Poker and Investing

[Graemsay]

Here's an interesting article on psychology and how hindsight is fooled by randomness, particularly in relation to poker and investing.

http://blogs.telegraph.co.uk/news/t...poker-and-elsewhere-just-one-great-big-bluff/

I probably need to take another read of it, but it looks as though you need to have a better idea of probabilities, rather than being focused on long shots.

 

[redwing]

Interesting where it talks about humans looking for patterns in randomness

Hows this for a gambling loss?

Gambler Lost $127M

Terrance Watanabe was a fixture of the Caesars Palace and Rio casinos in Las Vegas, where in 2007 he went on a year-long gambling binge.

The 52-year-old Omaha man had made a fortune running his family's party-favor import business, and he proceeded to lose much of it, going $127 million in the hole.

His compulsion led him to practically live at the two casinos, sometimes playing roulette and $25 multi-line slot machines for 24 hours straight, or playing three hands of blackjack - each with a $50,000 limit - simultaneously.

At one point, The Daily Mail reported, Watanabe lost $5 million in a single day.

His total bets that year were $825 million - roughly equivalent to the gross domestic product of the British Virgin Islands.

CBS Link

"Someone's gotta win", is an oft touted comment, but more often than not it's the house

Australia is a nation of keen punters – according to recent findings about 70 per cent of Australians participated in some form of gambling in the past year. Gambling takes many forms, including lotteries and ‘scratchies’, electronic gaming machines (‘pokies’), casino-based table games, sports wagering and online gaming.

Latest estimates claim about 115,000 Australians are classified as ‘problem gamblers’ with a further 280,000 people being at ‘moderate risk’. Gambling can seriously affect many aspects of an individual’s life; it can also affect family members, friends and carers.

This title looks at the latest government initiatives to address the negative social and economic impacts of problem gambling, including the regulation of growing access to online gambling. The book also provides detailed advice on dealing with personal gambling issues, including how to identify the warning signs, and where to get help. Can you beat the odds, before they beat you?

Gambling Problems Link

 

[redwing]

Just thinking about Lotto

I heard a comment the other day that you have as much chance winning lotto as placing a thumbtack in the correct area of a marathon track (42.195 km)?

People that play the same numbers each time hoping with each loss that their numbers are certainly due, have no more chance of winning than the last roll of the wheel

 

[pinkboy]

Just thinking about Lotto

I heard a comment the other day that you have as much chance winning lotto as placing a thumbtack in the correct area of a marathon track (42.195 km)?

People that play the same numbers each time hoping with each loss that their numbers are certainly due, have no more chance of winning than the last roll of the wheel

Ive run more marathons than number of times Ive gambled!

I can tell you - both hurt!

pinkboy

 

[Brady]

I play I decent amount of poker.

The article focus on the winning side of things.

Whereas the main point should of been that the 'experts' lost less on bad hands.

To make money you need to minimise your losses just as much as you need to capitalise on your good hands.

 

[ScottyB]

Just thinking about Lotto

I heard a comment the other day that you have as much chance winning lotto as placing a thumbtack in the correct area of a marathon track (42.195 km)?

People that play the same numbers each time hoping with each loss that their numbers are certainly due, have no more chance of winning than the last roll of the wheel

I heard an even better one last week. If you buy your Lotto ticket on a Wednesday for the Saturday draw you are more likely to die before the draw on the Saturday than win....

Not very uplifting i know..............

 

[Aaron_C]

Yes but if you win......who cares what the odds were? It's all a bit of fun.

 

[Jake D]

I heard an even better one last week. If you buy your Lotto ticket on a Wednesday for the Saturday draw you are more likely to die before the draw on the Saturday than win....

Not very uplifting i know..............

Awesome.
..

 

[HotRod]

Went to the casino with friends on the weekend to celebrate heir son's 18th birthday.

I had no interest at all in gambling and found the place very uninteresting, except the sports bar with the huge screens on the wall showing sports of all description.

I've made my money through calculated risk taking and sitting down next to Joe Average trying to win the "big one" had zero appeal.

Also amazing to see the type of people there. I don't mean this to sound elitist, but the majority of people there (wearing jeans, casual shoes etc) looked like they had just collected their dole cheques and walked across the road to start betting.

That is a very sad indictment of today's society, the only way to make money is to gamble.

More often that not the house will win with about a 20% advantage (60/40).

I guess investing is gambling on a grander scale, but I san make sure the odds are stacked more in my favour.

 

[Aaron_C]

I live in Melbourne and the sad thing is you see those types that HotRod mentioned (people dressed in jeans etc) BUT most of them are Asians in their 30-40s who are basically gambling their businesses' takings at the casino...very sad state of affairs indeed. Sickening place and I never go there, even for non-gambling activities.

 

[OKFFW]

More often that not the house will win with about a 20% advantage (60/40).

I bet(pun intended!) there would be many casinos willing to pay you mega dollars to design games where they have a 20% edge and yet people still want to play. Even pokies have a mandated minimum pay out of 87% meaning the house gets to keep 13% and that's the best house edge that comes to mind. All other games would be far less than that.

I've only played games against the house twice and both times for fun with friends on nights out where I set aside an amount I was willing to lose. Lost $100 once and won $320 the other. Other than that I like poker because the house has no stake in the game and the edge one has depends on their own skill.

 

[Ace in the Hole]

My thoughts on lotto are this:

Whether you buy a ticket or not, your chances of winning are pretty much the same.

 

[Ace in the Hole]

From the article:

In Prof Meyer’s study, 300 poker players took part, playing 60 hands each on tables of six. They were divided into “expert” and “average” players, and their ability to make money from good, bad and average hands was assessed. It turned out that – as you might expect – “expert” players lost less money on bad hands; but surprisingly, they did no better than average players on mediocre hands and even made slightly less on good ones. The conclusion, says Meyer, is that “poker players overestimate the skill factor in their play”.

This simply says that good players win more in the long run and bad players lose more.
Seems like the good players are more concerned about bankroll preservation and lower fluctuation/swings than the gambling amatuers looking for the big win.


And a test study with 60 hands, how can this be serious?
maybe 6,000 or 60,000 hands would show a meaningfull result

 

[starter]

I live in Melbourne and the sad thing is you see those types that HotRod mentioned (people dressed in jeans etc) BUT most of them are Asians in their 30-40s who are basically gambling their businesses' takings at the casino...very sad state of affairs indeed. Sickening place and I never go there, even for non-gambling activities.

An uncle of mine was one of these people, gambled away everything he had and got himself into massive debts, it broke up his family, his wife left him and his kids have had to go without a lot of things. There were numerous efforts from the extended family to help him out, but gambling addiction is a strong beast.

 

[oracle]

This simply says that good players win more in the long run and bad players lose more.
Seems like the good players are more concerned about bankroll preservation and lower fluctuation/swings than the gambling amatuers looking for the big win.

The same logic applies to investing as well. Investing is all about making a return in the future. But because future is uncertain, your best bet is to invest to minimise your losses. Which means you should only buy when you know you are getting a bargain.

Buffett said something along the lines of

"Never count on having an extra ordinary sell price. Instead, have your buy price so attractive that even a mediocre sell price will produce a satisfactory return".

Cheers,
Oracle.

 

[BayView]

I know lots of folk who are rich and who gamble, but I know no-one who got rich from gambling.

 

[redwing]

I know lots of folk who are rich and who gamble, but I know no-one who got rich from gambling.

I was always told that real gamblers go to lose, if they went to win, they would walk away on the occasions that they do...

 

[Newbieatlife]

baccarat you have a 50:50 chance of winning

that is if the casino isnt rigging the table and you don't bet on ties

 

[Graemsay]

Blackjack is the one game where the punter can get an edge over the house through a careful use of strategy and techniques such as card counting.

Of course casinos tend to frown on this, and tend to eject punters who win too much.

 

[redwing]

Speaking of looking for patterns, here's one from a forum member at aussiestockforums

"The Black Swan" of 2008

Or "Duck"...!