Let Us Play Poker

by admin on October 3, 2007

So you do consider yourself a good poker player? Okay, so what is the significance of this number: 50.1%? How about this number: 42%? Very good, how about this number: 2.1%?
Answers: Chances of getting no pair in a pat hand of 5-card poker. Chances of getting a pair. Finally, the chances of getting 3-of-a-kind.

If you didn't know that, and you considered yourself a semi-decent poker player, then you are such a suck---.... ...such a wonderful pleasant individual that I would like to know you better. Please drop me a line, we'll get together sometime, relax, and play some poker. Bring lots of money.

Most people do not play poker think it's a pretty simple game with a large dollop of luck involved and the skill is in the bluffing and reading of your opponent's poker face. Actually, in the long run, there is very little (none) luck involved and most professional poker players bluff about as often as I pass up on a cinnamon bun from Cobb's bakery. Which is to say, very rarely.

What most professional poker players are good is risk quantification, or processing a number of mathematical probabilities in their heads to determine if they should check, raise, or fold. Very infrequently do professionals, over the long run, deviate from what the odds tell them to do. Unless you enjoy grinding a lot of variables in your head, or paying money top enjoy the social aspects of getting together with the boys to play a few hands, you should stay away from the game.

Um, if you disagree with my previous conclusions so far, maybe we should talk about further. I don't want you to turn away from this blog without reaching some sort of consensus. Perhaps we should get together to discuss these ideas further, over a pint of beer and a game of cards. I'll bring the cards. You bring your pleasant personality, your engaging intellect, and lots of money.

Anyways, back to the essay. Some people like to calculate odds in their head. Some people are very good at calculating odds in real-world situations. These types of people tend to become project managers, among other professions. Project managers know intuitively that if the percentages are in your favor, over the long run, you will be successful, so they tend to be more comfortable with risk & uncertainty than the average manager. Intuitively, they understand that OODA loops are one of their most powerful tools to mitigate risk. They instinctively shy away rookies and gravitate towards the veteran, not because of questions about competency but because of risk assessment capabilities.

Most important, like a poker player, most good project managers won't give up a 1% shift in the odds without fighting, and walk away from the table with -5% shift against them, unless the stakes have been re-negotiated.

I don't know why, but most people don't grasp the importance of a 1-5% shift in odds in a culminative scenario. That is to say, if you do something once, then a 5% shift in the failure/success percentage can perhaps be ignored. But if you are doing something 20 times over, then a 5% swing is HUGE, and even a 1% swing is significant.

Most times, when you point that out to people, they say "Yeah, yeah, yeah, I get it" and then their eyes glaze over as they contemplate their next vacation to Las Vegas or put more money in mutual funds with the 2% administration fee. Or they pass up the chance to renegotiate their personal finance loan from 12% down to 7. I don't think it's an intelligence issue. It's just some (most?) people don't care about culminative impact of the odds. And they never will.

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