HerMoney Podcast Episode 225: Taking Risks And The Art Of Bluffing | HerMoney
How to risk it all (while bluffing your way through it) with Maria Konnikova, author of the new book “The Biggest Bluff.”
At HerMoney, we love behavioral finance — specifically, learning what we do with our money, and how our emotions play into our decisions. Whether we’re motivated by fear, or maybe a desire for control, or even love — those deep-rooted “whys” that we all have can change everything.
And wrapped up in all these decisions is risk. How much risk we take in the stock market, the risk we take when we buy a property, or the risk of going out on a limb to start our own business. If you listen to some of the most successful investors and business people in the world, they’ll tell you that at some point — maybe at many points — they had to roll the dice, and do a little bluffing to get where they are today.
This week we’re diving in feet first to talk about risk and luck with one of the world’s leading authorities on the topic, Maria Konnikova. Maria is the author of the new book, “The Biggest Bluff: How I Learned To Pay Attention, Master Myself, And Win,” and during her time writing and researching this book, she actually became an international poker champion and the winner of over $300,000 in tournament earnings. Maria is also the author of two other books you may have heard of, including “Mastermind,” and “The Confidence Game,” and she has her PhD in psychology from Columbia University.
Listen in as Maria tells Jean how she ended up in the world of poker, and why she decided to study risky decision-making under uncertain conditions for her PhD. Amazingly, she’d never played a hand of poker in her life until she started researching “The Biggest Bluff.”
Maria also talks about the role that luck plays in life, and shares her personal philosophies on luck as it relates to fate, and how all of it ties back into what we can and can’t control. Maria also discusses what she’s observed about good investors — they are skilled at the “illusion of control,” meaning that they don’t take as much negative feedback from their environment. In other words, they’re able to tune out the noise and focus on the long game.
“Poker, just like life, is a game of informational advantages. If I have more information than you, that’s great. But how do I get that? How do I actually acquire as much information as I can in order to make my decision? How do I make it, knowing that there is no such thing as 100% certainty?” Maria asks.
She also discusses why our emotions are so critical to any decision making process, and how they guide how we analyze information.
“It’s your decision process, it’s your logic, it’s the information you’re taking in, the information you’re using, how you’re analyzing that information, and it’s also your emotions. That’s so crucial in any kind of decision making. It’s also taking control of your mental state. How are you interpreting things? How are you reacting? Are you letting emotions into your decision process or not? Are you accounting for the fact that you’re tired, for the fact that you’re hungry, for all of these different things? That is the stuff that you can control. What you can’t control is the cards, the next card, the outcome, that’s just noise.”
Lastly, Maria breaks down the art of bluffing for all of us and tells us how to bluff, and how to observe someone who may be bluffing us, and the moves and decisions they might make. Perhaps not surprisingly, a lot of these skills helped turn Maria into an expert negotiator, and she shares some important takeaways we can all use in our careers.
In Mailbag, Jean and Kathryn tackle caring for aging parents, target date funds, caring for a significant other financially, and taking a 403b loan. In Thrive, should you take a gap year if your college is closed this fall
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