Here are the 6 reflections from reading The Biggest Bluff, Maria Konnivova’s book about her journey from a poker novice to a professional player.
Introduction
I don’t know how to play poker. My encounters with poker have always been in movies, from Casino Royale going back to Chow Yuen Fatt’s 1990s series The God of Gamblers. The reason I picked up this book is that a name mentioned in the Prelude reminded me of Matt Damon’s Rounders. That name was Erik Seidel. In the movie, there was a section about Matt Damon’s character watching a video of a young Erik Seidel playing against Johnny Chan. Erik walked into Chan’s trap and lost. Nevertheless, Matt Damon’s character proceeded to head to Vegas to pursue his poker dream, giving up a legal career and a girlfriend in the process.
So I found it interesting that there would be a real-life woman who would follow in the footsteps of Matt Damon’s character. Even more interesting, the woman would learn from the same Erik Seidel in the movie. Except that by now, Seidel has become a very successful professional player.
The following are 6 reflections on reading the book. Some of these are new perspectives or ideas contrary to my existing beliefs. Some are new applications of things I already know. One, however, is a view I would challenge. I’ll start with this.
1: Poker is truly egalitarian – maybe
“If you can afford the buy-in, you can play, simple as that. There’s no interview process where a hiring manager can decide you rub them the wrong way. You’re not penalized for bad social skills or annoying habits. Unlike other sports, there’s no need to be genetically endowed with the right height or musculature. If you’re blind, deaf, or any other way physically impaired, you can still play—indeed, many a player started from a hospital bed when no other activities were possible….If your skill is good enough that you’ve earned the right to play.”
This is something I had not thought about of poker. On one level, that is undoubtedly true. As long as you have money, you’re welcome to contribute towards the payday of the pros. High-testosterone rich guys/gals with an overestimate of their own skills are especially welcome.
On another level, “is anyone welcome to the club of the pros?”, I’m less sure. Konnikova argued that this is the case using herself as an example. She started as a total novice, thinking that a deck of cards had 54 cards instead of 52. In a little over 2 years, she turned pro, and earned more than US$200K doing so.
However…
I am inclined to believe that in poker, skills matter. If you had skills, you would be able to qualify for the big tournaments, funding these through earnings at games with smaller stakes. While this is no different from other professional qualification, poker arguably has a lower cost of entry.
To qualify as an accountant or a full-stack developer, you would need to take the relevant courses, pass multiple exams and even pay membership dues. The costs of doing these add up to thousands or even tens of thousands of dollars. Someone earning wages by the hour would likely face great balancing challenge to earn a professional qualification. To earn enough to fund the learning towards a qualification, she would need to devote more hours to work. In doing so, she has fewer hours left for studying for the exams. Poker has a much lower cost of entry. Konnikova mentioned that in 2010, the buy-in for recreational players in the World Series of Poker was $400.
Yet, I can’t help but wonder if anyone else might be successful in engaging Erik Seidel as a coach. Konnikova was already a published author and had her own column at the New York Times by the time she approached Seidel. Had she been an unknown hairdresser or grocer, but had dreams of turning poker-pro anyway, how would Seidel respond?
2: Beware the Dunning-Kruger Effect
I noted at least three mentions of the Dunning-Krugger effect in the book. This is one of them:
“The relationship between our awareness of chance and our skill is a U-curve. No skill: chance looms high. Relatively high skill: chance recedes. Expert level: you once again see your shortcomings and realize that no matter your skill level, chance has a strong role to play. In poker and in life, the learning pattern is identical.”
I first learnt of the Dunning-Kruger effect some years ago, and immediately recognized it in myself and in my colleagues. The most worrisome instance I had was when a colleague put forward a financial engineered solution to a regulatory obstacle in a proposed investment. This person’s prior experience was in sell-side derivatives. He was appointed to a key function in the company because of this background of getting deals done in marquee banks.
Real-life consequences
The problem is – investing in real assets is very different from selling derivatives. Sure, his banking experience would have given him exposure to other bankers who made those real assets deals happened. He might even have worked to structure derivatives for clients wanting to hedge their real asset exposures. Those are not the same as making the direct investment itself. In this particular instance, his financial engineered solution did not get past the company’s board. That was a close shave.
Unfortunately for the company’s customers, nevertheless, the halo of the marquee banks prevailed. He was given a lot of latitude in subsequent investment ideas. A lot of these got executed over the past two years. A typical regulated financial institution would not have done these. Things came to a head this March. The market upheavals led senior people to recognize the level of risks the company is taking. Last week, this colleague was out of the regulated entity. However, he retained influence by securing a transfer to the parent holding company to focus on deal transactions. Other colleagues and I expect to see more of his ideas being pushed in our direction.
3: No bad beats, reset quickly
I had written very briefly about this in a previous post. During Konnikova’s initial forays to tournaments, she made a lot of mistakes. After one such instance, she wanted to unload her experience of misfortune on Erik Seidel. Seidel’s response was:
“Bad beats are a really bad mental habit. You don’t want to ever dwell on them. It doesn’t help you become a better player. It’s like dumping your garbage on someone else’s lawn. It just stinks.”
In another instance, she texted Erik Seidel about her screw up. Seidel replied:
“Put it out of your mind and back to work,” he writes. We will discuss strategy later. For now, just focus on the next hand and forget the chips you’ve lost. Reset mentally, and play your short-stack game. One hand at a time.”
To do, and not to do
The author synthesized these and developed her own insight on what she needs to NOT do:
“The great players don’t play that way. It’s too draining, and it makes you too much the victim. and the victim doesn’t win.”
and what she needs to do:
“The more focus you can bring to something, the more attention you pay, the more you maximize your skill edge before the bad beat can even happen – and so your minimize the times when you leave your fate in the cards.”
and:
“… Reset not just strategically (how do I play a short stack?) but also emotionally (no anger at myself, no frustration with myself, just focused energy, forward-looking momentum; I may make mistakes, but I am still competent). I do my best to slow my breathing, let go of my blunder, and look ahead.”
One of the ways of daily resetting is to have a set of daily routines. I wrote about this in a previous post on overcoming adversities. The resetting Seidel required of the author is even more stringent. She needs to reset after every hand. That calls for a lot of mental discipline, and a steely focus on getting the process right:
“No matter: you will have other opportunities, and if you keep thinking correctly, eventually it will even out. These are the seeds of resilience … You can’t actually change the cards, … but you will feel a whole lot happier and better adjusted while you take life’s blows, and your ready mindset will prepare you for the change in variance that will come at some point.”
4: Increase your range of responses
Early in her journey, Konnikova had problems being aggressive at the poker table. Seidel pointed that out to her bluntly:
“He’s far from being a maniacal, aggressive player himself – and the fact that he is not so subtly pushing me in the aggro direction makes me think that he’s seen that it’s a part of me that needs work.”
Later on, the author even started to question the context within with an internal or external locus of control might be appropriate responses.
“Typically, an internal locus will lead to greater success: people who think they control events are mentally healthier and tend to take more control over their fate, so to speak. Meanwhile, people with an external locus are more prone to depression … Sometimes, though, as in the case of probabilities, an external locus is the correct response.”
This is because “nothing you do matters to the deck”.
Rather than advocating mastery of a single approach, or adoption of a single set of believes, the author argues for developing a wide range of responses.
The argument applied to one’s locus of control went directly against that I had written about previously. However, I recognize the rationale for that. This is an essential tool in countering the bad-beats mentioned above.
5: Poker questions, applied to life
I previously wrote about the importance of framing life-changing questions. During Konnikova’s poker journey, she did likewise:
“Do I go for the min cash in my life decisions, holding on for the safer sure thing rather than taking more risk for the more uncertain but ultimately more attractive option? Do I lack gamble in my life? Do I let myself be taken advantage of by people who recognize the fright behind my eyes?”
I had taken more gambles earlier in life than I do now. Giving up an iron-clad career with a stable income, I ventured out into not one, but two entirely new places. I knew next to nobody and had to build my social and professional network from scratch. I went for jobs in industries in which I had no prior experience. In doing so, I drew down my bankroll to its minimum. In fact, it became negative before I finally found my feet on the ground again. Back then, the variance of life went in my favour.
Fast forward to this day, and I find myself taking fewer chances. I can remember instances when I allowed myself to “be taken advantage of by people who clearly saw the fright behind my eyes.” I also recognized my reasons for allowing that to happen. In poker language, my cards weren’t great. The variance of life had now gone against me. My response was similar to that Erik gave Konnikova – focus on my short-stack game, and focus on the immediate next game. In a recent encounter with a trusted colleague, he warned me about an ongoing named culling exercise. I looked at my heart rate, and it barely deviated from my resting pulse. It was then that I realized the fright is slowing fading out from my eyes.
6. Three related books
In the section about bad beats being a bad mental habit, Konnikova wrote:
“There is no such thing as objective reality. Every time we experience something, we interpret it for ourselves.”
This reminds me of Soro’s reflexivity theory.
Reflexivity asserts that prices do in fact influence the fundamentals and that these newly influenced set of fundamentals then proceed to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern.
Reflexivity, Wikipedia
The difference is that reflexivity goes further to argue that our interpretation of reality affects the fundamental reality, which then, in turn, affects our interpretation. The logic is kind of circular, like that of Matthew McConaughey’s character in the movie Interstellar. The character turned out to be the “ghost” in his daughter’s bedroom who shared insights to advance human’s understanding of interstellar physics.
In one of the chapter introductions, Konnikova quoted:
“Fortune always will confer an aura of worth, unworthily, and in this world the lucky person passes for a genius.”
EURIPIDES, THE HERCLEIDAE, C. 429 BCE
This reminds me of Nassim Taleb’s book, Fooled by Randomness. The guy came across as quite pompous, but the content made sense.
The last book I was reminded to read is another book about poker written by another woman. This is Annie Duke’s Thinking in Bets. In a professional poker career spanning 25 years, Duke earned more than $4 million. At first glance, Duke’s book seems to focus on decision-making tools on dealing with risk and uncertainty. Konnikova’s book, on the other hand, addresses the psychological side of the game, in particular paying attention and adopting a conducive mindset.
Conclusion
These are my 6 reflections on The Biggest Bluff. While not exactly a book review or a book summary, it brings out the key ideas in the book that I found most applicable. I also mapped the book to other related books discussing one or more similar areas in greater details. I hope you’ll find this useful.