Win, draw, lose, turn pennies into millions
Just
a quick update on my last Sunday bet of not spending even one penny for
anything for two weeks: so far the bet has held nicely, and I have
avoided all the little temptations. Instead of eating fast food or
Ethnictown fare, I've been slowly emptying the fridge and freezer, both
of which still containing plenty of stuff for me to munch on. In fact,
I think that I am now past the point of no return so that the whole
idea of taking money out of my wallet and giving it somebody would feel
like an enormous loss or a failure.
Now that we are on the topic of betting, as I mentioned earlier I had borrowed "The Zen of Gambling" by Wayne Allyn Root, and that the introduction where Wayne basically establishes himself as the hero of a Dean Koontz novel was already something so zany that I couldn't even put it in words. I have now finished this book and shall therefore comment about it a little bit. But before that, now that I linked to the Amazon page of this book, I noticed that Wayne also has another similar book out, "Millionaire Republican: Why Rich Republicans Get Rich--and How You Can Too!" Based on the cover alone this tome looks like a definite must-read, in every possible sense of the word. Just like Kunstler always says, you might already be a winner if you just pray, wish upon a star and believe it hard enough! It might also be interesting and instructive to compare the guidelines in this book to those provided in "The Millionaire Next Door", the well-known classic which usually does not come with a picture of a Hummer on its cover.
In a rather perplexing way "Zen of Gambling" is actually two almost completely separate books in one. The beginning of the first part follows the spirit of the aforementioned introduction in that it is an absolutely looneytune, sheer nonsense book about "taking risks" and being a "zen gambler" that would only guarantee ruin to most people who try to follow its advice, despite the occasional good nuggets that I have to admit follow in the rest of part one. The second part of the book is solely about sports betting, and even though I don't know anything about the topic (of course, as a blogger, that doesn't stop me from presenting expert opinions on this), as far as I can tell, this part is sensible and intelligent. Of course, the advice given therein totally contradicts pretty much most of the stuff presented in the first part of the book, for those of us who paid any attention.
Let's look at some highlights in the first part of the book, just to give you an idea of what is going on. After the introduction, the author starts boldly by proclaiming that taking huge risks is absolutely necessary for achieving great success, like the fancy life full of luxuries that Wayne is currently living, even though once he too was poor and had to struggle to climb up. Perhaps so, but for most people, huge risks have the unfortunate tendency of realizing far too often, even though we only ever take risks after convincing ourselves to believe that they won't realize this time. In a more interesting section that follows this rah-rah pep talk, Wayne explains several interesting ways that casinos use to entice players to play more and take needless risks, and warns his readers about them. Somehow, and I am not entirely sure how since Wayne does not really explain it except perhaps in a very vague manner, you can still win in casino by being a "zen gambler" who uses "visualization".
Next, we move to the contrarian betting strategy that lays the groundwork for part two of the book. One should not follow the herd that is only lead to be slaughtered but be a bold contrarian, always looking for undervalued stocks and games and betting on those. The mass is led on the nose by the media, and Wayne asks the important question about stock market and sports experts that I have also asked before, about why somebody who has information about how some stock is going to behave or how a game will turn out would give it out for free, since there would be far more lucrative ways for these people to profit from their knowledge. Indeed. Of course, one might now also ask the same question of what motivation the owner of a sports handicapping firm could possibly have to encourage people to start betting on sports, giving them a good feeling of invincibility. I do have a hypothesis or two of my own about this, but maybe I'll keep them just to myself for now.
In the chapters five and six, "The Experts Are Not" and "The Critics Are Idiots!", we get back to the solid looneytone territory, and then some. The basic message of these two chapters is quite simply that you should never listen to fancy-pancy experts or critics in anything, since those nattering nabobs don't know any better than you what they are talking about. Winners always make their own rules and persist even though petty critics try to break their spirits by their muttering, so if you make your own rules and don't listen to critics, then logically you are winner, right? And even if they fail, they fail spectacularly. (Hmm... now what was that about Republicans, again?)
It is the dreamers and risk-takers who win big and create everything of value. (Just like Simon Cowell has vividly demonstrated to us.) To really drive his point through to our numb skulls, Wayne tells us that over the years, he has read thousands of articles about successful people who have proved their critics wrong, and then goes on to list some of his personal favourites. Yes, the list that he provides is exactly the one that you can google in few seconds, you know, the one that has the cliches of "There is not reason anyone would want a computer in their home" and "Everything that can be invented, has been invented". "640 kb should be enough for everyone" is missing, for some reason. Of course, the reality of experts having been absolutely right countless times about pretty much everything does not enter the discussion here. For every misunderstood genius, there are thousands of correctly understood nutjobs. But I guess that if you get to choose the examples yourself, anything is possible.
After the explanation of value investing and "Root's Rules for Success" (which include such instant gems as "aim for the sky" and "create your own rules") and advice on being a "spiritual gambler" who prays and brushes his teeth regularly, we finally get to the second part of the book. The basic idea here is not to go for long shots and popular bets, but like the value investors in the stock market (Warren Buffett immediately comes to mind) systematically look for bets whose real expected value for the bettor is better than the posted odds, and bet only on such games, grinding the value out gradually in many bets instead of trying to get rich quick with a few risky long shots. I certainly believe that one can make a living this way: my parents-in-law have a friend who does exactly that, and has been doing it pretty consistently over the years.
It is obviously impossible by definition for most people to be successful contrarians, but those who can do it may certainly win. According to Wayne, the best professional handicappers and gamblers win 55 to 60 percent of their best, a rather significant edge over the long run. It should go without saying that it would be rather silly to bet all your money in one game which you think you have a 60% chance of being right, instead of making hundred smaller bets in hundred games where you have this edge. Even if these odds were real for a huge payday in a single bet, there is still a good chance of losing everything, as evidenced by one particular anecdote about a client who repeatedly bought Wayne's advice and won five times in a row with it increasing the size of his bet each time, and then lost the sixth game in which he had in his woozy triumphalism bet everything he had and then some. Ah well, at least this man boldly took risks, unlike us timid critics who know neither victory nor defeat.
The rest of this book consists of a whole bunch of heuristic rules to help you look for seriously undervalued games in both professional and collegiate sports. Unlike casino games that are played with impersonal cards or machines, sports events are executed by humans and thus necessarily have a psychological factor based on recent history deeply ingrained in them for the smart gambler to utilize. The idea is to bet on the underdogs in the situations where they are not really as serious underdogs as the mass public perceives them to be. The heuristic rules provided sound quite reasonable to me (and they are not all trivial in the sense of "it tends to hurt the team if its star player is charged with rape"), and if Wayne says that these heuristics have in the long run won him more than they have lost, then well, I can't really argue with that. Besides, Wayne looks so handsome, successful and confident and trustworthy in the back cover of the book, smiling in front of a Las Vegas backdrop, that surely they wouldn't have even printed this book unless he knows what he is talking about. After all, could there be more reliable signals for being an expert?
But that's enough of that book. Speaking of casino games, there is this one thing that really annoys me each time I see "advice" given about it. Namely the whole notion of a "streak", either winning or losing, and the "advice" that it is somehow a huge mistake to give up a winning streak or to keep playing on a losing streak. As if the cards, dice or other machine had a memory so that each hand or bet would not be completely independent of the events that took place before it. It is almost as if by some magic behind-the-scenes interaction, winning several hands in a row somehow increases the probability of the next hand also being a winner, so quitting in the middle of a "winning streak" is a mistake. I wish that the people who give this advice of not quitting while on a "hot streak" at least once explained how the dice and cards have this memory. And instead of just using this to win on the casino table, I am sure that James Randi would also give you a million dollars for it.
Now that we are on the topic of betting, as I mentioned earlier I had borrowed "The Zen of Gambling" by Wayne Allyn Root, and that the introduction where Wayne basically establishes himself as the hero of a Dean Koontz novel was already something so zany that I couldn't even put it in words. I have now finished this book and shall therefore comment about it a little bit. But before that, now that I linked to the Amazon page of this book, I noticed that Wayne also has another similar book out, "Millionaire Republican: Why Rich Republicans Get Rich--and How You Can Too!" Based on the cover alone this tome looks like a definite must-read, in every possible sense of the word. Just like Kunstler always says, you might already be a winner if you just pray, wish upon a star and believe it hard enough! It might also be interesting and instructive to compare the guidelines in this book to those provided in "The Millionaire Next Door", the well-known classic which usually does not come with a picture of a Hummer on its cover.
In a rather perplexing way "Zen of Gambling" is actually two almost completely separate books in one. The beginning of the first part follows the spirit of the aforementioned introduction in that it is an absolutely looneytune, sheer nonsense book about "taking risks" and being a "zen gambler" that would only guarantee ruin to most people who try to follow its advice, despite the occasional good nuggets that I have to admit follow in the rest of part one. The second part of the book is solely about sports betting, and even though I don't know anything about the topic (of course, as a blogger, that doesn't stop me from presenting expert opinions on this), as far as I can tell, this part is sensible and intelligent. Of course, the advice given therein totally contradicts pretty much most of the stuff presented in the first part of the book, for those of us who paid any attention.
Let's look at some highlights in the first part of the book, just to give you an idea of what is going on. After the introduction, the author starts boldly by proclaiming that taking huge risks is absolutely necessary for achieving great success, like the fancy life full of luxuries that Wayne is currently living, even though once he too was poor and had to struggle to climb up. Perhaps so, but for most people, huge risks have the unfortunate tendency of realizing far too often, even though we only ever take risks after convincing ourselves to believe that they won't realize this time. In a more interesting section that follows this rah-rah pep talk, Wayne explains several interesting ways that casinos use to entice players to play more and take needless risks, and warns his readers about them. Somehow, and I am not entirely sure how since Wayne does not really explain it except perhaps in a very vague manner, you can still win in casino by being a "zen gambler" who uses "visualization".
Next, we move to the contrarian betting strategy that lays the groundwork for part two of the book. One should not follow the herd that is only lead to be slaughtered but be a bold contrarian, always looking for undervalued stocks and games and betting on those. The mass is led on the nose by the media, and Wayne asks the important question about stock market and sports experts that I have also asked before, about why somebody who has information about how some stock is going to behave or how a game will turn out would give it out for free, since there would be far more lucrative ways for these people to profit from their knowledge. Indeed. Of course, one might now also ask the same question of what motivation the owner of a sports handicapping firm could possibly have to encourage people to start betting on sports, giving them a good feeling of invincibility. I do have a hypothesis or two of my own about this, but maybe I'll keep them just to myself for now.
In the chapters five and six, "The Experts Are Not" and "The Critics Are Idiots!", we get back to the solid looneytone territory, and then some. The basic message of these two chapters is quite simply that you should never listen to fancy-pancy experts or critics in anything, since those nattering nabobs don't know any better than you what they are talking about. Winners always make their own rules and persist even though petty critics try to break their spirits by their muttering, so if you make your own rules and don't listen to critics, then logically you are winner, right? And even if they fail, they fail spectacularly. (Hmm... now what was that about Republicans, again?)
It is the dreamers and risk-takers who win big and create everything of value. (Just like Simon Cowell has vividly demonstrated to us.) To really drive his point through to our numb skulls, Wayne tells us that over the years, he has read thousands of articles about successful people who have proved their critics wrong, and then goes on to list some of his personal favourites. Yes, the list that he provides is exactly the one that you can google in few seconds, you know, the one that has the cliches of "There is not reason anyone would want a computer in their home" and "Everything that can be invented, has been invented". "640 kb should be enough for everyone" is missing, for some reason. Of course, the reality of experts having been absolutely right countless times about pretty much everything does not enter the discussion here. For every misunderstood genius, there are thousands of correctly understood nutjobs. But I guess that if you get to choose the examples yourself, anything is possible.
After the explanation of value investing and "Root's Rules for Success" (which include such instant gems as "aim for the sky" and "create your own rules") and advice on being a "spiritual gambler" who prays and brushes his teeth regularly, we finally get to the second part of the book. The basic idea here is not to go for long shots and popular bets, but like the value investors in the stock market (Warren Buffett immediately comes to mind) systematically look for bets whose real expected value for the bettor is better than the posted odds, and bet only on such games, grinding the value out gradually in many bets instead of trying to get rich quick with a few risky long shots. I certainly believe that one can make a living this way: my parents-in-law have a friend who does exactly that, and has been doing it pretty consistently over the years.
It is obviously impossible by definition for most people to be successful contrarians, but those who can do it may certainly win. According to Wayne, the best professional handicappers and gamblers win 55 to 60 percent of their best, a rather significant edge over the long run. It should go without saying that it would be rather silly to bet all your money in one game which you think you have a 60% chance of being right, instead of making hundred smaller bets in hundred games where you have this edge. Even if these odds were real for a huge payday in a single bet, there is still a good chance of losing everything, as evidenced by one particular anecdote about a client who repeatedly bought Wayne's advice and won five times in a row with it increasing the size of his bet each time, and then lost the sixth game in which he had in his woozy triumphalism bet everything he had and then some. Ah well, at least this man boldly took risks, unlike us timid critics who know neither victory nor defeat.
The rest of this book consists of a whole bunch of heuristic rules to help you look for seriously undervalued games in both professional and collegiate sports. Unlike casino games that are played with impersonal cards or machines, sports events are executed by humans and thus necessarily have a psychological factor based on recent history deeply ingrained in them for the smart gambler to utilize. The idea is to bet on the underdogs in the situations where they are not really as serious underdogs as the mass public perceives them to be. The heuristic rules provided sound quite reasonable to me (and they are not all trivial in the sense of "it tends to hurt the team if its star player is charged with rape"), and if Wayne says that these heuristics have in the long run won him more than they have lost, then well, I can't really argue with that. Besides, Wayne looks so handsome, successful and confident and trustworthy in the back cover of the book, smiling in front of a Las Vegas backdrop, that surely they wouldn't have even printed this book unless he knows what he is talking about. After all, could there be more reliable signals for being an expert?
But that's enough of that book. Speaking of casino games, there is this one thing that really annoys me each time I see "advice" given about it. Namely the whole notion of a "streak", either winning or losing, and the "advice" that it is somehow a huge mistake to give up a winning streak or to keep playing on a losing streak. As if the cards, dice or other machine had a memory so that each hand or bet would not be completely independent of the events that took place before it. It is almost as if by some magic behind-the-scenes interaction, winning several hands in a row somehow increases the probability of the next hand also being a winner, so quitting in the middle of a "winning streak" is a mistake. I wish that the people who give this advice of not quitting while on a "hot streak" at least once explained how the dice and cards have this memory. And instead of just using this to win on the casino table, I am sure that James Randi would also give you a million dollars for it.
I was wondering how your bet was going. It would be funny if your wife unplugged the refrigerator and freezer at night when you were asleep.
Posted by C. Van Carter | 12:03 AM
In poker the streak is true but not for superstitious reasons, of course, but psychology.
If you are losing, especially if you had the odds for a big win but the enemy hit his long shot and got the pot, you might end up in a state where you don't play optimally any more. Similar thing goes for winning. If you win a lot, the game is possibly soft already and enemies may end up playing even worse.
Posted by Anonymous | 2:30 AM