The Biggest Bluff by Maria Konnikova

This book has been all over a few of the podcasts I listen to, mainly with the Freakonomics (Steven Levitt and Stephen Dubner) boys as they are a bit obsessed — and rightfully so, in my opinion — with how bias affects the decision making process, and how that bias can alter our behaviors in real-world settings. Konnikova is a very accomplished psychologist and writer for The New Yorker, but she spent the better part of 2018 and 2019 working with one of the best poker players in the world and basically taught herself how to become a world champion player. This is not a book about how to play poker, per se, but truly a book about how to “play the game of life”, as Konnikova puts it in one of her opening chapters. She offers remarkable insight into not only her own personal decision making process, but also into the thoughts and behaviors of humans in general. A large portion of the book details her incredible story from novice to champion, but it flows neatly back and forth between that story and everything she learned in between — the hardships, failures, setbacks, lessons, rewards, and, ultimately, her triumph of the poker world. It’s a really excellent and truly remarkable story — and a quick, breezy read that lead to some of my favorite and most insightful notes from the past year. These notes only took me about an hour to compile but rest assured I will be circling back to them on a VERY regular basis.

• In stocks, over and over, people would underestimate the degree of control they had over events
• more they overestimated their own skill relative to luck, less they learned from what the environment was trying to telll them, and the worse their decision making became
• participants grew increasingly less likely to switch to winning stocks
• illusion of control is what prevented real control over the game from emerging — before long, quality of people’s decisions deteriorate
• humans too often think we are in control when we are playing by the rules of chance
• equation of luck and skill is probabilistic
• description/experience gap: people fail to internalize numeric rules, making decisions based on things like gut feeling or intuition
• we believe what we want to see, not what the research says
• you can show people all the charts you want, won’t change their perceptions of the risks or their resulting decisions
• what will change their minds? going through an event themselves, or knowing someone who has
• likelihood of slipping in the shower is orders of magnitude larger than your likelihood of being in a terrorist attack
• we don’t often questions the role of chance in the moments it protects us from others and ourselves
• John Von Neumann — Theory of Games and Economic Behavior — father of game theory, inspired by poker
• for poker, it is chance and control — luck is a short term friend or foe; skill shines through over the long time horizon
• real life is based on making the best decisions you can from information that can never be complete — you never know someone’s real mind, just like you can never know any poker hand but your own
• the author played Texas Hold Em, because in life, there is never a limit: no external restriction to betting everything you have on any given decision
• poker as a lens into the most difficult and important life decisions we have to make — an exploration of chance and skill in life, and an attempt to learn to navigate it and optimize it to the best of our potential
• a book about how to play the world, not poker
• we judge the poker player for gambling, but we respect the stockbroker for doing the same thing with far less information
• in poker, you can win with the worst hand and you can lose with the best hand
• more often than not, it’s not the best hand that wins — it’s the best player
• success in poker implies far more skill than success in that far more respectable profession, investing
• betting on uncertainty
• betting in poker isn’t incidental — integral to the learning process
• our minds learn when we have a stake, a real stake, in the outcome of our learning
• numerous studies show that professional investors have a remarkable ability to ignore statistical information for their own gut and intuition, and that they’d often be better served not trading at all
• nearly all stock pickers are playing a game of chance
• Cardano — if you want to improve your odds, understand probabilities; if you want a sure thing, rig the deck
• no such thing as a sure thing — ever
• you need a way of testing your thought process in poker — sometimes the only way to do that is by failing
• benefit of failure is an objectivity that success simply can’t offer
• thinking — the process
• disaster can be your teacher — disaster that brings objectivity
• if we lose early, we have a shot at objectivity — when we win at the start, that’s when we see the illusion of control playing out in full swing
• “less certainty, more inquiry”
• question more, stay open-minded
• object of poker is making good decisions
• 10,000 hour rule — not quite, it’s really not precise, but a very large number that is comparable across individuals and activities
• some people achieve much larger gains with much less investment than others who study far longer and work much harder
• chess is a “kind” learning environment — immediate feedback (10,000 hour rule that Gladwell wrote about was based on Chess)
• most real world environments are “wicked” — mismatch between action and feedback because of external noise
• while practice is not enough and there’s not even close to a magic number for its effectiveness, you also cannot learn if you don’t practice
• each time you act, you have to reassess based on what is now known vs. what was known before
• position is information, and the more information you have about your enemies, the stronger you are
• a good commander never cares what others are thinking — perception matters only insofar as you’re using it strategically to shape your image for future actions
• dragonfly — captures 95 percent of targeted prey — sees what prey is doing, but because it can also predict what it will do and plan it’s response accordingly
• no one size fits all in poker
• doesn’t pay to be an agressive female in poker
• women, but not men, are penalized for asking for more money in a negotiation
• hot hand in basketball is an illusion
• we think small samples should mirror large ones, but they don’t, really
• best games are the ones that challenge our misperceptions
• if you want to be good at cards, you have to acknowledge that you are not “due” for a good hand, or whatever else — each outcome is completely independent of the past
• locus of control
• typically, an internal locus will lead to greater success — people who think they control events are mentally healthier and tend to take more control over their fate, so to speak
• as in the case of probabilities, an external locus is the correct response, — nothing you do matters to the deck
• memories change over time, but the more emotional the landscape, the less we’re able to engage them with any specificity
• playing well relative to everyone else — chance can be a bitch!
• car crashes happen most frequently near our home because of base rates, i.e. you drive more frequently there, and also because of comfort — if you’re going on autopilot and texting anywhere, it’s the places that are most familiar
• true skill is knowing your own limits — and the power of variance in the immediate future
• the language we use becomes our mental habits — and our mental habits determine how we learn, how we grow, what we become
• if you think of yourself instead as an almost victor who thought correctly and did everything possible but was foiled by crap variance? luck amplifier — happier and more adjusted while you take life’s blows, and your ready mindset will prepare you for the change in variance that will come at some point, even if that point is far in the future
• everything is in how you perceive it
• the most we can do is make the best decision possible with the information we have — outcome doesn’t matter
• no unspoken wall of what you are or aren’t supposed to do, say or be
• all you have to do is play poker well — if your skill is good enough that you’ve earned the right to play, welcome
• what america hopes to be, but never, not in any other profession, actually is
• overconfidence in your opinion comes from thinking you know more than you do simply because you have more information available to you, can be a dangerous thing
• paying attention is one of the best ways to minimize the window for negative variance to peek through
• if you’re not observing well, observing closely to begin with, no amount of preparation is enough
• you’re not lucky because more good things are actually happening; you’re lucky because you’re alert to them when they do
• we can control our attention and how we choose to deploy it
• losing is essential to learning how to win — attitude towards loss is a very different one
• omission neglect — pay more attention to the “barks” but not to the moments when they are absent: we ignore what is omitted
• identifying motivation is key if the author was going to become more than a competent player
• don’t forget the why! a detective, a storyteller
• you need experience to balance out the descriptions
• Dunning-Kruger effect: more incompetent you are, less you’re aware of your incompetence
• people fail to account for the outsize role chance plays in the events around them
• humans always get in the way of the mathematical model
• wanting the cash isn’t the same thing as wanting the win
• important to focus on the larger picture, remain aware of how much you have to accomplish
• too often, we settle for the minor tokens that mark our accomplishment — participation trophy rather than that podium finish
• let them make us feel that just fine is good enough — sometimes, maybe it is, but sometimes not
• we look at a person and sometimes immediately a certain impression of his character forms in us
• in as little as thirty four milliseconds, less time it takes to blink, we have already formed judgements on things like trustworthiness and aggression — subconscious
• predictive processing: actively think one step ahead and look at the environment accordingly — our brains are more proactive than reactive
• when we make thin slice judgements of people, term for the fleeting perceptions our brain creates, our inputs are often mistaken
• thin slice judgements are intuitive, as with all things statistical, they break down in accuracy at the level of the individual
• looking and seeming trustworthy is a far cry from actually being trustworthy
• if someone gives us our actual thought process, we dismiss it in favor of the version we’ve constructed for ourselves
• more often than not, we aren’t motivated to correct our mistaken reads — we operate instead by an inflated sense of our own power of person perception
• the better the deceiver, the worse we are at spotting the deception
• sometimes, looking at hands or bodies is better then looking at faces
• repeatable patterns and behaviors, taken as a whole (tells) — tells aren’t always a perfect correlation
• “poker face” is a silly term — even at the basic level, players know they are supposed to conceal information
• if you spend all your time staring down your opponent, the best you’re likely to achieve is to make everyone around you uncomfortable
• huge information comes from hand gestures
• streamlined decisions — no immediate actions, or reactions, a standard process
• people aren’t a combination of traits — they are a mosaic of reactions to and interactions with situations
• who you are comes out at the poker table — your baggage, your experience, your confidence, stereotypes you hold
• first person you have to profile — psychologically — is yourself
• planning fallacy — we tend to be overly optimistic when we map out timelines, goals, targets and other horizons
• we look at the best case scenarios instead of using the past to determine what a more realistic scenario would look like
• sunk cost — keep your course because of the resources you’ve already invested
• sometimes its the hands you don’t play that win you the title
• the art of letting go can be a strong one
• people will often actively avoid information that would help them make a more informed decision when their intuition, or inner preference, is already decided
• in the right context, emotions can be powerful drivers of correct choice — the emotion just needs to be integral to the decision, rather than incidental to it
• identify our emotions, analyze their cause, and if they’re not actually part of our rational decision process, dismiss them as sources of information
• incidental events affect decisions they shouldn’t actually influence, simply because they affect how we’re feeling
• tell people what’s going on and they can overcome it
• need to learn to anticipate how something will make you feel in the future and act accordingly in the present
• embodied cognition: embody the feeling you want to express, and your mind and body will often fall into alignment
• fasting (food) has been shown to affect our delay discounting ability: we start to prefer smaller rewards sooner rather than waiting for larger rewards later — more impulsive decisions
• nocebo effect: believe in evil signs or bad luck
• belief is a powerful thing — our mental state is crucial to our performance
• superstitions are false attributions, so they give you a false sense of your own abilities and in the end, impede learning
• we can recognize something is wrong and irrational, but then consciously and purposefully choose to let the false belief stand rather than correct it
• streaks that require actual human performance may indeed exist (winning streaks)
• Taleb: ludic fallacy — games are too simplified, life has all sorts of things it can throw at you to make your careful calculations useless
• life happens, and through it all, we play
• you can’t control what will happen, so it makes no sense to try and guess at it
• chance is just chance — it is neither good nor bad nor personal
• all we can do is learn to control what we can, our thinking, our decision process, our reactions
• Epictetus: things in our control are opinion, pursuit, desire, aversion, and, in a word, whatever are our own actions. things not in our control are body, property, reputation, command, and, in one word, whatever are not our own actions.”
• attempting to analyze the unknown as best we can wit hate tools of rationality — powerful steps we can take
• should chance go against us, all our skill can do is mitigate the damage
• skill can never be enough