She adds: "If he could figure out how to disentangle the chance from the skill, how to maximise the role of the latter and learn to minimise the malice of the former, he believed he would hold the solution to some of life's greatest decision challenges."
Spoiler alert: Over the course of the year and a half the book spans, Konnikova goes from being a rank novice who doesn't know a straight from a flush to an accomplished pro who gets to final tables in tournaments sometimes winning and makes serious money $US350,000 ($489,000) and counting, she told an interviewer. She even had a sponsor for a time.
How does she do it? First, she finds the perfect teacher in Erik Seidel, a poker legend who's a kind of Delphic presence in the book. He tends to guide her towards knowledge rather than imposing it, so that her poker breakthroughs feel like her own discoveries at least as much as his teachings.
Second, she goes all-in, devoting herself fully to the task at hand, even though there are many discouraging moments along the way moments when her lack of poker smarts allow better players (usually men) to goad her into making mistakes.
And third and this is the part that truly grabbed me she learns a mode of thought that is vital to winning poker. This is where The Biggest Bluff intersects with Moneyball. What Konnikova has to say about thinking can also be applied to investing. "It's all about thinking well," Seidel tells her during one of their first meetings. "The real question is can good thinking and hard work get you there?"
In one of her few direct references to stock picking, she quotes the Nobel laureate Daniel Kahneman: "For a large majority of fund managers, the selection of stocks is more like rolling dice than like playing poker."
He continues: "The successful funds in any given year are mostly lucky; they have a good roll of the dice. There is general agreement among researchers that nearly all stock pickers, whether they know it or not and few of them do are playing a game of chance."
Thinking like a poker player could well be an important way to minimise the element of chance in investing, and heighten the element of skill.
Konnikova's first lesson and it's a painful one is that she's going to need to lose to get better. "The benefit of failure is an objectivity that success simply can't offer," she writes. "If you win right away if your first foray into any new area is a runaway success you'll have absolutely no idea to gauge if you're really just that brilliant or it was a total fluke and you got incredibly lucky."
Lesson No. 2: How do you react to losing? She quotes Dan Harrington, the author of several widely read poker strategy books: "Everyone plays well when they're winning. But can you control yourself when you're losing? And not by being too conservative, but trying to still be objective as to what your chances are in the hand. If you can do that, then you've conquered the game."
And so it goes: A good poker player has to be comfortable with uncertainty just like a good investor. She has to have a good reason for every single decision she makes. She has to be able to acknowledge mistakes and adjust accordingly. She has to be able to shut out all the white noise while searching for meaningful patterns. She can't get too high when she wins a big pot or too low when she's on a losing streak. A player who is self-aware enough to clearly see her own strengths and weakness has a big advantage. All of these attributes are important for good investing as well.
Konnikova stresses the importance of not dwelling on bad luck those times when you have a good hand that you played correctly but lost because your opponent got lucky when the last card was turned over. What matters is whether your decision was sound.
At one point, when she is complaining about a hand she lost, Seidel tells he doesn't want to hear the result of her hands any more. He just wants to hear her explain her decision-making. "When you're telling me hands, don't even say how it ended," he says. "I want you to do your best to forget how it ended yourself. That won't help you."
"Poker taught me not to be focused on the outcome, but on the process," Konnikova told me when we spoke a few days ago. "And that has been liberating in everyday life. It feels nice to wallow when things go wrong. Give me some sympathy! Poker just knocked that out of me. You are just wasting valuable emotional resources. It serves no purpose."
More than just about anything, Konnikova learns how to take emotions out of her decision-making. That may be the single most important thing Seidel and several other mentors taught her.
What surprised me the most is the idea that you can be taught to think in a less emotional, more rigorous way. You don't see many adults changing their thought process and I asked Konnikova if it were really possible on a wide scale. After all, not everyone has a doctorate in psychology like she does or undertakes a task they will fail if they don't learn to think differently.
Yes, she replied, she was convinced that modes of thought could be taught. "My graduate adviser was Walter Mischel," she said. Mischel was a psychologist who conducted one of the world's most famous experiments: the marshmallow test.
That's the delayed gratification test in which children were put in a room with a treat (often but not always a marshmallow), which they could either eat right away or hold off, knowing their reward for doing so will be a second marshmallow. The marshmallow tests were conducted in the 1960s, and Mischel then followed the subjects for decades afterwards. He found that those who were able to hold off eating the first marshmallow fared better in life than those who lacked that self-control.
"There were actually two other fascinating trajectories that no one talks about," Konnikova said. "There were children who couldn't wait to eat the marshmallow, but learnt self-control later in life. And there were some who did wait for the second marshmallow but whose self-control ended up deteriorating."
Guess what? Those who were taught self-control had the same life outcomes as those who had that mindset at the start and never lost it. "A lot of these skills can be taught," she said "And the same is true of critical thinking."
Maybe it's time for investors to start learning how to play poker.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and The New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast The Shrink Next Door.
Read the original:
- BetMGM Poker Running Spin the Wheel Promo in Pennsylvania - Pokerfuse - May 29th, 2021
- Atlantic City Poker Rooms Remove COVID-Related Seating Restrictions - CardsChat.com - May 29th, 2021
- Tony Parker qualifies for the World Series of Poker - Pounding The Rock - May 29th, 2021
- Tony Parker earns berth into World Series of Poker Main Event - Larry Brown Sports - May 29th, 2021
- Connecticut Online Poker Bill Passes Senate, Awaits Governor's Signature - CardsChat.com - May 29th, 2021
- "Paul Pierce and Phil Ivey to participate in crypto-based poker tournament for charity": Celtics legend to... - The Sportsrush - May 29th, 2021
- Connecticut Online Poker Legalized as Governor Signs Gambling Expansion Bill - CardsChat.com - May 29th, 2021
- Connecticut on the Verge of Legalizing Online Poker, Casino Games and Sports Betting - Pokerfuse - May 29th, 2021
- Spurs legend Tony Parker is 'very excited' to be the first qualified player for WSOP Main Event - mySA - May 29th, 2021
- WSOP and 888 Banks Biggest Share of New Jersey Online Poker Revenue in April - Pokerfuse - May 29th, 2021
- Will The Pandemic Kill Our Love Of Live Poker? - Casino.Org News - May 29th, 2021
- Online Poker Launches In Michigan Friday Morning - CardPlayer.com - January 30th, 2021
- 4th Annual Ace of Hearts Poker Run benefiting the American Heart Association - WKRG News 5 - January 30th, 2021
- Is There A Future for Nationwide Online Gaming and Poker in the US? - Poker News Daily - January 30th, 2021
- Online poker in the cards for North Dakota? - INFORUM - January 30th, 2021
- Fed Needs a Poker Face to Avoid Taper Tell - The Wall Street Journal - January 30th, 2021
- Is online poker in the cards for North Dakota? - The Dickinson Press - January 30th, 2021
- This Week in Poker Podcasts - Pokerfuse - January 30th, 2021
- 888 Executive: US Online Poker to Benefit from Latest Wire Act Ruling - Casino.Org News - January 30th, 2021
- Justice Kagan: Poker Shark - Above the Law - January 30th, 2021
- The FIVES Poker Podcast: WPT in the Headlines, Polk Tilts Negreanu - PocketFives - January 30th, 2021
- Partypoker US Network Posts Big Online Poker Revenue Gains in New Jersey During the Final Quarter of 2020 - Pokerfuse - January 30th, 2021
- Los Angeles Poker Rooms Given Green Light to Reopen this Week - CardsChat.com - January 30th, 2021
- BetOnline Offering Players A Bitcoin Boost On Their Online Poker Deposits - Poker News - CardPlayer.com - December 16th, 2020
- Get the Inside Story on THAT James Bond Poker Hand - PokerNews.com - December 16th, 2020
- Ike Haxton Calls for Live Poker to be Boycotted amid COVID-19 Crisis - HighstakesDB - December 14th, 2020
- Gabe Kaplan and AJ Benza Return As Hosts For New Season of High Stakes Poker TV Show - Poker News - CardPlayer.com - December 14th, 2020
- BetMGM CEO: U.S. Online Poker Will Again Have Period In Sunshine - US Bets - December 14th, 2020
- PokerStars Blowout Series Offers $60M In Gts | My Blog - Tight Poker - December 14th, 2020
- Election Bets: Who are Poker Players Putting Their Money On? - PokerNews.com - November 3rd, 2020
- Phil Galfond: Run It Once Poker SNGs "Just Around the Corner" - PokerNews.com - November 3rd, 2020
- I've won more than $4 million playing pokerhere's my No. 1 secret to successful decision-making - CNBC - November 3rd, 2020
- Sudden rush in the Poker Industry in India European Gaming Industry News - European Gaming Industry News - November 3rd, 2020
- MGM Grand To Host Freeroll Tournaments Funded By Unused Jackpot Money From Closed Strip Poker Rooms - CardPlayer.com - November 3rd, 2020
- How to Avoid the Most Common Forms of Cheating in Poker - TimesOfCasino - November 3rd, 2020
- The Pros And Cons Of Playing Poker In An Online Casino - Poker News - CardPlayer.com - November 3rd, 2020
- We Take a Look at the Polk vs. Negreanu Betting Odds - PokerNews.com - November 3rd, 2020
- Intertops Poker is hosting a new slots tournament this week - World Casino Directory - November 3rd, 2020
- The Great Thing About Poker? "Anyone Can Learn To Win - PokerNews.com - November 3rd, 2020
- To Play Poker in a Pandemic, Americans Flee the U.S. - The New York Times - September 5th, 2020
- Partypoker is Also Returning To Live Poker Circuit With Stop in Russia this Month - Pokerfuse - September 5th, 2020
- Poker Operators Should Try Themed Poker Rooms | My Blog - Tight Poker - September 5th, 2020
- How Poker Became the Casino Favorite It Is Today - Pokerfuse - September 5th, 2020
- The Cross-Platform And Cross-Gen Poker Club Brings Social Play To Switch Later This Year - Nintendo Life - September 5th, 2020
- Why Investing in Tesla Is a Bit Like Texas Hold 'Em Poker - RealMoney - September 5th, 2020
- Poker run is this weekend in Brookings | Neighbors - Watertown Public Opinion - September 5th, 2020
- Bayern and Inter involved in "Perisic Poker" - Bulinews.com - September 2nd, 2020
- Ripstone Brings Poker Back to Video Game Consoles - Beat The Fish - September 2nd, 2020
- ARE THERE CASINO OR POKER TOURNAMENTS ON THE ISLE OF WIGHT? - Island Echo - September 2nd, 2020
- Benjamin Pollak Latest Player to Join Team partypoker - PokerNews.com - September 2nd, 2020
- Top Ranked Poker Sites to Play in 2020 - Programming Insider - August 10th, 2020
- The Deck Is Not Rigged: Poker and the Limits of AI - Singularity Hub - August 10th, 2020
- Chrome Dragons Riding Club hosts 2nd Annual Kids and Heroes Poker Run - WBOY.com - August 10th, 2020
- Know the odds before you act when playing poker - GamingTodaySlotsToday - August 10th, 2020
- Variations of Poker That is Worth Knowing About - Programming Insider - August 10th, 2020
- Irish poker player scoops $100k and World Series of Poker gold bracelet 22 years after father won same title - The Irish Sun - August 10th, 2020
- Poker, board games and the core group helped the newest Flyers get comfortable | On the Fly - The Philadelphia Inquirer - August 10th, 2020
- Poker in Print: The Godfather of Poker (2012) - CalvinAyre.com - August 9th, 2020
- Homeless Sex Offender Charged In Connection With World Poker Tour Star Susie Zhao Death - Deadline - August 8th, 2020
- Suspect arrested in death of pro poker player found burned at Michigan park - MLive.com - August 8th, 2020
- 'Going to the Dogs' Poker Run and Silent Auction to benefit CCAPS - Magnolia Banner News - August 8th, 2020
- Online Charity Poker Tournament Helps Fly Sick Children to Medical Care - Look to the Stars - August 8th, 2020
- Man, 60, in custody in connection to death of professional poker player Susie Zhao - Detroit Free Press - August 8th, 2020
- Heads Up Poker Podcast: 234 - Steve and Carlos: WITWICWRN - Pokerfuse - August 8th, 2020
- What Site Offers the Best Online Poker Bonus in 2020? - PokerNews.com - August 7th, 2020
- 60-year-old man arrested in connection with Oakland Co. professional poker player's death - WXYZ - August 7th, 2020
- An Open Letter To The WSOP: Why Mixed Games Are Good For Poker Player Development - Poker News - CardPlayer.com - August 7th, 2020
- From poker pro to slaying victim: Susie Q's unlikely story - The Detroit News - August 3rd, 2020
- Hugh Freyer, Poker Player With Discretion of a Banker, Dies at 86 - The New York Times - August 3rd, 2020
- Why Negreanu thinks Ivey is the best poker player in the world - Comcast SportsNet Chicago - August 3rd, 2020
- Facebook develops AI algorithm that learns to play poker on the fly - VentureBeat - August 3rd, 2020
- Man arrested in connection with death of Waterford Twp. pro poker player - The Detroit News - August 2nd, 2020
- Poker Strategy: In Omaha, Outs Aren't Everything, It's Whether You Improve Enough - Poker News Daily - August 2nd, 2020
- Police arrest suspect connected to apparent killing of professional poker player Susie Zhao - ABC News - August 2nd, 2020
- Why Daniel Negreanu Thinks Phil Ivey Is the Best Poker Player in the World - NBC Chicago - August 2nd, 2020
- Person in custody in connection with Oakland County professional poker player's death - WXYZ - August 1st, 2020
- PKO US: Progressive Knockouts Roll out to Global Poker, WPN and Partypoker NJ - Pokerfuse - August 1st, 2020
- Ethan Yau Brings Audience Into His World Series of Poker Dream - PocketFives - August 1st, 2020
- Facebooks New ReBel Poker AI Scores Higher than Pluribus - Beat The Fish - July 31st, 2020
- Ivonne Montealegre discusses how live poker is embracing the online space - CalvinAyre.com - July 31st, 2020