I haven't taken any financial courses/schools.
My thoughts are simply extending my poker knowledge as a regular winner over 9 years to normal life and businesses.
Poker is a clear zero sum game, someone winning means someone else has to lose.
We have the house who takes a cut of 5% out of every pot played, we have the gov taxing the profits and then we have the players.
The house and the gov clearly can't be losing money from what happens at the table.
That means at least one player is losing. He is called the fish.
The pro player who is a winner at the tables is called a reg(ular).
Until proven otherwise I'm a firm believer that the above applied to almost everything.
There will be : the house, the gov, the regs(pros), the fish.
Some refuse to believe this even without having arguments against it, it seems unethical and refusing to see the reality helps them sleep better at night.
There is no reason to feel guilty about it, personally I fall asleep very easily.
Quick simple applied exercise: find the fish in car insurance deals.
Car insurance-> it involves people insured, the gov, the insurance company.(we neglect a few minor details for simplicity sake)
The gov and insurance company(the house) are profiting despite having maintenance costs.
That means the people insured are taking a massive loss.
Out of them the moron driver who gets into accidents all day and night is also likely wining money(he is the reg/pro).
Answer: The fish in this system is the good driver.
A good friend of mine who also has a business mind picked up on that fact that I unknowingly use poker theory to solve life and financial situations that I run into.
So he fired up some questions about poker theory that were similar to his financial situations in hopes that he'd find good solutions.
This is where I got the idea for this blog, it should help me organize my thoughts better and use the poker theory knowingly for a more powerful effect.
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"I want to get into trading. I read a book about it from a successful trader written in 2012.
Am I ready to make a bit of money trading? I know it will be harder at first till I get some experience, but I'll get better and better, etc"
I put this into a poker problem:
First of all, who/where is the fish?
Rule: If you can't identify the fish or simply believe no fish exists in this particular(any) system ---> you are the fish.
If a great well known poker player wrote a book in 2012 and I play against him tomorrow and he plays similarly to how he wrote in the book -> I guarantee that I would beat the piss and shit out of him.
Is it enough to beat the average player though?
After reading a trading book recently, I retroactively applied the theory to a trading horse betting market using computer simulations so that I would have a very large sample size and risk no money on the test.
You guessed it: the market would've beat the piss and shit out of me if I followed the book strategy.
Furthermore the advice seem primitive in nature: giving out some patterns that the author said are +EV(+expected value) based on his experience.
Poker theory says his sample size is too low to be much better than a random guess.
Why wouldn't I run computer simulations and find patterns over a huge and more recent sample instead?
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"but if in a company we all work as a team and help each other don't we all win?" -> No, your competitor losses. Or your customers lose if you are a monopoly and have no competitors. Or/and John Smith losses because nobody is getting fired in your company therefore he will get no opportunity to be employed there.
"but if A and B go to war and they fuck each other up don't they both lose?" -> the entity selling the weapons would be winning money.
The situations can have a simple decision tree or a very complex one.
And either way the question is the same: who is the fish ?
If you can't identify the fish or simply believe no fish exists in this particular(any) system ---> you are the fish.
Homework: Find the fish in the real estate(agents, buyers, sellers) etc market
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