Deciphering good decisions from bad outcomes

We’ve all lived with the regret of a decision we’ve made. But how do you know whether you actually made the right decision and stick by your guns?

If you want to build a life that is fulfilling and learn to become yourself fully, chances are that you’ll need to make a few decisions that other people might not agree with.

Investing in SOL? Dating a guy that doesn’t impress your friends but is still a gem? Taking a risk on switching industries in your career?

A lot of articles out there will say, “just do it! Do you boo! Ignore the haters!”

But what happens when the price of SOL plummets by 30%? Or that guy dumps you? Or you get let go from that job?

Did you make the wrong decision, or did you just get a bad outcome?

What’s the difference? You have no job! Clearly you made the wrong decision, your annoying aunt will say.

W-R-O-N-G.

Resulting

Poker players are professional decision makers. They viscerally understand the cost of making wrong decisions that costs them hundreds of thousands of dollars in prize money.

And they have a word to describe the fallacy of equating the quality of a decision with the quality of its outcome: resulting.

Think in probabilities

So how can we prevent resulting?

For starters, in our messy world, being right or wrong isn’t a binary set of options. It’s actually more like a gradient of probabilities.

Let’s say that you have a big argument with the person you’re currently seeing, and there’s a 60% chance that things work out and a 40% chance that things don’t.

After considering how much this person means to you, their efforts to change and communicate, let’s say that you ultimately choose to stay with that person and try to work things out.

6 months later, you break up.

Did you make the wrong decision?

It depends on your decision making process and the information you had available to you at the time. Statistically speaking, you chose an outcome that had better odds, but an outcome that happens 40% of the time will still happen pretty often.

Redefining confidence

Annie Duke, author of Thinking in Bets (an amazing book on decision making) and a World Series poker player who’s won more than $4 million in poker tournaments, suggests that we use probabilistic thinking to quantify our uncertainty and use it to our advantage.

If you want to switch careers, figure out how unsure you are, and put a number to it.

“I think becoming a designer in the web3 space sets me up for future growth opportunities but I’m only 60% sure about that.”

When we make these kind of statements, it begs the question — what information would help you increase your confidence level?

Assigning a p-value to our thoughts helps us acknowledge our uncertainty, measure it, and update it.

When you learn new information, your response becomes “I was 60% but now I’m 50%” rather than flipping back and forth from a binary “I was sure but not I’m not sure.”

Decipher luck from skill

And lastly, to prevent equating the quality of a decision with the quality of an outcome, we must be able to determine whether the outcome was a result of luck or skill.

Did this desired outcome happen because of the actions I took, or was I just lucky? Did this undesired outcome happen because of the actions I took, or was I just unlucky?

If you drive home while drunk and get home safely, was that because of luck or skill?

If you misattributed this good outcome with a good decision, you’d decide that you should drive drunk next time.

tl;dr

In order to live up to our potential, it means crafting a life where we’re a bit different than the norm.

Building a fulfilling and “non-consensus” life is fraught with nuanced situations with no clear answers, and that can make it tricky to understand when the decisions we made were the right ones.

How do you know if everyone around you is right and you’re wrong, or if you’re actually right and everyone else is wrong?

You need to get good at having your own barometer of when to listen to what others say and when to ignore it.

Thanks for reading and I hope this newsletter was useful to you in some small way. These are questions that I’ve worked through personally, and I’m hoping that it’ll help someone else out there too.

Putting out my writing into the universe and having people read it has been extraordinarily cool and full of learning.

If you’re here, you’re a Day One homie. Chat with me on Twitter or Threads.

Until next time,

🤘