Tuesday, May 31, 2005

maxi fall in mini steps

It happened.

4th level, AA early with re-raise cracked by JQo lp all in, jack on flop and at the river. Back to level one. This was lots of play for a few bucks, but I still have reservations on the odds of not being sucked out over 5 separate games. Maybe I should have mucked the AA and waited till latter after the JQo types blew out to try and move. I have since played level one twice, still paying no additional money, but getting sucked out on with regularity. As I have time I'll try again. Lots of trny play for the money, but I can earn bucks at NL ring games. Hmmm

I guess that proves I play for fun.

I posted a snippet from a book written in 1521 in another of my blogs. The words spoken by miss Peace could just as easily have been applied to steaming at finance or poker. War is seldom justifiable, war is very frequently just a nation's leaders on tilt. It is poignant that beautiful language can carry so sharp a sword.

Could this be a definition of tilt: (ego + pride)( aggression) = madness?

My reservation fell through for downtown this weekend; that's what I get for using an unknown online booking agent. They offered me another suite for three times the cost; that hit me in the (ego+pride), I refused. I have waited too long to get anything worthwhile for Fri/Sat nights. I will still drive up for the tourney and see if I can call in a comp or two. I don't want to miss meeting some of these poker bloggers I've been reading.


Tuesday, May 24, 2005

Blogger Tourney

Against all odds I'm on for the June 4th Trny.

I haven't been playing while I'm setting up BFU, but I gottta see the other nuts that write about the pleasure and pain of full contact poker.

I'll be staying downtown, and playin' a bit there, then heading for the Aladdin to meet the wild bunch.

Its a great sport.

This is gonna be a weekend to remember.

I've just gotta try to remember how to play. Hmmm, a pair of Jacks is an average hand after the flop.

OK, I'm ready.

I'll let ya know the (gruesome) details after.....


Thursday, May 19, 2005

Delay of game

With only a bit of time for creative stuff, both this blog and my poker playing have suffered.

Priorities require me to spend more time gettin' BFU going. I've started a blog for Bastiat Free University to keep folks updated on progress to our Grand Opening, June 29, 2005.

I'm still in the Full Tilt WSOP playoff June 19, that may be the extent of my play for a while.

It is nice when you have to make a choice between pleasant alternatives.

Thanks for reading, you can hook up to the RSS/atom feed if you want to know when things start moving around here again.


Spike it on the flop for me!

Play it aggressive for yourself.


Sunday, May 15, 2005

Ya ain't alone

Supposedly when Pierre Salanger came into President Kennedy's office, Kennedy asked "Is it good news or bad news?" Salanger replied " there is no good news, but there is bad news that isn't our fault; the Aswan dam is leaking."

If you are fighting yourself at the poker tables, here is some bad news for others that isn't your fault. From the Econo Log at LLO:

Four Bad Role Models, May 12, 2005

by Bryan Caplan

Some Nobel prize-winning economists keep investing foolishly even though they know better, according to a recent L.A. Times article. Here are their statements, ordered from bad to worse:

  • Harry Markowitz, father of modern portfolio theory, put half of his assets in stocks and half in low-risk assets. Now he says "In retrospect, it would have been better to have been more in stocks when I was younger." OK, maybe the equity premium puzzle had yet to be discovered.
  • Clive Granger: "I would rather spend my time enjoying my income than bothering about investments." Isn't there some connection between the two?
  • Daniel Kahneman is more culpable: "I think very little about my retirement savings, because I know that thinking could make me poorer or more miserable or both."
  • But George Akerlof aggressively seizes the booby prize. He apparently keeps his wealth in money market funds and the like. His justification? Less than zero: "I know it's utterly stupid."

    The whole article reminds me of a quote I wrongly attributed to Einstein instead of Thomas Szasz: "Clear thinking requires courage rather than intelligence." It's sad that such eminent economists know the smart thing to do but fail to follow through.

  • See, ya ain't alone. Overall, these guys have not done so well advising others either, but they are willing to take your money to tell you what to do; or to teach a class full of math on how things economic work. The key would seem to be the courage to use knowledge, and maybe realize we don't know as much as we think we do.

    Now, what we need at the poker table seems to be the courage to .....


    Friday, May 13, 2005

    old data, and a fad's resilience

    I have a confession to make, I collect books on finance written in the time period of the last depression. Before, during and just as it was ending. What brought this to mind is Bob Prechter has written a piece in the pay section of his site, "The stock market is not physics." He lays out how dangerous it has been to just project trends to guess the future. As he said a proper answer when asked about the future is usually "I don't know."

    One of my favorite books was written in 1935 by the American Institute of banking, "Corporation Finance and Investments, Investments II" The forward says, "Investments II seeks to present the lessons learned from the financial errors of the period before 1929."

    What I love is the centerfold. A meticulously drawn, 6 fold chart, proving the only proper investment for serious money managers is in.... drum roll please,,,, railroad bonds. "As a result of the depression of 1920 the banks of this country learned to place the basis of their commercial credit analysis on a scientific basis." The banks were "scientific" prior to 1929, and had the recently created, private, scientific assistance of the Federal Reserve there to help them. I would note that scientific seems to be a word associated with depression; just as Federal Reserve is associated with debased currency. Before we got 'scientific' we had short, severe 'panics' mainly effecting the finance sector, not depressions effecting the whole economy; and the dollar's value was the same after the panic as when the panic started.

    And now, having said how stupid it is to project the future, I'll take a shot. I have a bit of long term history to guide me. As Mark Twain said, history does not repeat, it rhymes. Projecting the future from the recent past is lazy and crazy; but recognizing patterns in history may provide a nice, vague, clue.

    We have just finishing a historic raise in indebtedness and the seeking of instant gratification. We are entering the next depression that may be greater than the last depression. And so I will take a shot at the question foremost in all of your minds.

    What will happen to poker?

    Poker has been a fad borne of liquidity, meaning easy money, and of the wonderful exuberance at the peak of the markets. Yes, poker will survive. No it's wave will not crest to die on the beach. But like in the panics and depressions of the past, the arrogance and hubris of our age will vanish as society puts on a veneer of respectability. Our games will once again be relegated to back rooms.

    When will this happen? The only proper answer is, I don't know.


    Monday, May 09, 2005


    Here is a valuable insight from the Elliott wave's Robert Folsom in today's Market Watch:

    "If a writer knows enough about what he is writing about, he may omit things that he knows. The dignity of movement of an iceberg is due to only one ninth of it being above water."

    "Poor Faulkner. Does he really think big emotions come from big words? He thinks I don't know the ten-dollar words. I know them all right. But there are older and simpler and better words, and those are the ones I use."

    "All our words from loose using have lost their edge."

    These quotes belong to Ernest Hemingway, who put more than an edge on the words he used. While I’m at it, here’s related thought from Truman Capote, a fellow whose prose wasn’t bad either:

    "I believe more in the scissors than I do in the pencil."

    If you appreciate writing that doesn't waste a word, Hemingway and Capote are a delight, as are authors such as E.B. White, Orwell, and C.S. Lewis.

    I can also tell you where you will not find fat-free prose: Namely among the highest-scoring SAT essays written by students who take the revised SAT exam.

    When asked how students should prepare for this essay, the professor who directs undergraduate writing at M.I.T. did not say a word about grammar, style, or accuracy: "I would advise writing as long as possible, and include lots of facts, even if they're made up."

    Now, don't get mad at this professor – he doesn't like it either: "It's exactly what we don't want to teach our kids." Yet the New York Times reports that after the professor "looked at the 15 samples… that the College Board distributed to schools nationwide," "reviewed the 23 graded essays on the College Board Web site… and the 16 'anchor' samples the College Board used to train graders," he bluntly concluded that the longer the essay the better the score: "I have never found a quantifiable predictor in 25 years of grading that was anywhere near as strong as this one. "

    What's more, after he saw that long essays could be rife with factual errors and still get a top score, he checked the official guide for scorers. It said, "You are scoring the writing, and not the correctness of facts."

    This revised approach to writing in the SAT exam began this year, though it was announced in 2003.

    What's this got to do with finance and investing? Put simply, "fuzziness" and "dullness of focus" come with the negative mood of a bear market, whereas clarity and sharp focus reflect a bull market. The psychology is real, and observable, and large enough to show up in countless places -- from the stock market to student essays."

    What has this to do with poker? When you are on a big run it is just as easy to let yourself get stinkin' thinkin' and loosen up as it is for the masses to think they are geniuses and borrow against their house to invest when they market is going up.

    the Socionomics book, on the right margin of this page, is all about the congruence of waves in life; observation of the crowd's mood as an indicator of future actions; and is an interesting read. Our little poker fad is probably one of the current waves. If you want to study Elliott Wave for free, and not buy the book, peruse the free tutorial at their club EWI site. The tutorial is more investment oriented, but still very interesting.

    You have seen how skirts getting shorter or ties getting wider, or rock getting raunchier, or movies getting more violent, or banks getting aggresive, or.... reflects the social mood. Study the interaction on the macro social level, apply to your micro environment; and back again.

    I need better scissors.


    Friday, May 06, 2005

    Play your percentages

    Ok, the title is a bit misleading. What I want to talk about is a subject that seems to be misunderstood both in finance and poker. I'll use simple numbers and rounding, check the figures more precisely if you wish. Playing with interest and percentages can be misleading, and a con game for some. Figures don't lie, but liars sure can figure.

    You lost 50% of your bankroll. It was over three sessions, years or months, 30% in one big hit, then 10% in two less painful hits. Sadly it ain't that easy, although in this example the pain is diminished compared to a single 50% hit. Lets use 200 as your starting bankroll.

    30% of 200 is 60, you were down to 140; 10 % of 140 is 14 you now have 126; 10% of 126 is about 13, you now have 113. That's a total loss of 87 from the original 200, or about 43%, not 50%; you are a bit better off than you thought.

    I've heard economists on TV say things like "This market was down 20% last year, but we are up 20% so far this year and are even again." Not counting inflation and the lost opportunity costs of the year, and not knowing how he calculated the 20%, he is still wrong. A simple 20% loss from 200 is 40, leaving 160. A 20% gain on the 160 you had left is 32, you now have 192 and are not yet even. You would have needed a 25% gain on 160 to be back at the 200 where you started.

    If you lose 50% of your bankroll in a bad run on the tables, you will need a 100% gain on your remaining roll to get back to even. If you goal is to push your 200 to 600 so you have the cash available to play bigger; an equal win or loss is not equal. If you lose 100, or 50% of your roll, you now have to double through with a 100% gain to get back where you started. If you gain 100, or 50% pushing your starting roll up to 300, a subsequent loss of 50% puts you back smaller than you started at 150.

    Be cautious moving up in size, too soon and the bigger hits can drain you quickly.

    Perhaps next blog: Optimization hinders evolution.

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