the really big stuff,
like what’s our career path going to be
or who should we marry,
why should we assume that our intuitions
are better calibrated for these
than slow, proper analysis?
I mean, they don’t have
any data to be based off.
So my third lesson is,
while we shouldn’t ignore our intuitions,
we shouldn’t overprivilege them either.
And I’d like to summarize
these three lessons today
with my own set of memes,
with more of a poker-player twist.
“Success is sweetest when you achieve it
across a large sample size.”
(Laughter)
“Your gut is your friend
and so is a cost-benefit analysis.
(Laughter)
“The future is unknown, but you can
damn well try and estimate it.”
Thank you.
(Applause)