Lessons I Learned From Poker
- Posted by James Altucher
Yesterday in the Twitter Q&A that I give every Thursday @GiraffesCanSwim asked, “what did you learn from playing poker?” I gave a 140 character answer. Something like, “you learn quickly that all your friends lie to you all the time in order to steal your money.”
But I’ve been thinking a little more about it.
First off, I spent 365 days straight playing poker in 1998-1999, including the night my first kid was born. Including my birthday and my anniversary.Including Christmas and Easter and whatever Jewish holidays occurred during this time.
I used to play at the Mayfair Club on 24th Street and the Diamond Club on 20th Street, both illegal clubs. The Mayfair would close at 4am and some stragglers would head over to the Diamond, which never seemed to close. Ultimately both were closed down permanently by Giuliani. I had a house in Atlantic City and would play there on the weekends. I’d go via helicopter Fridays at 5pm and fly back on Sunday night. Occasionally I would go to Las Vegas and play. This was pre-Internet poker, tv poker, and pre the big money that is in poker now.
The only time life had any color in it for me during this period was when I was sitting around a table, chips in front of me, cards getting dealt, and guys with nothing else in their lives making jokes back and forth while everyone tried to take everyone else’s money.
A few weeks ago, Claudia and I ran into the guy who had once owned the Diamond Club. Oddly, we were at a party for the Wall St Journal on some rooftop bar all the way west in Manhattan. The Diamond Club guy wouldn’t give us a straight answer for why he was at the party. All he kept doing was talking to Claudia, pointing at me, and saying “this guy was the lowest down cheap hustler there was. He’s a born criminal. Watch out for him.”
I told her later he was kidding around. But the way he said it flattered me actually. Poker is a charismatic game. People who are larger than life play poker and make their living from playing games and hustling. That’s what’s attractive about it. That’s part of what’s attractive about being an entrepreneur, or doing anything where you eat only what you kill and you survive in life only on your instincts.
I played because I was unhappy doing anything else. I played because I loved games. I played because I thought everyone at the table was smart and witty and I liked the repartee that was always darting back and forth. I wanted to be friends with these people.I had just sold my company and I hadn’t yet lost all my money so it wasn’t the money that brought me to the table. It was the game. The charisma. The excitement. The way people adeptly played with the chips in front of them, or threw their cards into the pot when they were out, the language of motion, the gestures, the beautiful ballet of every movement in the game.
The only time I played after those 365 days was one time I went up to Murder Inc Records about ten years later and all the same guys were playing there as if they had never moved but the table had teleported over. Irv Gotti, therapper who owned Murder Inc, won about $2000 off of me in a big pot and I left after that and didn’t play again. I went to the game with Lenny Barshack who had just sold a poker sofware company.
On the way there Lenny told me how one month after he sold his company he had a heart attack on a ski slope and had officially died.
Running a company is like being mugged. When you are mugged you get a jolt of adrenalin that SCREAMS to your body: FIGHT! or FLIGHT! But when you run a company its like you are constantly being mugged but you still stare at the computer all day. So the adrenalin builds up with nowhere to go. All the adrenalin does is keep you alive because otherwise you’d probably die from being mugged so much.
Once the stress is over (in Lenny’s case: when he sold his company) the adrenalin hits you full force. So Lenny had a heart attack one month after he sold his company and his heart went to zero for at least two minutes. Only a smart doctor brought him back to life and less than a month later we were heading over to Murder Inc Records so I could lose that final pot and then never play poker again. Poker sucks. Here’s why:
A) Everyone at the table is your friend but they are all lying to you to steal your money. I wanted to be around these grubby guys more than I wanted to be around my wife and newborn. More than I wanted to be around real friends. More than I wanted to be around my work colleagues or my family. I don’t know why. Something was wrong with me. All day long I read books about poker, and all night I would play.
I felt for the first time in years like I had a group of “buddies”. Like I was one of the guys.
Here’s the problem. We all were buddies but we spent the entire night lying and trying to take money from each other. You could think, “oh, its just a game”. But I watched some of my friends go broke and cry and borrow and beg and steal. Nobody liked losing all of their money. I watched lawyers get disbarred trying to steal enough money to play poker. I saw guys escape to Israel to avoid extradition when they lost their IRS money to the poker table.
And nobody really cared about them. A guy would stop showing up and then he would be forgotten. Nobody really cared about me. We were friends. Until we weren’t. And that was that.
B) If you find yourself playing a game all day, even Angry Birds, or Poker, or Chess, ask yourself: what might be wrong in my life? I was happy I had sold my business, but maybe I wasn’t happy working for a boss now. Or maybe I wasn’t happy in marriage. Or maybe I wasn’t happy that all of my friends were work-related and I had lost every other friend. An addiction is a symptom. Find the real genetic roots of what is going on.
By the way, not every game player is an addict. Some people make a good living at these games. You have to judge for yourself whether you are a professional or an addict. The professionals win money from the addicts who win money from the amateurs.
C) As for poker itself, and this goes for all sorts of ways to making money: you want to sit immediately to the left of the dumbest, richest person at the table. He bets, then you raise – no matter what is in your hand. Then everyone else is out and it’s just you and him. In the long run you get all his money. This applies to every business endeavor.
D) Poker is a skill game pretending to be a chance game. Many things in life are like that: sales, negotiating, entrepreneurship, etc. All of these things have the element of chance in them but the ones who are skillful will take all the money from the ones who aren’t. The problem is: most people think they are good because it’s hard to rank yourself and many people go into denial when they lose money. They tell people, “oh, I broke even” when they lost money most of the night. How do you get better at any skill game:
- – read as many books as you can written by players better than you
- – study hands and the analysis of those hands
- – study and think about your mistakes. Don’t regret your mistakes. You’ll always make mistakes. The better you are, the less mistakes you make. The only way to get better is to thoroughly analyze your mistakes. So the more mistakes you have, the more opportunities you have to get better. Of course, this applies to everything you do in life.
- – talk to people smarter than you. Try to learn from them anything you can.
E) Conspiracy theory. If you have a bad hand and someone raises you and someone then raises him, you’re going to most likely need luck to win. Back out and try again later.
There’s a theory in programming chess computers that applies to other areas of life, including this one. It’s called “conspiracy theory”. If too many things have to happen in order to bring about the situation you want, then back out of it and try again later.
For instance, if you are in love with a girl but she has three kids, is unhappily married, and lives 5000 miles away, then at least three things have to conspire simultaneously for you to ever end up with that girl. In poker, if you are facing two potential hands that are better than yours, plus you have to wait for two more rounds of betting to occur (where you can lose more money), and you are waiting for very specific cards that are unlikely to arrive, then too many things have to conspire to make the hand work. For every situation you want, determine your “conspiracy number” where you back down if that number of items has to conspire together. A conspiracy number of “three” in most things is enough for me to back down.
F) Be the Bank. I was once in Atlantic City and I was playing at a table with one of the best players I knew, Joe. Another guy at the table needed chips and Joe said, “I’ll sell you some of my chips.” So the guy handed over money and Joe sold him some of his chips (an activity that is illegal in Atlantic City but it was 4 in the morning and nobody cared.) I asked Joe later why he did that. Joe said, “Always be the bank. If you’re the source of everything at the table then it makes it harder for them to bet against you.” This is a weird version of “Give and You Shall Receive” but it works.
In September, 1999, one year to the day after I started playing every day, I stopped. I started another company instead and lost millions at it. Perhaps then I realized that all of life is a game of high stakes poker. And on every hand you risk losing everything you’ve ever worked hard for. Or maybe the final thing I learned is that it’s all just a game. And eventually you can just stop playing. A first kiss is better than winning any hand.
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