3 lessons on decision-making from a poker champion | Liv Boeree — Transcript

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1. 0:12So I'm a professional poker player,
2. 0:15and today, I want to talk about three things that the game has taught me
3. 0:20around decision-making that I find apply to everyday life.
4. 0:25Now the first of these things is about luck.
5. 0:27Now, like poker, life is also a game of skill and luck,
6. 0:32and when it comes to the biggest things we care about --
7. 0:35health, wealth and relationships --
8. 0:38these outcomes don't only depend on the quality of our decision-making,
9. 0:42but also the roll of life's dice.
10. 0:43For example, we can be perfectly health-conscious
11. 0:46and still get unlucky with something like cancer.
12. 0:50Or we can smoke 20 a day and live to a ripe old age,
13. 0:53and this kind of ambiguity can make it hard for us to know
14. 0:56how good our strategies are, sometimes,
15. 0:59especially when we're experiencing a lot of success.
16. 1:03For example, back in 2010,
17. 1:04I won a really big poker tournament known as the European Poker Tour.
18. 1:08And because I'd only been playing full-time for about a year,
19. 1:12when I won, I assumed I must be rather brilliant.
20. 1:16In fact, I thought I was so brilliant
21. 1:17that I not only got rather lazy with studying the game,
22. 1:21but I also got more risky,
23. 1:23started playing in the biggest tournaments I could
24. 1:26against the very best in the world.
25. 1:28And then my profit graph went from a thing of beauty
26. 1:32to something kind of sad,
27. 1:34with this worrying downhill trend for a long time,
28. 1:37until I finally realized that I was overestimating my skill level,
29. 1:40and got my act together.
30. 1:42And this kind of reminds me of what we've been seeing
31. 1:45in the cryptocurrency space, at least in 2017,
32. 1:47where the only thing that's been going up faster than the markets themselves
33. 1:51is the number of "senior investment specialists"
34. 1:53who have been appearing out of nowhere.
35. 1:56Now I'm not saying it's not possible to have a strategic edge,
36. 1:59but at the same time, it's very easy to feel like a genius
37. 2:02when you're in a market that's going up so fast
38. 2:04that even the worst strategies are making a profit.
39. 2:07So when we're experiencing success,
40. 2:09it's important to take a moment to really ask ourselves
41. 2:12how much of it is truly down to us,
42. 2:15because our egos love to downplay the luck factor when we're winning.
43. 2:21Now, a second thing poker taught me
44. 2:23is the importance of quantifying my thinking.
45. 2:26When you're playing, you can't just get away with going,
46. 2:29"Eh, they're probably bluffing."
47. 2:31That's just going to lose you a bunch of money,
48. 2:33because poker is a game of probabilities and precision,
49. 2:36and so you have to train yourself to think in numbers.
50. 2:40So now, whenever I catch myself
51. 2:42thinking vaguely about something really important, like,
52. 2:46"It's unlikely I'll forget what I want to say in my TED Talk,"
53. 2:49I now try to estimate it numerically.
54. 2:52(Laughter)
55. 2:53Trust me, it helps a lot with the planning process.
56. 2:56And the thing is, almost anything that could possibly happen here today,
57. 2:59or at any point in the future,
58. 3:01can also be expressed as a probability, too.
59. 3:04(Laughter)
60. 3:07So now I also try to speak in numbers as well.
61. 3:10So if someone asks me,
62. 3:11"Hey, Liv, do you think you're going to come along to that thing tonight?"
63. 3:15instead of just saying to them, "Yeah, probably,"
64. 3:17I actually give them my best estimate --
65. 3:19say, 60 percent.
66. 3:21Because -- I know that sounds a little odd --
67. 3:23but the thing is, I ran a poll on Twitter
68. 3:26of what people understand the word "probably" to mean,
69. 3:29and this was the spread of answers.
70. 3:30Enormous!
71. 3:32So apparently, it's absolutely useless
72. 3:33at actually conveying any real information.
73. 3:36So if you guys catch yourselves using these vague words,
74. 3:40like "probably" or "sometimes,"
75. 3:43try, instead, using numbers, because when we speak in numbers,
76. 3:46we know what lands in the other person's brain.
77. 3:50Now, the third thing I want to touch on today is intuition.
78. 3:55How often have you seen these kinds of inspirational memes
79. 3:58in your Facebook feed?
80. 4:01[Always trust your gut feeling and never second-guess.]
81. 4:03They're nice, right?
82. 4:05It's lovely. Yes. "Trust your soul."
83. 4:09Well, they're terrible advice.
84. 4:11These are some of the best poker players in the world right now.
85. 4:14Do they look like people who live purely off feelings and intuitions?
86. 4:19(Laughter)
87. 4:20Look at them!
88. 4:21Obviously, these guys are about slow, careful analysis,
89. 4:26and that's because the game has outgrown the days
90. 4:29where pure street smarts and people-reading
91. 4:32can get you to the top.
92. 4:33And that's because our intuitions aren't nearly as perfect
93. 4:37as we'd like to believe.
94. 4:38I mean, it'd be great, whenever we're in a tough spot,
95. 4:41to just have an answer appear to us from some magical source of inspiration.
96. 4:45But in reality, our gut is extremely vulnerable
97. 4:48to all kinds of wishful thinking and biases.
98. 4:52So then, what is our gut good for?
99. 4:55Well, all the studies I've read
100. 4:57conclude that it's best-suited for everyday things
101. 5:01that we have lots and lots of experience in,
102. 5:03like how we just know that our friend is mad at us
103. 5:06before we've even said anything to them,
104. 5:08or whether we can fit our car into a tight parking spot.
105. 5:11But when it comes to the really big stuff,
106. 5:13like what's our career path going to be
107. 5:16or who should we marry,
108. 5:17why should we assume that our intuitions
109. 5:21are better calibrated for these than slow, proper analysis?
110. 5:25I mean, they don't have any data to be based off.
111. 5:28So my third lesson is, while we shouldn't ignore our intuitions,
112. 5:32we shouldn't overprivilege them either.
113. 5:34And I'd like to summarize these three lessons today
114. 5:37with my own set of memes,
115. 5:38with more of a poker-player twist.
116. 5:41"Success is sweetest when you achieve it across a large sample size."
117. 5:46(Laughter)
118. 5:47"Your gut is your friend and so is a cost-benefit analysis.
119. 5:52(Laughter)
120. 5:53"The future is unknown, but you can damn well try and estimate it."
121. 5:58Thank you.
122. 5:59(Applause)