Monday, July 30, 2007

How's the Gambling Going?

When non-poker playing people inquire about my career they'll usually ask me something like:

"How's the gambling going?"

Or the inquisitive:

"Have you been lucky lately?"

I also get wisdom like:

"It can all change on the turn of a card."

This last metaphor rubs me the wrong way because obviously ALL of life can change on the turn of a card. Not just poker. You wake up in the morning and feel a lump. The phone rings in the middle of the night. A tire blows out on the highway. Etc.

Poker actually feels much more predictable to me than life. In poker every time I make a decision I have true percentages and real odds from which to base it.

That's probably not true with many investments. Exact odds? How much will a stock go up? So much of the financial world is subjective. If the advice could be given objectively then no one would ever lose money in the stock market.

But in poker when I can put my opponent on an exact hand then I know my exact odds of winning. And the way I see it that's not gambling.

If I am armed with information of how often I will win then each situation that arises can only be considered either a good or bad investment opportunity.

There is no luck. There is no gambling. Just good and bad opportunities.

I'd like to talk about two such business opportunities from this weekend at the Wynn.

In the first one I held pocket queens and limped under the gun. Loose guy on the button raises to 30 and I call. Flop comes 8 high flop and he pushes all in.

It's the same hand we see all the time. I've got to figure out if my overpair is good. It's always a tough spot. You feel dumb if you fold it and it's the best hand. But after you've played the game awhile you feel even dumber when you call and your opponent shows you two pair or a set.

I thought it through.

I decided to trust my read. I also concluded that he was the type of player who would check here if he had actually flopped a set.

So I called and turned over my queens. He looked at them and grimaced.

Good for me.

I just had to survive two cards.

The dealer put a 10 down on the turn. And my opponent suddenly got all happy.

Then the dealer puts another 10 on the river. Now my opponent starts getting really happy.

Runner runner 10's for quads.

Instead of me taking his stack, he takes mine.

When he pushed all in on the flop and I called I was 91.62% to win the hand.

But I lost.

What can I say? I loved that situation. It just didn't work out.

I don't see getting my money in as a huge favorite as gambling. I felt real good at 91.62% to win. Obviously I would do that again and again. And if I kept losing then I'd just have to lose my money. I felt strongly that I was ahead when my chips went in. That was the result of my working hard for hours waiting for that specific situation and then trying to get as much money in the middle as possible.

For me gambling is reraising all in with a draw. I'm gambling that the other player folds. And if he calls me I'm gambling I hit my draw.

But for me to get all my chips in when I've trapped someone isn't gambling. It's me working.

Backing something that is 91.62% is not gambling. It's damn good investing.

After losing my stack I rebought. I wasn't hitting too much. I made a couple of decent river calls to stay afloat. Doing this gives me more satisfaction than flopping the nuts and winning a big pot. Particularly when I call down someone with bottom pair because I think they're trying to buy the pot. It's not so much about catching someone in a lie. It's more about having the courage to trust my read and call someones over bet in a spot where I could look (and feel) really dumb if they show me the winner.

If they show me top pair then I'm an idiot for calling them down. When they show me Ace high I'm a genius for calling them down. Lately I've been surprised how often these river calls are correct.

I chased a few times with the nut flush draw in multi way pots but did not hit.

I snuck in a few times with small pairs but hit no sets.

And then I had my second big hand of the day. The only other time besides the pocket queens that I was all in. My second big investment opportunity.

It began with me limping in with 5 8 suited in middle position. A woman in late position raised to 25.

By the way there were three women at my table. Two of them were dealers playing on their off day. And the third woman was a rounder. One guy made a joke about how we needed one more woman to "even it out" (since there were four men) and one of the woman dealers says "No more women. There are already too many here. I'd rather play with men." I loved how she wants to avoid other women. Almost like pros avoiding each other in pots at these tables.

After she made it 25 there were 4 callers so I called the extra 20 and saw the flop with my 5 8.

Flop comes 4,6,7.

I flop the straight.

The small blind leads out for $50 with pocket 10's. Amazingly the guy to my right calls.

I'm in an interesting spot. Normally I'd absolutely raise here to charge draws and protect my hand. But I only have a couple of hundred and at this point my stack is not getting anyone to fold.

My smallish stack also means I can stomach playing this hand to the end. If I have a grand in front of me and a third diamond hits on the turn then I probably gotta fold to a big bet. But not with my stack.

If I push all in the woman to my left probably folds. So I actually call here hoping that she either calls the 50 or raises. And if she doesn't raise then I'm just going to get the rest of my chips in on the turn. At this very moment I'm 90.71% against the pocket 10's in the small blind.

A 6 comes out on the turn and it's definitely a scary card. If either guy had flopped a set then he just hit a full house or quads and I'm drawing dead.

Suddenly I'm real happy not to have more money on the table. The small blind leads out for $75.
Incredibly the guy to his left and my right smooth calls again!

I don't think either one has a full house but like I said I'm too short to worry. I push all in and they both call.

Here's the crazy thing. Even though the board paired the 6's I am still a very solid 90.91% to win against the pocket 10's. My odds of winning this hand have actually increased since the flop.

The small blind has 4 outs with his 10's. He needs one of the two 10's to hit. Or he needs one of the two remaining 6's to hit. Otherwise this pot is mine.

And the dealer turns over a 10. Double damn.

I'm defying all sorts of math. It's pretty hard to lose back to back all ins where I'm over 90%.

It's pretty sick. Yet from what I've seen at the poker table on a daily basis it's almost expected.

I stand by what I wrote up top. These hands do not feel like "gambling."

Yes losing twice as a 90% favorite is bad luck. Kind of like getting struck by lightning.

However my job at the poker table is to do exactly what I did. I sit there for hours and find spots to get all my chips in when I have the best of it. And I did that twice on Saturday to perfection.

I should be celebrating.

This was tough mentally because I played some really good poker this weekend.

My decisions were correct. That should be all that matters.

But instead because of the results I feel like I did something wrong.

Life is funny. Just think how I was 90% probable to have a great Sunday.


Check Raise Chin said...

That really sucks Rob.

I'm pretty amazed that the guy called with pocket 10s even after the board paired up. What did the other guy have?

I think people just don't know how to lay down decent hands (or any hand for that matter) but I guess that's how you reap the rewards in the long run.

Keep up the good work!

Candies said...

this is a fascinating post. Without question I think what you do is a job, and is not 'gambling' proper. However, I think I can address the issue somewhat since I have often defended your career choice to people who accuse you of being a gambler...

Their logic has nothing to do with the working aspect of card-playing, or the fact that you are playing math and odds on any given hand. While some people think poker is simply gambling because it's done in the same locations as slots and craps, we'll ignore their arguments for now since they don't get the details of the game...

But for many people, a career playing poker is gambling because you can LOSE money at it, whereas in a normal job you put in a hour and there is very little chance you'll lose $.

It's easy to see the flaws in this line of reasoning...maybe you don't get paid, maybe you get fired, maybe you're losing money at a salaried job every moment due to the opportunity cost of not being at a higher paying job. However, for someone who works 9-5, they see this as a very small chance of happening (less than 1% every day), whereas for you there is a higher chance of walking away down any given day. Thus, the career choice, overall for them, is considered gambling.

Would love to see a post speaking to this point...meaning, not examining the details of the job as gambling or not, but rather the career choice. For my money, all careers are a don't know if you're going to be happy, wealthy, or dead when you decide to be a lawyer, firefighter, or poker player. But, based on what you've seen in the vegas year, what are the odds of having a successful (and that's a nebulous word) career as a poker player?

Joe said...

I decided 10 years ago, that I was not going to work for a big company. I know that I would loose my mind. My decision to work for myself has afforded me privileges on which I can’t put a price. I get to go to long lunches. I take naps every day. I vacation when I want. I would not have it any other way. I would otherwise be unhappy.

As a principal in a small business I often wonder if I gamble for a living. (I am responsible for the decisions alone, but it affects our company, so my voice changes) One phone call from the wrong customer canceling an order and we are done. I am busted. If a competitor releases a new product that make us obsolete, and I am looking for new work.

At my company we are confronted with business decisions that take longer to play out than a hand of cards. However, they are equally as chancy. I have to decide:

· Do I hunt for big game, or do I try to get lots of small orders from lots of small customers?
· This guy can only buy if I extend this customer credit terms. Do I go out on the hook for him or just muck this customer?
· One of our competitors just lowered their pricing, should we join them or stand tall and convince our customers that we are worth the premium?
· Cash flow is king. Bbut no one waits 60 days for product any more. How much stock should I have on site?

The above are all arbitrary questions; in the spirit of the blog let me give you a specific call that I have to make today. There is company out of Chicago that could be a monumental client for us. They could double our sales. I should get on a plane, buy them lunch, and press palms. However, the money to fly cross-country and feed these fellas comes directly out of my pocket. Should I spend the money to advance the sale?

I have asked all the right questions to qualify them. I know they can pay for the equipment. I know that I am in the right price range. I am certain they have adequate customers to place the equipment. I am certain they have a sales force that is capable of selling and installing our equipment. All signs point to be playing this hand.

I could walk in to the meeting and find that I have been reading these guys totally wrong. Maybe they are a completely different company than what my instincts tell me. I end up having meet the wrong player and I have flushed my money down the drain.

So when I fly to Chicago to meet the pot that could make my year, wish me luck.

ckbluffer said...

Candies started a pretty interesting discussion in comment land. I made a temporary career "detour" into playing poker for a living last summer. I was pretty sure that it would be for the short-term (had already lined up another job), but if I could have built a big enough bankroll to weather the vagaries of the game, I would have had to make a tough decision as to whether or not I would re-enter the corporate world.

This is what I learned. Risk tolerance varies a lot depending on the person. I have a relatively high tolerance for risk when it comes to short-term fluctuations (e.g., one session of poker, or a couple of sessions of poker spaced out over a bit of time), but an overall relatively low tolerance for risk when taking a long-term view.

The "comfort" factor comes into play as well. Given your own personal lifestyle, what amount of money would you have to make playing poker to allow you a "comfortable" living? Again, this can vary dramatically by individual.

How good of a player are you, and what does that mean in terms of your ability to increase your playing abilities and move to higher limits where the reward can be so much higher (but coupled with a larger downside risk).

At the end of the day, I realized that I would not be able to stomach the bad days over an extended period of time. I wanted to have certainty in my income. I also wanted to maintain a certain level of income. Coupled with the fact that I'm an average player on a good day, and am only comfortable playing at certain limits, the career choice was easy for me.

But . . . if you are a solid player who knows how to manage the mental wear and tear and intermittent monetary wear and tear, there's money out there to be made. Even more money than a corporate lawyer like me could ever make. I don't think it's gambling (negative connotation attached). It's finding your passion, and finding a way to make a living doing it.

P.S. I used to be an investment banker, and those guys make and lose money all the time. Often at vastly higher stakes than what you'd see for the average poker player. Yeah, they're playing with other peoples' money, but those fat banker bonuses at the end of the year are largely dependent on their ability to "choose right" in the markets. And with the markets tanking over the past couple of weeks, those bankers stand to lose a significant amount of money.

Check Raise Chin said...

Poker as in life, it's about timing, making the right decisions at the right time and rolling the dice when you have to if you want to win big. Sometimes it's unfair.

Case in point...I was playing this cash game on Saturday....I had 88 another guy had 77 and the third guy entered the pot with A9 suited. We all were in for pretty decent pot $300-$400.

Long story short:

The board eventually comes out QQQ99. The guy with A/9 got screwed b/c he had the best hand by the turn but the river gave everybody a chopped pot. Most times guys are rooting for their 2 outers to hit, this guy was hoping for anything BUT his two outs to hit and it hits.

Poker is a funny game sometimes.

dave said...

Nice comments on this post. Rob, you must have touched a nerve.

I do love that we get these long, heartfelt replies, and then Chin brings it right back to a bad beat story. Even if it wasnt his bad beat.

FreeFormCoder said...

What it boils down to is this: a poker player is in effect a small (or potentially large) businessman, and needs to make the same kind of considerations that Joe has to make in dealing with a potential client. The only difference is, the clients of a poker player are a constantly changing set of guys wearing backwards baseball caps.

Margins are margins. A poker player understands this. Gambling is when your margin is a fantasy, because you're playing an unwinnable game.

dave said...

Well, there is one other thing that most people realize.

Even when you win at casino games, you lose. They pay you less than the odds of winning the bet when you win.

The example is roulette. It is 39 to 1, I think, to hit any specific number. Yet the casino will pay you 36 to 1.

Do you, as the individual, care? No, you just hit 6 BABY!!!!

But over the long-term, the casino is winning even off the winners.

It is a pretty amazing system.