Science of poker

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There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact. Mark Twain

Poker, like investments, is about people. In the great book Confessions of a Stock Operator, a biographical tale told as a novel to protect the author, there is a story about the markets after the great San Francisco earthquake. It has been a few years since my last read of the book, so you will have to put up with generalities as I stumble to the point.

The market was in a bull phase, with everything going up; the stock in a West Coast railroad climbed with the market. The Author shorted the stock, and it kept going up, he was losing money, but he shorted more, it kept going up. The author couldn't see how losing huge amounts of their infrastructure could be good for the company, so he kept shorting. His friends warned him not to fight the market, he was losing lots of money, he kept shorting. One morning the stock went down, and kept going down, he made his money back, and gobs extra. Being right will pay, long term. In this case I think it was 3 very long days. If it had taken a week longer he may have "got broke."

What Happened? The markets, like the players at a poker table, are irrational because they are made up of people. Irrational in the short term. We live in the short term. Reality will always be next week, never this week.

Math, science, statistics; all are important; next week. Today what matters is people, you have to play properly for the for the people at the table, minimize the science. The cards will balance out over the long term, we will win more than players who are less skilled, long term.

Short term, at this table, it is how we play the players that counts.

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