#153. When Outcomes Lie
Why good decisions sometimes fail and bad decisions sometimes win
Welcome to the blog post #153! Click here to read more from previous posts.
During the Covid bull market in 2020–2021, a friend in my investing group shared his annual trading return in the US stock market.
Over 1,000%.
Yes — more than ten times his money in a single year.
Everyone admired it. But I remember thinking: Either he is a genius, or he is taking extraordinary risks.
At that time, governments around the world were injecting massive stimulus into the economy while the FED maintained near-zero interest rates. Asset prices surged aggressively, and many investors looked brilliant in a bull market.
Still, a 1,000% return was unrealistic to achieve without taking significant leverage or concentrating heavily in risky positions.
Then later the market turned downward.
And we never really heard from him again.
That experience reminded me how easily we confuse outcomes with skill.
When someone succeeds spectacularly, we assume they made brilliant decisions. When someone fails, we question their competence. We often treat outcomes as more important than the reasoning behind them.
But outcomes are noisy.
A good decision can lead to a bad result.
A bad decision can temporarily lead to success.
That is the illusion of result-based thinking.
Life is a series of bets
In the book Thinking in Bets, Annie Duke — a former professional poker champion — writes that every decision is a bet.
When you choose a career, invest money, hire someone, start a business, or even respond to a conflict, you are making a bet under uncertainty. You are choosing the option that appears to offer the best possible outcome based on the information available at that moment.
And life itself is simply the accumulation of those decisions.
The problem is that most people want certainty before making decisions. We want guarantees. We want to know the future before acting.
But certainty rarely exists.
Annie Duke puts it this way:
“The quality of our lives is the sum of decision quality plus luck.”
Luck is not merely blind randomness. It interacts with the decisions we make.
A decision to join a small but promising company may completely change your career trajectory.
A decision to attend a networking event may lead you to a future business partner, mentor, or spouse.
Even buying a lottery ticket technically increases your probability of winning compared to never participating at all.
Luck matters in all these outcomes. But decisions determine whether you place yourself in the path of opportunity in the first place.
As it’s said in the Bible:
“Ask and it will be given to you; seek and you will find; knock and the door will be opened to you.”
— Matthew 7:7
The danger of outcome bias
One of the most common thinking errors is outcome bias — judging the quality of a decision purely by its result.
Bad outcome = bad decision.
Good outcome = good decision.
But reality is far messier than that.
There are countless variables influencing outcomes, many of which are outside our control. Yet modern society constantly trains us to worship results.
We celebrate successful investors before understanding whether their process was repeatable.
We criticize failed leaders before asking whether their decisions were actually reasonable under uncertainty.
The dangerous thing about luck is not just that it exists.
It’s that luck can temporarily reward bad decisions and punish good ones.
Over time, this distorts how people learn.
Some become overconfident because reckless behavior happened to work. Others become discouraged despite making disciplined choices.
Annie Duke often shares a famous story from her poker career to illustrate this.
In a major tournament, she held a hand with an 82% probability of winning against her opponent.
But she lost.
Afterward, frustrated by the “bad beat,” she vented to fellow poker professional Erik Seidel.
Instead of sympathizing, he challenged her perspective.
Why focus on the 18% chance that failed instead of the 82% decision that was correct?
That question changed how she viewed decision-making.
She realized losing the hand did not mean she played poorly — just as winning would not necessarily prove she played well.
The quality of a decision should be judged by the process and reasoning behind it, not by whether luck happened to cooperate afterward.
The hidden variables we never see
Her story reminded me of an experience I faced several years ago at work.
We developed a new overseas supplier for a new product. We conducted extensive due diligence — audited the factory, reviewed financial stability, checked operational capability, and verified references.
Everything progressed smoothly.
Then, one week before the expected delivery date, the supplier informed us they could not ship the materials.
Worse, they could not even confirm when delivery would happen.
The reason was something we never anticipated:
An internal political conflict within the organization had disrupted operations entirely.
That experience taught me an uncomfortable truth about decision-making:
Reality always contains hidden variables we cannot fully see.
No matter how rigorous the analysis is, uncertainty never disappears completely.
So does the bad outcome mean we made the wrong decision?
Not necessarily.
And looking back at my friend’s 1,000% investment return, does the extraordinary outcome automatically prove exceptional skill?
Not necessarily either.
Thinking in probabilities
Humans naturally crave certainty because uncertainty feels psychologically uncomfortable.
We prefer simple narratives:
Success means competence.
Failure means incompetence.
Winning proves intelligence.
Losing proves mistakes.
But probabilistic thinking requires a different mindset.
Instead of asking:
“Will this decision guarantee success?”
We should ask:
“Given what I know now, is this the decision with the best odds?”
A single investment tells you very little about whether you are a good investor.
A single hire tells you very little about whether you are good at assessing talent.
A single negotiation tells you very little about whether your strategy works.
But across dozens or hundreds of decisions, patterns begin to emerge.
Good processes tend to outperform poor ones over time — even though individual outcomes can still fail.
This is the difficult emotional challenge of decision-making.
Result-based thinking is emotionally comforting because it creates the illusion that life is fully controllable.
If good outcomes always came from good decisions, the world would feel predictable and fair.
But reality does not work that way.
Sometimes disciplined people fail.
Sometimes reckless people succeed.
Accepting this uncertainty requires humility.
It forces us to separate our identity from individual outcomes and focus instead on the quality of our thinking.
Because over the long run, life does not reward people who are always right.
It rewards people who can make thoughtful decisions without demanding certainty.
People who can stay disciplined when luck turns against them.
And people humble enough to know that a good outcome does not always prove wisdom — just as a bad outcome does not always prove failure.
Till next week!
Cheers,
Do Thi Dieu Thuong