3. How do I act?
3.2.1 · 35–55 minutes · reflect, test, discuss, review
3. How do I act?
Explore this area: How do I act?
3. How do I act?
Likierman elements: Choice + Delivery
Choose among realistic alternatives, check feasibility and learn from a dated record.
Build the choice before selecting it
Do not accept a forced choice between invest immediately and miss out forever. Consider investigating, waiting, declining or pursuing an alternative, with their opportunity costs. Decide what objective and constraints matter before judging the options. A group should hear independent views before the most confident speaker sets the direction. Your conclusion needs reasons, not merely a vote or a list of pros and cons.
Check delivery and ownership
Delivery asks whether an action can actually be carried out. In a hypothetical investing case this includes resources, liquidity, timing, access, costs and who will perform the research and review. A paper valuation alone does not make an action feasible. Name the next task, owner and deadline; define what evidence would prompt review. Do not confuse this delivery check with a guarantee that the market outcome will be favourable.
Area workshop · How do I act?
The fictional committee can investigate one of three opportunities before Friday. DailyCup requires eight analyst-hours, but the team has four. Compare at least three feasible responses, nominate a research owner and identify the evidence that must be checked before a recommendation.
Make your own attempt before opening feedback.
Area workshop model response
Possible responses include narrowing a genuinely useful first-stage check, postponing the decision or researching an alternative that fits the available time. Explain the trade-off and what a reduced check cannot establish. Assign a named role and deadline, document unresolved questions and avoid pretending four hours delivers eight hours of work. Review outcomes later against the original process.
Private reflection: Did I expand the options, respect the constraints and follow through? What did the outcome teach without rewriting what I knew then?
Likierman · six elements explained by London Business School
Public LBS explanation checked on 1 November 2026. Six elements are attributed to Sir Andrew Likierman; the three-area grouping and investing exercises are On Judgement adaptations, not his published model or an endorsement.
Andrew Likierman · Judgement at Work: Making Better Choices
Publisher book page. The full book has not been reviewed; teaching uses the publicly explained six-element framework with original examples.
What you will learn
- Distinguish the quality of a process from a single result.
- Recognise resulting and hindsight in a review.
- Use outcomes to learn without rewriting history.
3.2 · The Human Side
The Human Side
The Human Side · the work you will do
- 1What do I know?
- 2What influences me?
- 3How do I act?
- 4Record and review
Before you begin
Your first decision
Two students present fictional investments. You check the evidence and explain the risks; an unexpected disruption still produces a loss. Your friend follows a rumour and benefits from a lucky takeover. Whose method would you choose for the next decision?
Record your first answer before continuing.
Strong process · good outcome
Check repeatability; retain what worked without assuming certainty.
Strong process · bad outcome
Inspect new information, acknowledged risks and avoidable gaps.
Weak process · good outcome
Investigate luck; do not copy an unsupported method blindly.
Weak process · bad outcome
Identify actionable errors without hindsight rewriting.
Video coming soon · about 4 minutes
Good Decision, Bad Outcome
Use the narration below while the recording is being made, then try the decisions in this lesson.
Read the full narration
Two students present fictional investments. You check the evidence and explain the risks; an unexpected disruption still produces a loss. Your friend follows a rumour and benefits from a lucky takeover. Whose method would you choose for the next decision?
In this lesson, notice what affects your own judgement. You do not need to invest real money or share personal financial information.
First ask what happened. Then ask whether the choice was well supported when it was made. Annie Duke calls judging a decision mainly by its result “resulting”. If luck helped a weak idea, repeating the method could still be costly. If a sensible idea lost money, you still need to investigate what happened.
Find the dated evidence, assumptions and alternatives in your original decision record. What warning was available but missed? What was genuinely new? Once you know the ending, it can seem much more predictable than it felt beforehand. Your written record makes it harder to replace your first view with a better-looking memory.
Suppose your analysis allows a downside and still favours the investment. Seeing that downside does not automatically prove the analysis was wrong. But a positive expected value is not enough on its own: the owner must be able to bear the loss, meet cash needs and manage concentration. Challenge how credible the probabilities and scenarios were.
Ask what you would repeat and what you would change after both success and failure. Was the research sound? Was the action delivered as planned? Did the evidence change? “Bad luck” should not excuse every loss, and a winning streak should not end the questions. Choose one process improvement that the evidence supports.
Pause for the worked example and the choices. Use the feedback to improve the explanation, then apply it to the fictional case. Keep your first view as well as any revision.
Think of a decision whose outcome changed how you judged it. Without disclosing anything personal, explain what a fair review would check in the original reasoning.
A good result can teach the wrong lesson
First ask what happened. Then ask whether the choice was well supported when it was made.
Annie Duke calls judging a decision mainly by its result “resulting”. If luck helped a weak idea, repeating the method could still be costly. If a sensible idea lost money, you still need to investigate what happened.
Research and nuance
Ask what happened and whether the decision was well supported when made. These are related but different questions. Annie Duke uses resulting to describe judging a decision too tightly by its outcome. A good result does not erase weak research; a bad one does not establish that no reasonable person could have chosen the action. This distinction supports learning without treating outcomes as irrelevant.
Read what you wrote before you knew
Find the dated evidence, assumptions and alternatives in your original decision record. What warning was available but missed?
What was genuinely new? Once you know the ending, it can seem much more predictable than it felt beforehand. Your written record makes it harder to replace your first view with a better-looking memory.
Research and nuance
Use the dated memo, sources, alternatives and constraints available at the time. Identify facts that were missed despite being accessible, and surprises that were not reasonably predictable. Hindsight can make an outcome feel more inevitable after it occurs. A fair review checks what the record actually said rather than relying on a confident memory of having known the answer all along.
A probability is not a guarantee
Suppose your analysis allows a downside and still favours the investment. Seeing that downside does not automatically prove the analysis was wrong.
But a positive expected value is not enough on its own: the owner must be able to bear the loss, meet cash needs and manage concentration. Challenge how credible the probabilities and scenarios were.
Research and nuance
A forecast can allow an adverse result and still favour an action on its stated assumptions. That is not permission to take any risk with positive expected value. Loss capacity, liquidity, concentration and the reliability of probabilities matter. Distinguish a weak implementation or ignored warning from an adverse event already acknowledged in a defensible scenario set.
Review the lucky win as well
Ask what you would repeat and what you would change after both success and failure. Was the research sound? Was the action delivered as planned?
Did the evidence change? “Bad luck” should not excuse every loss, and a winning streak should not end the questions. Choose one process improvement that the evidence supports.
Research and nuance
Review a lucky success as carefully as an unlucky loss. Over repeated decisions, examine whether assumptions, implementation and confidence match evidence and results. A process can be improved even when a decision was reasonable. Do not use “bad luck” to dismiss every failure, or a winning streak to avoid scrutiny. Specify the change you would make next time and the evidence behind it.
Expected return and a possible loss
An invented one-period illustration assigns 80% probability to a 10% return and 20% to a 20% loss, with no other outcomes or costs. Treat the probabilities as supplied assumptions, not measured market estimates.
- Expected return=.80×10%+.20×(−20%)=4%.
- The model still gives a 20% chance of the stated loss.
- A single−20% result is compatible with the supplied model, though it should still prompt a review of assumptions and execution.
A positive expected return does not show that the investment suits an owner unable to tolerate the loss. One realised result alone cannot validate the probabilities either.
Put it into practice
1. Score before reveal
Read two fictional processes: A verifies sources and records downside; B uses an unverified rumour. Score evidence, alternatives and risk before revealing A lost and B gained.
Write your response in your workbook before opening feedback.
Compare with a model response
Keep the process assessment grounded in the original information. Then examine what the outcomes teach; do not automatically reverse the scores because luck differed.
2. Repair a review
Rewrite “we lost, therefore the analyst was incompetent” and “we won, therefore repeat the method”.
Write your response in your workbook before opening feedback.
Compare with a model response
Identify the thesis, accessible evidence, risk controls and implementation. A loss may reveal an error or an acknowledged risk; a gain may reflect skill or favourable surprise. Give a specific test rather than a verdict from outcome alone.
3. Improve a sound process
Suggest one improvement even if A’s decision was reasonable.
Write your response in your workbook before opening feedback.
Compare with a model response
A clearer trigger, better source coverage or more explicit loss-capacity check may improve future decisions. Explain why it was feasible then; avoid demanding knowledge learned only afterward.
Notice your own judgement
Think of a decision whose outcome changed how you judged it. Without disclosing anything personal, explain what a fair review would check in the original reasoning.
Original On Judgement teaching. Research and further reading: Likierman; Duke; Yale teaching.
Jargon buster
Resulting
Using an outcome too strongly as the verdict on the preceding decision.
Hindsight
Seeing a known outcome as more predictable than it was beforehand.
Process quality
How well evidence, alternatives and constraints informed the decision.
Expected return
The probability-weighted mean under specified assumptions.
Luck
Outcome variation not fully controlled by the decision process.
Knowable
Information reasonably accessible at the relevant time.
Knowledge check
Make each choice on the page. Feedback explains the reasoning. Use Try again after revisiting an idea.
AQA connection and further reading
AQA 7138 applied links: AO 2–AO 4 evidence, analysis and evaluation (4.2); uncertainty and change (3.3.4), with quantitative interpretation in Annex 6 where used. Named psychological effects and calibration methods are investing enrichment, not specified AQA content. Classroom exercises illustrate processes; they do not diagnose individual traits.
AQA 7138 specification
Primary curriculum reference; links and original classroom rubrics are interpretive, not endorsement.
Likierman · six elements explained by London Business School
Public LBS explanation checked on 1 November 2026. Six elements are attributed to Sir Andrew Likierman; the three-area grouping and investing exercises are On Judgement adaptations, not his published model or an endorsement.
Andrew Likierman · Judgement at Work: Making Better Choices
Publisher book page. The full book has not been reviewed; teaching uses the publicly explained six-element framework with original examples.
Annie Duke · process and resulting interview
Author-hosted discussion informs the short attribution of resulting. Analyst cases and process tools here are original.
Understand yourself as an investor
Compare your process assessment before and after the outcome reveal. What changed, and was that change justified by new evidence?
Keep this reflection private unless you choose to share. Use evidence from the fictional exercise; no personal finances or fixed investor-personality label is required.
Take forward
Distinguish the quality of a process from a single result. Recognise resulting and hindsight in a review. Use outcomes to learn without rewriting history.