Poker World Champion Annie Duke On Choosing the Truth

On today’s podcast, Ryan talks to World Series of Poker champion Annie Duke about making ethical choices, the overlap between Stoicism and cognitive psychology, how to objectively assess your own decisions, and more. Annie Duke is a former professional poker player and a bestselling author. She is an expert in cognitive psychology and co-founded the non-profit Ante Up for Africa in 2007 to benefit charities working in African nations. Her recent book, How To Decide, details how to be a more confident decision-maker. This episode is brought to you by Beekeeper’s Naturals, the company that’s reinventing your medicine with clean, effective products that actually work. Beekeepers Naturals has great products like Propolis Spray and B. LXR. As a listener of the Daily Stoic Podcast you can receive 15% off your first order. Just go to beekeepersnaturals.com/STOIC or use code STOIC at checkout to claim this deal. This episode is also brought to you by Trends. Trends is the ultimate online community for entrepreneurs and business aficionados who want to know the latest news about business trends and analysis. It features articles from the most knowledgeable people, interviews with movers and shakers, and a private community of like-minded people with whom you can discuss the latest insights from Trends. Just visit trends.co/stoic to start your $1 seven day trial. This episode is also brought to you by The School of Greatness podcast. Hosted by Lewis Howes it features interviews from athletes like Kobe Bryant and Novak Djokovic, influencers like Brene Brown and Tony Robbins, authors like Robert Greene and Tim Ferriss, and more. Subscribe to The School of Greatness on Apple Podcasts, Spotify, or visit lewishowes.com/podcast. This episode is brought to you by Scribd, the e-book and audiobook subscription service that includes one million titles. Scribd uses the latest technology with the smartest people to recommend you content that you’re going to love. We’re offering listeners of The Daily Stoic a free 60 day trial. Go to try.scribd.com/stoic for your free trial. That’s try.scribd.com/stoic to get 60 days of Scribd for free.***If you enjoyed this week’s podcast, we’d love for you to leave a review on Apple Podcasts. It helps with our visibility, and the more people listen to the podcast, the more we can invest into it and make it even better. Sign up for the Daily Stoic email: http://DailyStoic.com/signupFollow @DailyStoic:Twitter: https://twitter.com/dailystoicInstagram: https://www.instagram.com/dailystoic/Facebook: http://facebook.com/dailystoicYouTube: https://www.youtube.com/dailystoicFollow Annie Duke:Homepage: https://www.annieduke.com/ Twitter: https://twitter.com/annieduke YouTube: https://www.youtube.com/channel/UClDhEz5b55RH1ZfEZd7Y3hA See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info. 📢 Share | ⚙️ Manage Subscription

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Ryan Holiday?

  Welcome to the weekend edition of the Daily Stoic. Each weekday, we bring you a meditation inspired by the ancient Stoics, something that can help you live up to those four Stoic virtues of courage, justice, wisdom, and temperance. And here on the weekend, we take a deeper dive into those same topics. We interview Stoic philosophers. We reflect. We prepare. We think deeply about the challenging issues of our time. And we work through this philosophy in a way that's more possible here when we're not rushing to work or to get the kids to school, when we have the time to think, to go for a walk,

• 0:44Ryan Holiday?

  to sit with our journals, and to prepare for what the future will bring. Hey, it's Ryan Holiday. Welcome to another episode of the Daily Stoic Podcast. I was really excited about today's conversation. And I know my guest was to, I think we talked like for 15 minutes before I hit record. We just got way into it, which is always a good sign with a guest. And I've had a couple of long dinner conversations with Annie Duke before. So I knew this was going to be a good one. Annie is also an author at my publisher, Portfolio, an imprint of Penguin Random House. I loved her first book, Thinking in Bets.

• 1:27Ryan Holiday?

  Her most recent book, How to Decide, is another awesome one. She's a bestselling author, but if that weren't enough, as a former professional poker player, she's won more than $4 million in tournament winnings. And she's also an expert in cognitive psychology. So someone who has a lot to teach us about the sort of rationality elements of Stoicism. But I think you'll be surprised at the ethical side of things that we get into as well. The Stoics would say, you know, the ability to make good decisions in the abstract is worthless, right? Stoicism isn't about making you a better sociopath. It's about helping you get better at making the right decisions. It's about helping you be more rational and clear-headed and more consistent at doing the right thing.

• 2:13Ryan Holiday?

  So professionally, that might be for someone like Annie, making the right decisions at the card table. But you'll see her talk over and over again about the importance of making the right decisions as a member of a community, as a parent, as a citizen, as a human being in the world. We get way into that stuff. She was telling me that she hears from Stoicism fans all the time. She thinks there's a big overlap between our works. I just loved this conversation. I can't wait to share it with you. You're gonna like this. You can check out Annie's books, How to Decide, Simple Tools for Making Better Choices, and of course, Thinking in Vets, Making Smarter Decisions When You

• 2:55Ryan Holiday?

  Don't Have All the Facts. And you can follow Annie at @AnnieDuke, A-N-N-I-E-D-U-K-E, Annie Duke. And of course, you can follow her on her website, annieduke.com. Thanks, Annie, for coming on. And she told me about her next book, which I'm really excited about, so she will be on here again very soon.

• 3:18Ryan Holiday?

  Okay, so I wanted to run something by you where I think your work and Stoicism connects. There's this line from Epictetus where he says, the moment you become a philosopher is when you possess the ability to think about your own thoughts, right? To be able to step back and analyze yourself from a distance. And it seems like that's the through line between your last two books, the ability to think about what you think and how to do it better.

• 3:52Speaker 01

  Yeah, so I'm actually, it's funny, because I have a lot of people who read my work actually relate it to your work and ask me if I've read your work. Because I do think that there's an element of that in two ways. One is this real need to be able to entertain the idea that your beliefs are wrong, that you might hold false beliefs. And I think that's actually quite difficult. And then the other is what you just pointed out, this ability to step back from your own thinking and view it from the outside. I think that's, it's super hard to do. It's particularly hard to do when you're in the moment. So it's something that I think about a lot, about how we can actually get better at that

• 4:34Speaker 01

  exercise of being able to step outside ourselves and examine our own thoughts and our own beliefs as if they're, like, if they're, as if they're an object that we're holding in our hands.

• 4:44Ryan Holiday?

  It's kind of a contradiction because on the one hand, we have to sort of be very aware that we have, you know, biased or incorrect thoughts. And on the other hand, there's this sort of trust one has to develop in oneself. And you would think those are in direct conflict with each other, but, but maybe they're not.

• 5:09Speaker 01

  Yeah, so actually, I think that one can't live without the other. So i- in this sense, that in order to be a really good decision maker, in order to, and I'm talking about real trust in yourself, like trusting that you're actually trying to find the truth as opposed to just, just some kind of certitude that you have the truth, which I consider sort of a different category, right? Is that it's this total acceptance that we're all deciding under uncertainty for two reasons. One is that we, we can't foresee the future. I'm not psychic. So the world is going to change. It's, the world is stochastic and, and things change.

• 5:54Speaker 01

  And so I have to sort of recognize that what is true tomorrow may not, you know, today may not be what's true tomorrow. And then the other problem is that we decide behind a partial veil of ignorance, at minimum, sometimes completely behind the veil of ignorance. So there's only a certain, we, we don't know everything there is to know again, because I'm not omniscient. So I'm neither psychic nor omniscient. Sadly, I would like to be, but I'm not. So we are truth discoverers. Now, what's interesting is some people sort of hear that and they think, well, then how am I supposed to ever make a decision? But this is where we have to get to this kind of viewing ourselves from the outside and say, at any moment in time when we're deciding, we have to trust that we have a

• 6:36Speaker 01

  good process that makes the best decision, given the things that we know at the time. But even though we can be quite decisive in the moment that this is the best decision for us in this moment, that's where we have to step back and say, but I'm still going to hold those beliefs loosely because I have to be able to see when the world is changing. I have to be able to see when I get new information and I have to be able to see when I should want to change my mind and redirect my course. And that's how you can have total trust in in your decision making capabilities because you're you're seeing it clearly for what it is.

• 7:11Ryan Holiday?

  Yeah, you, part of why you're able to trust yourself is you know that you have or regularly do ask yourself the tough question. So people kind of go like, well, couldn't this be a huge mistake? And and I think you have to honestly be able to go, yes.

• 7:28Speaker 01

  Yeah.

• 7:28Ryan Holiday?

  And I've thought about that a lot.

• 7:31Speaker 01

  Right, yeah, I mean, I've thought about that a lot. I have trusted advisors. There's a lot of help in thinking about that in advance. Um, you know, so so one thing is that people from the outside will see you more clearly than you see yourself. So it's really helpful to make sure that you're you're thinking about what's true of the world, independent of your own perspective. That's going to help you spot mistakes in the moment. But then also you can act as your own advisor because what's really, what I think is really interesting is that you are different versions of you and and more or less endowed to your own beliefs at different times in your life. So when I'm in the middle of a decision, I'm going to be quite endowed to my beliefs.

• 8:15Speaker 01

  I'm gonna, I'm gonna be holding on to those like extremely tightly and I'm gonna have some inflexibility around the things that I believe in the course of action that I'm already on. What's interesting, and I think that people can feel this, is that if I think about my beliefs when I was 20 and the course of action that I might have been on when I was 20, I do not hold those as tight and I'm much more willing to look at that person and say, no, here are the things that I think that person sort of had right, but here's the Just incredibly long list of things that I think that that person had wrong. And I can actually do some counterfactual thinking. If I could go back to when I was 20, here are the things that I would do differently. But if you ask someone to say that about this moment in time, what are the beliefs that you hold right now that you believe might not be true? They're quite poor at that.

• 9:00Speaker 01

  And when you ask them to sort of say, what are, you know, what are the courses of action that you're currently on or engaging in that that you think that you should change course on? They have trouble answering that. So then the question is, how can we sort of harness that difference between like you today and you 20 years ago? And help that to get a better view of ourselves that doesn't require an outside observer? And that's doing some time traveling of ourselves and saying, imagine it's a year from now. And you find out that some belief that you had was mistaken or some course of action that you're on didn't work out. Why do you think that might be? And it allows you to sort of loosen up your hold on the things that you believe that can get you to sort of a better place.

• 9:42Ryan Holiday?

  And do you find like really good decision makers, whether they're chess players or poker players or politicians or whatever? It can seem like they're trusting themselves. But really that trust is, is that over the years that there, it's like there actually is quite a lot of computation going along. But it becomes like their trust is earned. So that if it might appear to be a gut decision, but actually a whole sort of set of processes has occurred. And they're able to trust their gut because they know, I know that I'm getting mixing my metaphors a little bit, but like their gut decision was really a decision that ran through a really great mental model.

• 10:26Ryan Holiday?

  They just sort of feel it at almost an intuitive level at this point.

• 10:30Speaker 01

  Yeah, so that's a really interesting question. There, there's a quote that I just posted from.

• 10:36Speaker 01

  Obama that actually was sent out in Shane Parrish's newsletter last weekend, which is just on this, where he sort of talks about what people's sort of view is gut is actually probabilistic thinking, which I think is what you're getting at, right?

• 10:51Ryan Holiday?

  Yeah.

• 10:51Speaker 01

  So, so there's a set of calculations and then also an understanding that you can't get to 100% certainty, particularly in the types of things that he was deciding. What, what he's pointing out is that if, if the decision got to him, what it meant was that somebody else couldn't handle it. So it therefore had to be a difficult decision where you weren't going to be able to get to any kind of certainty. So he had to understand that he had to be doing these sort of probabilistic calculations and then do, make the best decision he could, given the information that he had at the time, which from the outside might sort of look like gut, but it's actually quite a complicated decision process that's going on. So what, what I would say is this is that really good decision makers generally understand

• 11:37Speaker 01

  what a really good process is. And that process is going to involve this kind of probabilistic thinking. I mean, you know, the famous example of that would be Jeff Bezos saying he wants people to only have to be 70% sure before they go and 90% would be too much, right? That you're going to be going too slowly. So that's like a good example of that. So, so what, a lot of times what happens is that people sort of say then, well, I should be going with my gut, but that's actually not what you're doing. You're saying, I'm going to have some sort of probabilistic process. It's going to be something that I can take out and examine. So when I say that things are going to occur 70% of the time, I'd like to know that over time, that's actually, those types of things are actually occurring at that rate so that I can kind of close the loop.

• 12:21Speaker 01

  So it's not so much that your gut might not be correct a lot of the time. It's that the process that you've practiced over and over again that's informing those those gut decisions needs to have been robust at some point so that you understand how to think probabilistically and then you should be willing to make the assumptions that that are are being made by your gut decision explicit in a way that you could then go back and examine them because otherwise what can happen is that you make gut decisions and kind of whether they work out well or not you come up with some reason why the gut decision was really good because it's really easy not to hold a gut decision accountable. So when you look

• 13:02Speaker 01

  at like the the the passage from Obama, it's clear that what he's doing you would be held accountable to because because he's making those probabilistic forecasts like quite explicit when he's talking about it and that's what allows you to go back and look at what was my thesis, what did I believe was going to be true of the world that led me to this decision. So it that doesn't mean that it has to be slow. It just means that you have to be able to go back and examine it.

• 13:29Ryan Holiday?

  I think you're the what strikes me about the Obama quote, I think I think it's from Dean Aikerson, the the Secretary of State. He was saying that because he he watched sort of George Marshall and he watched Truman, who whom he served both both served directly. And he was saying that the problem with being a president, I think this is true for all leaders, is that basically no, you you never get to make good decisions as president because all the obvious easy decisions have been done for you by the and and this isn't like the a flaw of the system. It's like if you have a good hierarchy, then you've you have chosen competent people who can make the obvious decisions and whom you have communicated

• 14:13Ryan Holiday?

  what your desires are. So they're able to execute when it's clear. So when it does get to the president, or it gets to the CEO, or it gets to the parents, right, was it some school issue or something, there is no easy, clear answer, or it would have not even come to you. And I think people struggle with these, I don't want to call them no win choices, but they struggle with choices that are like, it's not even choices, they're dilemmas. They people struggle with dilemmas.

• 14:45Speaker 01

  Yeah, so I I think that, you know, it's quite funny. So when you get into a dilemma,

• 14:53Speaker 01

  There's two ways to be in a dilemma.

• 14:57Speaker 01

  One way is that your standard for being willing to decide is too high. So this is the Jeff Bezos problem. So if you believe that you need to get to ninety percent certain in order to decide, you're going to be in a lot of dilemmas.

• 15:13Ryan Holiday?

  Mm-hmm.

• 15:13Speaker 01

  So the fact is that, like, let's say that you're weighing two options and one option is good, you think, you estimate is going to work out seventy percent of the time and the other option is going to work out thirty percent of the time. That's actually not a dilemma, that's quite a clear decision. So the issue for a lot of people is that they aren't willing to decide on something that's only seventy percent. So they'll go and try to, um, you know, gather more and more data trying to create more and more certainty around the decision, even when it wouldn't change the relative pricing of the two options.

• 15:49Ryan Holiday?

  Right.

• 15:49Speaker 01

  Right, like, the one option is clearly better. So we're not thinking about which relative is, you know, given that I have constraints on my time and whatnot, which option is relatively better? And in this purchase, it would be clear, we're actually holding it to some absolute um, standard against certainty. And you can see these kinds of things happen, for example, in, um, when people like persist in endeavors too long. Why are they doing that? Well, because they need the world to give them certainty that it's right to actually quit. Because if you don't have that certainty, then I have to sort of live in this regret of what could I have been. Uh, but if it's clear that I'm, I'm failing, then I'm willing to actually quit because sort of I've already failed, like, it's already a hundred percent, right?

• 16:33Speaker 01

  So you can see this kind of need for certainty in a lot of places. So that's one kind of dilemma. And what I would say to people who are in that kind of dilemma is you have to think about the options that you have relative to each other. You shouldn't think about an option relative to whether you're certain about it because then you're going to be in too many dilemmas. So that's one type. The other type of dilemma that people have, um, and this is quite common, uh, is they'll think that a choice is really hard because the two options are very close to each other. So thi- this is, um, these kind types of decisions I actually call a sheep in wolf's clothing, just to kind of turn that

• 17:10Ryan Holiday?

  Yeah.

• 17:10Speaker 01

  red riding hood on its head. So, so let, let, I'll give you, I'll give you an example. Like, let's say that you're trying to decide between taking two jobs. And you really like, you really can't make a decision between the two of them. Like, they just seem like so close to each other. People will really get caught up in like horrible analysis paralysis, trying to figure out which is the right job for them. But here's kind of the secret to this is that the whole reason why that feels so hard is because if you were to think about, given the information that you have, what's the expected value? How would I expect those two jobs to turn out? Or how, what do I think the probability is that I'm going to be happy or fulfilled in those two jobs? It's hard because they're identical.

• 17:56Speaker 01

  Because given the information that you have, which doesn't involve a time machine and seeing how you actually like being in that job. And there isn't anything that distinguishes them from each other. So then what happens is that we spend a whole bunch of time trying to try to parse that apart. Which is, has two problems. Right, one, one is that you can't. Because you don't have the information to be able to do it. You just don't have like the cognitive acuity to be able to figure out what the difference between those two opportunities might be. Whether it's two jobs or, you know, in the olden days before COVID, like going to Paris or Rome. Or even like choosing between the chicken and the fish on a, on a menu where we know people will sometimes take like 15 minutes with that decision. The problem is they're identical choices as far as your cognitive acuity is.

• 18:39Speaker 01

  At which point, honestly, you should flip a coin and relieve yourself of the dilemma. So those are sort of, you know, what's interesting is that for most things, it's kind of a false dilemma. That we create the dilemma for ourselves by not seeing the decision through the right frame.

• 18:57Ryan Holiday?

  Sure. And, and, and what I mean sort of by hard decisions also is like, and I think the, the last year has been a great example of this with the pandemic, where suddenly the stakes are much higher than like the ordinary decisions, right? Like, if we're bad at decisions between like chicken or fish, as you said, how do you choose between like sending your kid to school and not sending your kid to school? It's like there's like sort of either way, there's real costs and quite a bit of uncertainty. And I think it's been fascinating to watch. And horrifying to watch, of course, but but just how bad people are at making decisions and people and I'm not talking like society, I'm just saying like, I think all of us have friends

• 19:42Ryan Holiday?

  and you're like, wow, this is a person who went to Harvard, this is a person who picks stocks for a living. You know, this is a person who's, you know, holds public office. And then you sort of look at their decisions and then you talk to them about their decisions. And you're like, this person not only doesn't know what they're doing, but their reasons and their choices are in direct conflict with each other. You just realize like how difficult it is for people to be rational and to be clear and to be consistent with their choices because life is complicated, people are busy. And as we started off, we have so many biases and sort of emotional forces that confuse us.

• 20:21Speaker 01

  Yeah, so it's interesting, like, one of the things, so the bias blind spot is quite a robust phenomenon. And that's basically that we don't see our own bias very well, we see it very well in other people. And so I think one of the lessons from what you said is to recognize that if you're seeing that in other people, you should be very suspicious of your own decision making.

• 20:43Ryan Holiday?

  Correct.

• 20:45Speaker 01

  Which we tend not to be, right? So we spend a lot of time talking about other people's bad, and I'm not saying you were doing this. I'm saying in general, this is like, people talk about other people's bad decision making, but then they don't think that that might be occurring for them as well. So that's something, and by the way, I do that all the time, too. Like, I'm like, oh, that person's an idiot, I'm so smart. So.

• 21:06Ryan Holiday?

  And that's what my wife and I have spent a lot of time talking about. We're like, you know, you're talking to someone and it's like, it's obvious what they're doing is insane. Or it's, and then you have to stop and go, and I'm sure they are having the exact same conversation with their spouse about us at this very moment.

• 21:21Speaker 01

  Right, exactly. And by the way, like, this is something in COVID that you see a lot, like, people who are being very, very risk averse versus people who are not being risk averse. And it's almost like a tribal fight.

• 21:34Ryan Holiday?

  Right.

• 21:34Speaker 01

  Like, you're an idiot, no, you're an idiot, you know, like, okay.

• 21:39Speaker 01

  Well, okay, I I can give you my reasons for why I I don't leave my house and I'm happy to do that, right? So, yeah, so I think that this this is an issue is that um we need to recognize really how much bias is driving our decision making and I think that one of the best frameworks for thinking about that comes from Kahneman and it's the inside and outside view. I actually have a whole chapter on that in how to decide. And what we need to recognize is that, you know, when we're making decisions and this comes from gut decision making, uh, it it would be, you know, that you that you don't allow to be examined. So this would be when you're just like one of these like I can look founders in my eyes and in the eyes and don't question me, you know, which is that hopefully you don't think that way. But um, so when we think about um

• 22:24Speaker 01

  our decision making, the inside view is the world kind of driven by our own beliefs and our own mental models and the mental models that we tend to apply to problems. Uh, the information that we have, we tend to cherry pick the information and that's really where the cognitive bias lives. So we can think about like, for example, like the way that we reason about information is motivated to reinforce the beliefs that we already have. So that's going to be an inside view problem because those are my beliefs that I'm trying to reinforce. So I'm going to notice information that confirms my beliefs. When I see information that disconfirms my beliefs, I'm going to find, I'm going to pretty much write a dissertation on why I should reject it.

• 23:04Speaker 01

  Um, and we tend to be very good at that type of process. Confirmation bias, uh, sorry, overconfidence obviously would be an inside view problem like I can go through the like illusion of control uh, that we can control our futures much more than we actually can. That's obviously an inside view problem. Um, so, so what we want to do is try to find ways to get to what Kahneman would call the outside view, which is uh, what's true of the world in general. So like, it doesn't matter if I think the earth is a trapezoid, it's round regardless of what Right. I think. Um. But also the way that other people would view the situation that we're in. So two people can be looking at the same set of facts and they can come to different conclusions about it.

• 23:45Speaker 01

  People could actually look at the same set of facts, apply the same, say, model to it, where that then gives you an answer like the chances of success are 70%. And the two people would still come to different conclusions about what you're supposed to do with that information, right? So it's helpful because other people have different facts. Other people have different ways of viewing the world. To allow your view to collide with the people who hold a different view than you do. And that can help us start to discipline some of these biases that we have. And what's interesting is like, and this is a lot of the work that I do with companies,

• 24:26Speaker 01

  is that the way that companies are set up is actually not to take advantage of the fact that you have lots and lots of different people on a team and hopefully a lot of cognitive diversity. And a lot of people who have different mental models and different perspectives and different ideas, that you've assembled this team where hopefully that's the way that the team thinks. But you don't actually have systems in place that allows all of those perspectives to be surfaced. Instead, they're all meeting in a room, doing all the information discovery in a room, influencing each other, becoming, you know, tribal and follow creative group think and bandwagoning and things like that. So that they just become like one big expression of the inside view.

• 25:07Speaker 01

  So this is happening not just in our personal lives, where we sort of get into these kind of echo chambers, but the way that a general like decision process in a corporation goes is also amplifying the inside view as well, which is where a lot of our problems are coming from.

• 25:23Ryan Holiday?

  Got a quick message from one of our sponsors and then we'll get right back to the show. Stay tuned.

• 25:30Ryan Holiday?

  Yeah, that's been helpful for me during COVID is sort of stepping, stepping back and thinking like, "Okay, what are my kids gonna think about this decision in 10 years?"

• 25:41Speaker 01

  Yeah.

• 25:42Ryan Holiday?

  Or in 20 years. And sometimes you'll see like crazy people say stuff on the internet like, "In retrospect, we're all gonna look back at this and think we way overreacted." And it's like, that's just, if you have any sense of history, we're not gonna look back and,

• 25:55Speaker 01

  Yeah.

• 25:56Ryan Holiday?

  And see a thing that killed as many people as the Second World War by the time we're done. And as an overreaction, that's just not, not how it's gonna go. But, but I think about these decisions, you know, were we making this decision because we were afraid? Were we making this decision because we were thinking of expediency? Or were we, were we thinking of this decision as, as to sort of what is going to be true and appear to be true when the dust has settled? And I think you, you, you watch a lot of people make sort of decisions that, you know, "I'm just, I'm just done." And it's like, the facts don't care if you're done, right? Or like, like the fact that you're tired or that you've been really good up until this point.

• 26:38Ryan Holiday?

  You know, like you, you watch a lot of factors pop into people's thinking that has nothing to do with the underlying calculus that they have to be making. You know, like, uh, the fact that you've been, like, this is the sunk cost fallacy. The fact that you've been in lockdown, let's say for 10 months, does not make what you do, does not have any input on whether, on what is a good decision tomorrow. Right? It's only the facts that are true when you wake up tomorrow morning that should be incorporated into that decision.

• 27:10Speaker 01

  Yeah. So, yeah, I've been thinking about sunk cost fallacy and like escalation traps, like escalation of commitment and that kind of thing, uh, quite a bit recently, actually, for the, for the next book that I'm writing. Um, you know, and, and I think that's true. It's like, that's a big problem. And then the other one, which you touched on is your time horizon. Right? So this is kind of like the, the little kid in the target problem. Right? Like when you're in target with your two-year-old and they're screaming for the toy. Right? Are you giving them the toy now just to be quiet? So you could not be in that kind of pain, right? Or are you thinking about, is this gonna be good for my child when they're 10? And I think that a lot of times we come, we come down on the side of I just don't want

• 27:54Speaker 01

  to be in pain right now, right? And I think you pointed this out when you said like, what is my child going to think of this decision in 10 years? Um, yeah, okay. So like they're sad because they're not in school or they're sad because you're not letting them go over to a friend's house and play, right? But in 10 years, how are they going to look back on that decision? Are they going to be, are they going to be pissed at you that you didn't let them go play? I mean, I think this is a really good answer. And, and when we think about sort of where we started with that idea of like, the way that I view myself when I, I was 20, right? It's like, is like so different than how can you sort of get out of the moment? And what you just talked about is a way to get out of the moment, right?

• 28:33Speaker 01

  To become your own advisor, to become your own outside, um, you know, advisor to help you to get to more rational decisions and to say, how am I going to think about this in 10 years? Or how will my child view this in 10 years? So allow you to get out of that. I just don't want to be in pain right now. I just don't want my sad, my child to be sad today, right? Or I don't want to be sad today.

• 28:58Ryan Holiday?

  When, when I was thinking about dropping out of college, I, I had this sort of mentor who I was going to go work for. And, and I remember, uh, I was like, you know, what if it doesn't work out? What if it, what if it blows up my face and I have to go back to school and then I'm behind? And he said, he's like, when I was like a junior in college, he's like, I got really sick with something and I spent a year in the hospital. And I was like, wow. And he's like, do you know how that has affected my life ever since? It is like, not at all. It's literally never come up. Nobody cares that I graduated college when I was 22 instead of 21. Uh, you know, it did, it didn't affect me in any way other than I spent a year in the hospital and that was hard and I had to do that. Um, and that

• 29:38Ryan Holiday?

  was, that's, that's really helped my time horizon, not just then, uh, but even in something like COVID or even something like, like I think about this, it's like you're in an argument with your spouse and like, things have been rough around your house for a month. And you're like, okay, but if we're going to be married, I ostensibly forever, who cares if this is a rough month, you know? I think a lot of times you get so caught up in the urgency of it. And I think people have really struggled during the pandemic. They're like, you know, my, my kid can't miss out on school for this long or, you know, can't, what about socialization and blah, blah, blah. It's like, you know, if you had, if you were taking a sailing trip around the world, some amazing opportunity. You would be, this is so great for my kid. You wouldn't be thinking like, but they're not on the slide with their friends.

• 30:23Ryan Holiday?

  Like, I try to sometimes think about other alternatives that takes the same set of facts, but reframes them. And I see how I would not be upset then, and I would not be worried then, and I would not be taking it so seriously then. And then I go, oh, okay. So, so really, this is kind of a free period. I don't need to sweat this thing at all. And that, that's been helpful for me, like 10 months, like, uh, you know, you could, I could take a 10, a 10-month vacation, and I think that this, that 2020 was the best year of my life. And, and sometimes I've, I've found that by reframing the decision in a different perspective, it totally turns down the volume on how seriously I have to take it.

• 31:04Speaker 01

  So I haven't, so I think that's amazing. Like, that's such a great way to get to the outside view on your own. Is to think that the one, so I've, I've, I've tended to use my, you know, a lot of time traveling strategies. So like, when, when my kids are pissed that I grounded them, I'll say, this is gonna be so great for you when you're at the Thanksgiving table, when you're 40. You're gonna be so excited to be telling this story. Right? And that usually calms them down. I've done, I've thought about situational travel just in terms of, if I were advising somebody else, what, you know, how would I advise them? And that's been helpful. But I haven't done what you just said, which I think is a whole, another great tool to put into your kit,

• 31:45Speaker 01

  which is like, imagine sort of, it's the same, like, the same circumstance, it's the same circumstance, but a different situation. Right? Like, I've somehow not seen people for 10 years, for 10 months and whatever, but I'm on a yacht. I do think, I, I think that that's actually a really, really good, another way to get outside of your situation and be able to see it from the outside better.

• 32:09Ryan Holiday?

  Yeah, it's like, let's say you just got unjustly fired from your job and you're like, "This is so horrible. This was a huge injustice to me. I hate this place. How could I have spent time here? Blah, blah, blah." And so that's that you feel very disempowered. But if you had quit the day before-

• 32:26Speaker 01

  You would feel amazing.

• 32:27Ryan Holiday?

  Exactly. And it's the same outcome. You don't work there anymore. And you can choose to tell yourself whatever story you want about what happened. You can say, "I was the victim. I was screwed over." Or you can say, "I was fired because I don't suck like everyone else who works here." Like, you choose that story. And I think oftentimes, we, yeah, we choose the bad story. And worse, we choose a bad story to justify bad decisions. That's the rough part.

• 32:57Speaker 01

  True. Yeah. And I would even say that I love to try to get to second order thinking, which it would be like, "I was fired because I wasn't a good fit for the company." Or, and so that's good. That's good that I discovered that because I should, I should try to be at a place where I fit with them, you know, that, that we're all happy. Another, another thing that you can do, and this is some, you know, poker players have to do this all the time because sometimes you play like crap, right? Is, "I was fired." And let me actually try to figure out why I was fired so I can be stellar in the future. Because if I don't take the lesson from that, I'm really missing out on an opportunity. I need to view this as an opportunity that I was fired. It's an opportunity for self-discovery and learning. Right? Like, if not just, even if it was unjust, that I need to think about

• 33:42Speaker 01

  what the signals were at that company that, that they were, that there were unjust things going on. So they don't end up at a company like that again, which you might do. I, you know, so I love to get to sort of the second order, like, you know, we don't want to think about things as either good or bad. And we want to understand, like, what's the good that you can take from situations that are occurring in your life and try to figure out how you can turn those into learning moments in order to become a better decision maker. And I think that that's so important because of something that you said, that it's so easy-

• 34:14Speaker 01

  To, again, thinking about this time problem, to, to interpret something that's happened in a way that protects my identity today at the sacrifice of my, my long-term well-being. So if I, you know, if I get fired and I just say, "It was unjust, it was so unfair, that was so mean to me." I get to preserve the idea that like, I'm a great employee and I'm a good person and there's nothing that I could ever do that, where I should deserve to be fired. And that's a big, like, that's really good for myself narrative. But it's probably not good for my long-term well-being. Because maybe there were reasons that I was fired that I actually could have done better in my job

• 34:59Speaker 01

  and I should be willing to explore that. So in order to preserve my identity today, I'm losing out on the opportunity to actually create better outcomes for myself in the future by trying to figure out how I might improve my decision-making and my performance going forward. And most of the time, when we're faced with that trade-off, should I protect myself today? Or protect the, all the versions of me that are gonna occur in the future that should like to create better outcomes? Because I learned from, from what's happening in my life and I've become a better decision-maker. When you're faced with that choice between those two people, you'll choose you today. And that's actually really harmful for your long-term well-being.

• 35:43Ryan Holiday?

  Right, you're choosing not to learn from the situation at the, you're choosing to preserve your sense of self over your ability to learn from what's happened.

• 35:56Speaker 01

  Right, so, so you can think about like, the, the, the, it's sort of a paradox, right? Like, if I were thinking about what, what What's going to actually generate a really positive self-image for me? Right? In the long run. Um, and in the long run, what's going to generate a positive self-image is like, I'm going to have great outcomes. I'm going to achieve my goals and that doesn't mean like, uh, I'm going to make tons of money because that might not be my goal. Right? Uh, my goal might be like, I want to be an amazing member of the community and I want to be an incredible parent. And, um, you know, a really amazing spouse or whatever your goals are. Right? So you're thinking about what, what, you know, that's ultimately like achieving those, those goals, the things that we strive for.

• 36:39Speaker 01

  And increasing the probability that you're actually going to achieve those things. That's ultimately what going to be what determines the way that we view ourselves. Right? So that's, that's like having the long view.

• 36:51Speaker 01

  But what happens is that we think about, you know, when we're in the moment of something bad happening to us. We sacrifice.

• 37:01Speaker 01

  The, we basically lower the probability that it ultimately will end up thinking well of ourselves. In order to take the shore, like I think well of myself this moment. Um, and I think that that's that problem is that trade off between now. And sort of all the versions of me that are going to exist after now.

• 37:20Ryan Holiday?

  Yeah. You talk, you talk in the book about that idea of resulting sort of, uh, you know, letting, letting the results sort of determine whether something was good or bad. And being sort of too attached to the results. I find that to be so tricky. It's not just giving yourself credit for things that you don't deserve. That's tricky. This is where the ego thing comes into play. It's, it's, and we're seeing this play out politically right now. What happens when it doesn't work out? That's actually where the ego and the identifying too much with the results is really insidious. Because now you're incapable of losing, you're incapable of getting fired, you're incapable of being wrong. You know, you're incapable of, of looking foolish.

• 38:02Ryan Holiday?

  And, and so instead of facing the facts and having to own that discomfort. You create an alternate reality where it wasn't your fault. It didn't happen, so on and so forth. So to me, the safest and most rational position to be is to like, really focus on the decision, really focus on the action. And then you kind of have to kiss the other part. Uh, uh, up to God, like you have to say like, the result is the result. It doesn't reflect on me either way.

• 38:29Speaker 01

  Yeah, so like, for example, if you had mentioned sunk cost, when you look at the research that's been done on sunk cost, what you just talked about is kind of one of the only things that actually reduces that behavior, which is to say, the outcome of any single decision is not indicative of my decision-making capability. Right? And when you do that, and when you say, what really matters is the process that I use to make decisions. And if you can create that kind of accountability to process as opposed to accountability to outcome, that can relieve some of these sunk cost traps, right? And some of these escalation traps. Because otherwise, what happens is that as the world, you know, I think that we have this intuition

• 39:11Speaker 01

  that if we enter into a course of action, or we make a particular decision, that when the world in the future tells us, hey, by the way, like, maybe that wasn't the best thing to do, that of course, we're all gonna say, okay, that wasn't the best thing to do. I now change my mind. I'm changing my beliefs. I get it. But we know that that doesn't happen because we have all these traps that we've been talking about. We know that when the world delivers you that news, that maybe what you're doing, you should reconsider. We don't. We don't reconsider. We hold very tight to the things that we believe. And we do exactly what you just said, is we find all sorts of reasons that we get to reject it. And hold on to our ever tighter belief

• 39:56Speaker 01

  that the things that we believe are true. And then there's actually a kind of interesting paradox, which is that we know that a lot of times our actions inform our beliefs. So now we can get into this vicious cycle as we start to reject these negative signals from the world in order to preserve the things that we believed, you know, as true, and that we're on the right course of action. That actually ends up reinforcing the beliefs that we have. Because otherwise, why would we have rejected those facts in the first place? Right? If the things that we believed weren't totally true, we wouldn't have rejected those facts. And now you can see this spiral where in some ways, the more bad information that you get... The more that you end up entrenching in your beliefs, I think that one of the best

• 40:41Speaker 01

  examples of this is, so back in the 50s, Leon Festinger was really interested in these kinds of problems of how do we process, you know, outcomes that are, you know, sort of contradict what we believe to be true about ourselves and particularly our identities. And he, there was a doomsday cult that believed that, you know, humanity was really awful and there were aliens that were going to come down and destroy the world, but they were going to save the pious few, the true believers. So there was a particular date that this event was supposed to happen, it was supposed to happen at midnight on a particular date.

• 41:22Speaker 01

  So Festinger actually joined the cult of, like, a week or something before this was supposed to happen, like, right before this was supposed to happen, because he wanted to understand what's going to happen when the aliens don't come. Right? Are they gonna all go, duh, cult disbanded? Right? Or are they gonna entrench in their beliefs? And I think that what happened is so, it's really illuminating. So the date comes and it's midnight, and of course, the aliens don't come, and everybody's sort of a little bit confused, and then somebody says, this clock is wrong, the clock in the next room is right, because there was like a five-minute difference between the two clocks.

• 42:05Speaker 01

  So they all go running to the next room. They look at that clock and it becomes midnight. So now the question is, what happens? And it takes a little bit, like, everybody's a little bit uncomfortable at first, but then it happens. We were so devout in our beliefs that we've saved the world temporarily. And now there's a new date when the aliens are going to come and destroy humanity.

• 42:37Speaker 01

  And that's the power of that, right? Like, how, if, if your whole identity is wrapped up, I mean, these people have probably rejected their families. They've, they've, you know, they've rejected their, their careers and their, I mean, this is who they are. They, they are true believers in this. What do you do when it turns out not to be true, when the world tells you it's not to be true? You know, it's not true. You find a way for it to be true anyway.

• 43:04Ryan Holiday?

  Got a quick message from one of our sponsors, and then we'll get right back to the show. Stay tuned. Yeah, it's cognitive dissonance. And I think, you know, that's where we are, you know, politically right now. It's like, how can you, how can someone come to terms with the magnitude of either what they've been directly complicit in, or sort of tacitly been sort of fooled by? It's, it's the trickiest thing in the world. You know, I love that expression, you can't reason a person out of a position they didn't reason themselves into. I don't know what the answer is, but it is a very tricky situation where when people

• 43:44Ryan Holiday?

  get their identity tied up with what they believe, and then, and then the more severe or the more extreme the things they have done as part of that identity, it becomes harder and harder to ever, ever come back from that. And I, quite frankly, I'm not sure if people can come back from it at this point. I mean, we've seen how far it's gone. I'm not sure if you can come back from that.

• 44:06Speaker 01

  Yeah, I mean, I, I think that, I think that that's true. And, and you can see, it's like, it's that, what are the actions that you have taken? You know, that I think are really different. So, like, someone who, who voted for Trump in 2006, 2020 is going to be in a very different position than, than, for example, someone who stormed the Capitol.

• 44:26Ryan Holiday?

  Yeah, of course.

• 44:28Speaker 01

  And you might say, oh, well, of course, but the people who stormed the Capitol, you know, had a stronger belief. That the then the people who merely voted for him. But uh but if somebody just couldn't get to that demonstration. Uh but they would have gone if they could have. They're also in a much better position.

• 44:49Ryan Holiday?

  Right, or just people who stayed outside.

• 44:51Speaker 01

  The people who stayed outside are in a much better position than the ones who went inside. Right, because our actions really do inform our beliefs and and the more that we act in a way that uh would prove that we believe the thing that we do, because that the action would have to generate from that, the more entrenched in the beliefs that we come we we become. And interestingly enough, like this isn't just having to do with things like that. This has to do with like, for example, subject matter experts. Right, who obviously have incredibly strong models of the world. Even when the world is sort of giving them information that they might want to change their model, they won't. They're so deeply entrenched, because every moment that they've breathed, you know, this this expertise that they have, it's now part of their identity.

• 45:35Speaker 01

  You see this like there's really wonderful work that Marie Schweitzer and Katie Milkman did, where they just looked at analysts, stock market analysts, who took a very out of consensus and extreme opinions on on on particular stocks. And then you check in with them like a year later. When uh it turns out that those extreme positions didn't actually come true. And you ask, well, what happens with them? And they actually escalate their commitment to those positions.

• 46:03Ryan Holiday?

  Right.

• 46:04Speaker 01

  Right, so so uh now imagine if that's happening with a stock analyst, someone who we might think is quite rational. Right, uh what happens when you start to get into these sort of broader uh problems that we're sort of now seeing play out on the national stage? And it's a it's a big conundrum, because this is very deeply part of our mindware.

• 46:24Ryan Holiday?

  Well, the other thing, you know, there's that Zen saying about like, we shall see, you know, like where we tend to try to evaluate the good or badness of something far too early. Yeah. Like, I think you, I saw this play out in an interesting way right after the election, and I don't think this is political at all, but it's like, so obviously, the polls for Biden were sort of very, very favorable. And then election night came in, and it seemed like sort of immediately, all the models had been wrong, and people were ready to basically string up some like Nate Silver and Nate Cullen. Right. And then, and then as the, the evidence, and they were about to, you know, Biden's campaign was a failure and a huge mistake and all this stuff. And, and, you

• 47:08Ryan Holiday?

  know, that Trump had sort of outperformed in all these different areas, and then he was looking good. And then, over the next three or four days, the numbers shifted again, and then the numbers shifted again. And now, you know, two months out from the election, we have sort of a different narrative. I think the other, realizing that people try to sort of wrap things up very, very early, and that you have to kind of have a sort of a Zen element of like, I'm going to wait and see before I cement this in my mind as to what it is, is to me also a really key sort of, like, you know, when we say that word to be philosophical, we think that means like being wise, but I also think it means like kind of taking that longer view, not, not jumping on things. Like, even, I'm sure

• 47:51Ryan Holiday?

  you've seen this with your own books, certainly I have, books that I thought did great when they came out, have turned out not to hold up over time as well as I would have liked. And, and other books that, you know, came out of the gate slow, have over time accumulated and even accelerated to the point where I now look great for it. But, but if I was really being honest with myself, I not only didn't think this would happen, I was kicking myself, you know, in the months after it came out for having failed. And so, this sort of idea of like, not only does nobody know anything, the famous William Goldman line, but like, it's way too early to tell, is another thing I think about.

• 48:34Speaker 01

  Yeah, so again, I love that you're talking about this because I think about the, you know, what is your time horizon, right? Like, I think this matters so much. So I love your example of the election, right? Like, on election night, it was, oh, the forecast was really gonna have to have a, you know, a come to Jesus because they were so wrong. And then when it was clear that Biden was gonna win, but everybody sort of felt like it was gonna be close, then it was like, wow, they're still gonna have to have a come to Jesus because this was a really close election. And, and they're gonna really have to think about it. And then, of course, it turned out to be a landslide. Like, so I think that that's such a good point. And I know, like, one of the things that I think about is luck. So, and this is something that's in Nicholas

• 49:18Speaker 01

  Rusher's book of the same name, Luck, that was, I think he published that in the late 90s. It's a, it's a great, you would actually love it. So I really recommend that you read it if you haven't, and your listeners would love it. And one of the

• 49:31Ryan Holiday?

  Who's it by?

• 49:32Speaker 01

  Nicholas Rusher.

• 49:34Ryan Holiday?

  Okay.

• 49:34Speaker 01

  And the, the name of the book is Luck. It's short. It's a very quick read. Not that well, no, it's like about the size of like a Seth Godin book. Like, it's not long. But it's amazing. And, and so one of the things that he really talks about is that, you know, we have this need to label luck as good or bad. And that we need to recognize that luck is just luck for two reasons. Good luck for me might be bad luck for you. Right? So we need to think about what perspective. And that's kind of the point that you made about, like, does it matter if I'm on a yacht, or it's COVID, right? Like, we need to think about what are the different perspectives? How would this look from the outside, for example? But then the other problem is that it depends on your time horizon. So with luck, it's like, is it good luck or bad luck? I don't

• 50:17Speaker 01

  know. We shall see. And I've thought about this for myself. I mean, right at the end of graduate school, I got really sick and I ended up in the hospital and I had to delay all of my job talks. And it meant that I, I had to wait until a year to go back out onto the job market. And I can tell you at that time, I felt really unlucky. I was like, why is this happening to me? This is so, you know, all the things. It's so unfair, and I'm sick, and blah, blah, blah, and all this stuff. And I was really sad. And I felt like very bad luck had occurred. But it was in that year that I started playing poker. What good luck? But I only can recognize that it is good luck because I'm, you know, a long time away from it. And I think that we need to view luck as luck. I don't think that we should be putting these labels on it. Because we, as you just said, like, we don't know.

• 51:02Speaker 01

  So the question then becomes like, why do we need these labels? Why do we need to kind of have, not leave it as an open thread? And say, I need to wait a while before I make any kind of judgment of this. And it's because most people have, you know, Phil Tetlock has done work on this, who wrote Super Forecasting, but a lot of his earlier work was on sort of cognitive styles. A lot of people have a very high need for closure. And so we don't, just as human beings, a lot of us, we just don't like to leave those things open and unjudged. Because it means we're sort of saying we're, we're in the middle somewhere. We're not yes or no, we're not bad luck or good luck, we're not right or wrong.

• 51:43Speaker 01

  We're allowing ourselves to allow things to play out and to entertain the possibility that we're somewhere in the middle. And I think that it's a really important cognitive style to try to develop for yourself. Because a lot of these things, even when we're talking about something like escalation traps, or sunk cost, or, or motivated reasoning, these are actually related to this need for closure. And so the more that we can allow ourselves to be open, you know, not just open minded to like other people's ideas, but open minded to the idea that we don't know what, what, you know, what things mean. We don't know what is true. We don't know whether things are good or bad, good luck or bad luck. I mean, sometimes it's clear, but a lot of times it takes time to play out.

• 52:26Speaker 01

  If you can develop that in yourself, you're going to be a lot happier.

• 52:29Ryan Holiday?

  But I don't think you're being quite fair to yourself, right? It's not that you, because you got sick and then you, you had to take a year pause. It's not like then you won the lottery. So is that good luck or bad luck? It's that you were out of the job market and then you did, what the Stoics talk about Mark Sturges is, you know, good fortune is what you make for yourself. It's that you decided to start playing poker. And sure, I'm sure there was serendipity involved and you were exposed to it, or you got the opportunity because of this or that. But the good luck was, was, was something inside your control in that it was something you chose to do. So I think often we have this sort Sort of deterministic, like I was, I was, I'm writing about this in my, in my next book. We talk about this idea of moral luck.

• 53:13Ryan Holiday?

  And I was talking about the sort of the Victorian era. And Churchill has this line of how it was, it was, you know, an era of, of great men, but small events. But I went and I sort of looked at the things, the injustices in the world and the bad things that did happen during the Victorian era. That just nobody chose to do anything about. And it sort of makes that idea of moral luck. Yeah, sure, you know, we weren't drafted to fight in World War Two because we weren't born. But that doesn't mean horrible things aren't happening right now that we could do something about if we decided to assert some agency over our own lives.

• 53:55Ryan Holiday?

  So I think oftentimes people sort of look at things as good luck or bad luck. When really they should be thinking of, of sort of luck as something one makes for themselves.

• 54:07Speaker 01

  Yeah, so, yeah, so I, I'm going to come down somewhere in between, I think, those two positions, which is. And this is something I've been thinking about, like what happens when someone is forced to quit? Right? So what I, obviously, when I get sick and that happens to me, I could just spend the whole year in my house being sad. And I did not choose to do that. So I completely agree with you there is that I said, okay, this has happened. What, what can I make of it? Where I think that it was really good luck is that it, it forced me to explore other options besides academia. In a way that I otherwise wouldn't have. And that's why I consider it good luck, because I think that had that not happened, I would not have done that exploration.

• 54:51Speaker 01

  And I may have had, by the way, quite a nice life in academics. Right? That, that could, that certainly could have been, but I, regardless, I think it was a good thing. Having not been in school every second of my life up until the time that I was 26 years old. I think it was a good thing that I was forced to go and explore. Um, so that's where I think the good luck, that's why I call it good luck because

• 55:15Ryan Holiday?

  Sure.

• 55:16Speaker 01

  Uh, it made me actually go explore. Now, what I did with that exploration for sure, it's a, it's a mix of luck and skill, right? Like, I was in the right place at the right time for poker and I had talent for it and I was willing to go do that and not just feel sorry for myself and so on and so forth. And I'm perfectly happy to take credit for that. But the

• 55:33Ryan Holiday?

  And there's definitely good, good breaks and bad breaks. So that, I, I would never dispute that. And I think, you know, Bill Walsh talks about this and the score takes care of itself. He's like, at the end of the season, whether you win the Super Bowl or, or, you know, you, you go oh and 12, you, you, you have to look at the, the bad calls and the balls that bounced out. And, you know, the, the, the injuries, there's definitely good breaks and bad breaks. And, you know, also, you know, we all have good, good breaks and bad breaks as far as when we're born, where we're born, who we're born to. Um, it, it can be very self-serving to pretend those things don't exist as well.

• 56:12Speaker 01

  Yeah. And I, and I think that I would add, just circling back, that, that again, we have to remember that something that feels like a good break right now, might, with this, you know, with time having passed, actually, you might feel like it was a bad break. And something that feels like a bad break right now, with time having passed, as you look back on it, might feel like a good break. And I think that's why we should, as, as you pointed out, you know, we, we should be better at sort of withholding judgment and not need to close that loop right away and just like know in this moment and allow time to pass and allow, allow the passage of time to kind of give us a better perspective on how we should process, um, what that is.

• 56:55Ryan Holiday?

  Well, you, you talked about something else in the book that I, I think pertains to this, or maybe you disagree, but you talked about sort of finite goals versus infinite goals. I see people sort of get themselves into trouble, right? Like, uh, when, when I work with authors, they'll be like, my goal is to sell one million copies. And, and I go, why do you have a goal? You know, like, why, why have a goal at all? Like, obviously, the goal should be for this book to do as well as it can possibly do, right? Which, which, which no one actually knows what that number is. That number could be 10,000 or that number could be 10 million. I, I actually think maybe the, the, the other Stoic idea, you sort of detach from results a little bit, you kind of just have a vague directional sense of where you want to go.

• 57:40Ryan Holiday?

  So then you can be flexible. And then honestly, also, there's less of such a thing as good or bad luck. Right? Like, if my goal is to like, make a great book that has impact in the world. It's somewhat semantic here, but that is an easier target to hit because it can be redefined based on the things that occur in the world. As opposed to forcing myself into this binary win-loss mentality that doesn't actually exist on a product like this. To me, that's actually putting yourself in a position, not just to be unhappy, but

• 58:18Ryan Holiday?

  to be unsuccessful because you've constrained yourself.

• 58:27Speaker 01

  Yeah, I mean, so, gosh, oh, I got a couple of thoughts about this. So it was so good. So thought number one is that I think the more that we can disconnect our identities from something that is very finite and like, super concrete and well-defined in terms of the things that we're engaging in, the better off we are. So what immediately comes to mind is like, this idea of like, what do you want to be when you grow up? And the answer is like, doctor. As opposed to, I'd like to be a good member of the community who does a job that has these particular features. Right?

• 59:12Speaker 01

  Or like, simply like, are you, do you want to grow up to be a scientist? Or do you want to grow up to do science? And I think that there's a really big difference between those two things that's got a very similar flavor to me with, between like, you know, I want to sell a million copies versus I want to write a book that has impact in the world. Right? Because it could have amazing impact in the world if exactly the right person reads it. Right? So.

• 59:39Speaker 01

  So, you know, I, so I'm gonna get like a sort of weirdly philosophical. So, so I, when I was in high school, in my junior year, I had to take religion. And I just say I'm not religious, but, you know, and I'm, I was at an Episcopalian school, but I'm Jewish, it's like my dad taught there, but we had to take religion. So, we had to read the Bible and read some philosophy. And there's a particular philosopher who's a Protestant philosopher, whose name is Paul Tillich. And required reading in junior year at my high school was a book that he wrote called, "The Dynamics of Faith." And if somebody were to ask me, "What's the book that had, has had the most impact on you

• 1:00:23Speaker 01

  in your life?", I would say that book. Now, this is a Protestant philosopher who's arguing for belief in God. And I don't believe in God. I'm an atheist. But, but, why did this have such a big impact on me? Because he, he talks about something called existential disappointment. And this is a really big piece of this book, "The Dynamics of Faith", essentially saying what you, you said, and this is why it had such an impact on me, that what people will do is they'll strive for the finite, right? Like, "I want to sell a million copies," or "I want to make a million dollars," or things like this, where this is a goal that you can attain within your lifetime. And he says that what ends up happening is that you sort of

• 1:01:05Speaker 01

  pin your ability to be happy on the achievement of that goal, as opposed to on the things that would actually make you happy. What are the features of you as a human being and your interaction with the world and the things that you're sort of striving for that would help you to achieve happiness? And he points out that what happens is that when people achieve those goals, "I made a million dollars, I sold a million copies," that they tend to go into very deep depressions, right, afterwards. You see this, actually, "The Weight of Gold" is a good example of this. Like, what happens when you win the gold? And then what, what do you do afterwards? Right? I'm the same person I was the day before, then the day after. And I thought this was gonna fulfill me and it was gonna create the happiness that I haven't created for myself yet. And of course, it doesn't.

• 1:01:50Speaker 01

  And then you're sad. Now, he uses this as an argument for believing in God, because he says that striving to, you know, striving toward God, who is infinite, is gonna solve this problem. But what I took from that is that there's all sorts of ways that you can create infinite goals for yourself, right? You can say like, I wanna, I wanna, every day I wanna be a little bit better than the day that I was, you know, than I was before. I wanna try to be the best parent that I can. Now, that's a goal that I can never, it isn't finite, I can't ever reach it. I want, I wanna try to write in a way that's gonna create the most impact in the world, given what I'm capable of. Right now, you've taken it from the finite into something

• 1:02:31Speaker 01

  that is more infinite. And I think it creates a lot more happiness. So it's weird. I read this little book called The Dynamics of Faith, which was, you know, trying to argue for belief in God. And I took from it so much that this has been the single most impactful book that I've ever read in my life.

• 1:02:47Ryan Holiday?

  Got a quick message from one of our sponsors, and then we'll get right back to the show. Stay tuned. I love that so much. Yeah, it's, it's, I think people who say they know exactly where they're going are lying, or they're putting a lot, they're putting all their eggs in one basket. I wanna be sort of flexible and to be like, I kind of prefer to have these sort of vague, like, like, my goals are for the rest of my life, to continue being a writer, to be in a happy marriage, and to be a great father. So like, those are, those are goals that I have a lot of, like, a lot of influence over, a lot of the ability to define, and it allows me to sort of absorb what happens,

• 1:03:32Ryan Holiday?

  and not like, but if my goal was to be the bestselling writer of my generation, now, not only is that very specific, and so in some ways easier to achieve, but it's also probably more unlikely that I will actually achieve it because it is so specific.

• 1:03:50Speaker 01

  And, and what, what, again, going back to Paul Tillich, what he would say is it's more unlikely that if you did achieve it, you'd be unhappy.

• 1:03:57Ryan Holiday?

  Right, right.

• 1:03:58Speaker 01

  So that's the thing that I really took from that. You know, I mean, it's like goes into this like you've created something that's not only pass fail, but like only one person can do it. So you're setting yourself up for failure anyway. And then because you've sort of pinned your whole identity on that, one, once you achieve it, you probably won't be happy anyway, because you probably haven't done the things that you need to do in your life to actually create happiness absent that one, one event occurring in your life. So, yeah, so that you, you're, the type of goals that you have are very similar to the type of goals that I have. And I, I kind of started working on that when I was 16 because that, that the book really kind of really, it made such a big impact on me.

• 1:04:38Ryan Holiday?

  I, I had one more question for you, and if you have to go or you don't want to touch it, uh, feel free. No, um, so I was thinking about your book, Thinking in Bets, and I had, uh, I had, uh, Professor Tamler Summers on the podcast recently. He, he wrote this great book called Why Honor Matters. And we were talking about this, there's this pivotal moment in Stoic philosophy where Cato, who's this famously, uh, principled politician, is sort of offered a bribe slash alliance by, by, by Pompey. And, uh, he turns it down. He says, you cannot buy my loyalty. Now, the, the, the upshot of this decision was that the person who was trying to bribe him and the potential person he could have been in an alliance with ends up aligning

• 1:05:22Ryan Holiday?

  with Caesar instead, and they become mortal enemies. And it, it leads to the collapse of the Roman Republic. And so we were talking about this, it was, um, it, it, you know, some historians, even at the time, were like, look, you know, Cato's principles ultimately brought about the exact ruin that he was trying to prevent. So was this a bad bet or not? And what, what, uh, Professor Summers was saying that I thought was interesting, he's like, no, you have to think about it more like this. Is taking a bribe a good bet or a bad bet? Right? He's like 99% of the time, not taking a bribe is going to work out better. Right? It's the right thing to do for a reason.

• 1:06:02Ryan Holiday?

  Usually it's not going to blow up in your face and cause more harm than being corrupt will harm. And I thought that was a really interesting way to think about it. And what he said was, is like, the problem is the reason we often break our own rules is we, we get overconfident and we say, I know, we say, I know this time it's an exception. I know this is wrong, but it's going to work. And it strikes me that that is that is an insidious way of thinking that we're dealing with now as a country where a lot of politicians, some whom you and I have both spent some time with and and some, you know, that we only hear about on television, basically

• 1:06:41Ryan Holiday?

  made this bet that working with a bad person who did not share their values and was fundamentally unreliable and untrustworthy would work out because it would help them accomplish a number of other goals. And now we're, you know, now we're dealing with the intense fallout, the four years of fallout of that decision. I'm curious, like, when you think about just like these bets, where do you like sort of principles and beliefs and sort of a sense of right and wrong fit in there? Or have you thought about how they sort of come together?

• 1:07:17Speaker 01

  Yeah, I actually have. So just, just a couple of things. So one thing with history in the in the Cato example is that, you know, one of the things I think about a lot is that the future is many branched, but the past is only one branch. Like, we already know what the past is. And so, and again, Phil Tetlock, again, I mean, he's done so much amazing work. It's not surprising I'm referring to him more than once, has done really great work on on the idea that when we sort of think about history and we offer somebody counterfactuals, they will generally reason to get to the outcome that actually occurred. Because, you know, it's like, that's what happened. And so we really view it as

• 1:08:01Speaker 01

  inevitable. So when I'm listening to that story about Cato, I'm thinking, well, at the point that he decided not to take that bribe, it's not inevitable that the history unfolds the way that it does. That might have been fact, low probability, and we don't know. It's just that when we look at things in retrospect, it's very hard for us to get out from under that feeling of inevitability. So that's just one thing I would think. The other thing that I would say is that

• 1:08:27Speaker 01

  Look, a lot of the problems that we have on a personal level, or as a country, are these kind of death by a thousand cuts problems. Right? Like, it's, it's, you know, failure is built out of exceptions in a lot of cases. Like, oh, this is an exception to the rule. This is an exception to the rule. So I'll give you a simple example that isn't as big as the political one, but relates to it really well. It's like, I wanna eat healthier, but it's my kid's birthday. So even if you're from the outside watching me and trying to be an accountability coach to me, when you come to me and say, why, why'd you eat the cake? I'm like, well, it was my child's birthday and I didn't wanna set a bad example and I didn't want them to have food issues and whatever. I can come up with a billion different rationalization.

• 1:09:09Ryan Holiday?

  Right.

• 1:09:10Speaker 01

  And that's, that's fine for that one thing. But if you're a good accountability coach for me, what you'll say is, how many exceptions have you been making recently?

• 1:09:19Speaker 01

  It, I need to understand this i- in the aggregate, in the scope of time. Like, did you eat pizza last night because, uh, you know, the news was really bad and you were stress eating? And, and did you have cake with, with your spouse, uh, because it was your anniversary? Or were you on a-

• 1:09:34Ryan Holiday?

  And are you gonna keep eating the leftover cake for the next, uh, week?

• 1:09:38Speaker 01

  Right, exactly.

• 1:09:38Ryan Holiday?

  Because it was still your kids, it was recently your kids' birthday.

• 1:09:41Speaker 01

  Exactly. So it's like, I get that you have a justification for this one time. But the problem is, you keep making that justification over and over again. You can see this also, like, with NFL fourth down decisions, funnily enough, right? It's like, and you can tell it's, that, that it's a problem because it's unit directional. Nobody ever goes for it on fourth down when the analytics say you shouldn't. They don't go for it on fourth down when the analytics say you should and they always have a good justification on that one time. Right? Like, our running back wasn't, uh, performing, or the offensive line wasn't holding, or our quarterback was off that day, or the defense was really on, or whatever it is. They have a reason for not going for it on fourth down. And if you ask them on that one time, they'll say, they'll give you a reason that you're gonna accept.

• 1:10:25Speaker 01

  Because you can always accept it in the one-off. But the question is, when I look across your fourth down behavior, do I see a, a, a pattern where you're making that exception a lot? And that's what I should really care about because I need to think about these things in the aggregate. So I'm actually a big fan of what I would call a category decision, which is essentially bribes are bad.

• 1:10:45Ryan Holiday?

  Right.

• 1:10:46Speaker 01

  Right? And like, there isn't, there, I don't wanna get into a situation where I'm, I'm making an exception about that. So if I take like the healthy eating version, like, for example, I'm a vegan. So that solves my problem for me. Because I've made a decision about the category. Right, I just can't, I just can't eat certain stuff that, that I, I believe is bad for my health. Um, you know, I'm, I'm, I'm not a bribe taker. So now when someone comes and offers me a bribe, I'm not a bribe taker. I don't need to make a decision that's going to allow me to be rationalized because I'm going to come up with like some version of history where this is a good idea. It's just a bad idea to do the thing that I'm doing. And it's much better if we think about those things in advance because otherwise we can

• 1:11:28Speaker 01

  get into these really bad slippery slope decision, you know, situations where you just sort of keep figuring out a way to treat it as a one-off every single time. As opposed to viewing all of those decisions in the aggregate. Because if I presented that list of decisions to you in an aggregate and said, do you want to make exceptions on all of these, you would probably say no. Right, but because it's occurring sequentially and you're not seeing it that way, uh, you do that and then we get into the, the problem that we started with, which is our actions inform, um, our, our beliefs and can cause them to entrench. So the more exceptions that you've made, the more willing you're going to be able to make exceptions in the future. Because if you didn't in the future, what would that say about all the decisions that

• 1:12:12Speaker 01

  you made in the past to make exceptions? Because now it becomes part of your identity. And then all of a sudden, you're a true believer. And that, this is really, really a problem. It's really bad. And so I'm a big fan of saying, no, it's okay to have hard and fast rules. And it's right. Taking a bribe is bad. And so you should not do it. And how it ends up turning out is somewhat out of your control and you don't want to start imagining, well, maybe this, that's the way to get to the exception. Well, maybe this is a Cato situation.

• 1:12:43Ryan Holiday?

  Right. No, and, and I think sports is another good example. You mentioned fourth down, but the other one you see all the time is like, you know, we're a culture team. This is what we need in our organization. This is what we accept. And then a, a talented, uh, player, uh, exceptions get made for them. Or, uh, you know, a, a person whose, uh, market value has plummeted, uh, because of a domestic violence dispute or a drug addiction, you know? They're Antonio Brown or, or they're Kyrie Irving because they're, they're just incapable of not, you know? Being a cancer in the locker room and you go, it'll be different with me.

• 1:13:24Ryan Holiday?

  I like, you know, so that to me, that's the other bet where ego is so insidious is we go, hey, and I saw this at American Apparel. I saw, you know, billionaire investor after billionaire investor go, it failed for everyone else because they're not as good as me. And I will be able to get a different result because I am the exception. And I think that's also what we've seen over the last four years. It's like you saw how your predecessors did. How did you think you'd be different?

• 1:13:53Speaker 01

  Well, I, you know, I think that, yeah, I think over the last four years, I mean, you've seen a sequence of people when, when,

• 1:14:00Speaker 01

  you know, it's, yes, but you know, I mean, eventually everybody gets turned on, right?

• 1:14:05Ryan Holiday?

  Yeah, of course.

• 1:14:06Speaker 01

  That won't happen to, you know, but I'm the one that that won't happen to. It's like, well, okay, but, and, and I think this actually brings up a general decision-making principle, which is you should always be checking for base rates, right? You should be looking for the reference class, right? Like, in my situation before, how did things go for them? So like, an example would be like, when you're talking about somebody buying American Apparel, for example, let's say that you were opening a restaurant in the non-pandemic era, right? So, so you're opening a restaurant and you think like it's a location where the five restaurants in front of you have failed. And you're thinking, no, but I'm gonna, I'm gonna, you know, this, it's the lease is cheap and this is a, you know, but I'm different than them. I'm going to be able to be better than them. You're just ignoring the base rate.

• 1:14:49Ryan Holiday?

  Right.

• 1:14:50Speaker 01

  Right? Like five ones before you, their failure rate was 100% within the first year. You shouldn't assume that you can possibly be that much better than what the base rate is. So, so we can think about base rates as like, you know, what's the probability you die of heart disease? Or what's the probability that a restaurant fails within the first year? Or, you know, so on and so forth. So those would be, but then we could think about reference classes as well. What has happened to people like me in this situation? And it's really good to ask yourself those questions. It's a way to get out to the outside view. Another example would be like, this, this is one that happened to Condamon.

• 1:15:25Speaker 01

  If you're telling your publisher that, okay, I've written the proposal and you haven't actually, outside of the proposal, you haven't written the book yet, and you say, I'm going to be able to turn this book into you in three months, you might want to check the base rate.

• 1:15:37Ryan Holiday?

  Right, sure. How long does it normally take?

• 1:15:40Speaker 01

  Right. How long does it normally take an author? And then you can sort of figure out, like, what's the fastest that they tend to deliver? And what's the longest that they tend to deliver? You know, and then you can say, well, where do I sort of feel like I fit in that distribution? And you're probably going to then tell your publisher, like, you know, assuming you've, if you've done a lot of work into the proposal, maybe you tell them you'll deliver it in nine months, right? Maybe you think you can be pretty fast. But at least you've come off of this idea that you're going to deliver this book in three months.

• 1:16:06Ryan Holiday?

  Yeah, we all think we're going to be the exception that proves the rule. And we do end up proving the rule, just not how we think.

• 1:16:12Speaker 01

  Right, exactly, exactly, exactly right.

• 1:16:16Ryan Holiday?

  No, and to me, that's the, that's the sort of ultimate bet that the Stoics make, and that I think we're sort of ruing now culturally, is this idea, like, character is fate. Like, when people tell you who they are, you should believe them. And definitely, when they show you who they are, you should believe them. And, and very rarely has that bet paid off, or not, not turned out to be true. And, you know, it could be, hey, you really got to know this person, and actually, you found a different element of their character that they're betting on. That may be true, but often, that's not what they're doing. They're saying, oh, yes, this person is of bad character, but I will be able to control them, or I'm smarter than them, you know, all of these rationalizations.

• 1:17:01Speaker 01

  Yeah, exactly. Like, you know, if somebody, if somebody has rehabilitated, right? Like, someone, you know, committed crimes when they were young, and then now they're, you know, it's years later, and they, they're, you know, they really are like a different person. I, I believe them, right? It's, but I, I, if you're acting in a certain way today, I believe you.

• 1:17:23Speaker 01

  Yeah.

• 1:17:23Ryan Holiday?

  Right, right, right. Yeah, no, it's, it's, you can, um, and, and, and rarely the, like, in Cato's situation, to go back to the point, it's, it's not, what, what, the tricky part is not when people go, oh, this isn't a bribe. This will be okay for the following reasons. The problem is when they go, I know this is a bribe, but the circumstances warrant the exception. That's the problem, right? Almost no one is, has said, hey, look, I really got in there and I understood Trump's soul, and I think for the following reasons, we're going to be able to do good together. They're saying, no, I know this person is X, Y, or Z, but circumstances warrant me, you know, because judges, or because, you know, whatever,

• 1:18:05Ryan Holiday?

  whatever extreme belief you've decided, you know, make it possible. And then everyone gets burned.

• 1:18:11Speaker 01

  Yeah, it's like, exactly. And, and, and again, the thing that I want to say is that I think about the small ways in which that's occurring in your life as well.

• 1:18:20Ryan Holiday?

  Of course.

• 1:18:21Speaker 01

  Yeah. Yeah. Exactly. And that's exactly what happens. And I feel like, it's like, you know, results are, you know, we're, bad results are built out of single incidents that you rationalize and justify.

• 1:18:36Ryan Holiday?

  Well, I wrote something where I was saying, like, look, you, you know, you see people go, why don't these politicians do something? Why don't they stand up? Why don't, why do they put people over profit? You know, we run down the list of all the things we want other people to do. And then it's like, you work a job that you don't like, you drive a car you know is terrible for the environment, you know, you're wearing clothes from a sweatshop, you know, down the list. And it's like, the, the may, when, when we, when we make these judgments, you make a good point, and you make these judgments, they, they're certainly educational, but we have to find a way to imply them at our own level, as opposed to letting it, letting us think we're above other people, because we're definitely not.

• 1:19:16Speaker 01

  Right, exactly. That's exactly right.

• 1:19:18Ryan Holiday?

  Well, thank you so much. I love the books and hopefully I'll bump into you at a, at a conference when, when, when those happen again.

• 1:19:26Speaker 01

  Yeah, hopefully we'll be able to see each other in person again. Um, you know, and I'm such a huge fan, and I, I so appreciated this conversation. It was a really nice part of my day. So thank you.

• 1:19:37Ryan Holiday?

  Thank you. Well, uh, we'll do it again very soon. And, uh, when, come back when you, when you have the next book.

• 1:19:44Speaker 01

  Well, it's hopefully going to be pretty soon because I'm already writing it. So.

• 1:19:48Ryan Holiday?

  Done. Great. Awesome.

• 1:19:52Ryan Holiday?

  Thanks for listening to the Daily Stoic Podcast. Just a reminder, we've got signed copies of all my books in the Daily Stoic store. You can get them personalized, you can get them sent to a friend, whatever you want. We'd love for you to have a copy. I know I love signed copies of some of my favorite books. If you love a signed copy of The Obstacle is the Way, He Goes the Enemy, Stillness is the Key, the leather-bound edition of the Daily Stoic, we have them all in the Daily Stoic store, which you can check out at store.dailystoic.com.