In recent interview with Barron’s, award-winning poker player Annie Duke shares insights about how investors can remove emotions from decision-making and “how global markets are really just one giant poker table.”

Here are highlights from the interview:

• On today’s uncertain environment, Duke contends, “The coronavirus is so clearly uncertain that people are more open-minded today, and because of that you can actually learn.”
• On decision-making and timing, Duke argues that businesses today are facing particularly challenging choices about things like when to furlough employees or go to austerity measures.  Most businesses, she said, make those tough decisions later than they should: “The reason is that when you want to execute on something really hard, and know it has some downside associated with it, you want to be certain of what the outcome looks like. The problem is, when you obtain that certainty, it’s usually too late in the game and you’ve increased the magnitude of the problem.”
• Regarding investors’ decisions about stock holdings, Duke says, “You want to protect yourself from yourself. The best thing to do, in this particular case, is look at other bad things that have happened to the stock market. Was it a V-shaped recovery? A slower recovery? What would have earned me the most money? Look at the outliers, and hedge part of a portfolio against that.”
• Duke’s experience as a professional poker player has forced her to reign in emotions when making decisions: “You have to do some mental time travel,” she explains—“think ahead as to what the end result is going to be. You can get there by saying, OK, I lost this hand, but do I think in a month this little uptick or downtick will affect my bottom line? The answer is probably not. Second, you try to focus on the quality of the decision, not the outcome.”
• Duke advises investors to “recognize in advance the places where you may not make a rational decision.” She adds, “people who in 2010 and 2019 just left their money in the market would have done better than all the people who decided they would sell at the high and buy the dip.”