
What Winning $250k at Poker Taught Me About Money - wallflower
https://www.thecut.com/2019/03/maria-konnikova-won-poker-tournament.html
======
kadabra9
Tournament poker is just brutal. It's entirely common to go 15, 20 tournaments
without cashing. You can play great poker, sometimes over the span of a few
days, and suddenly get hit with a cold deck or get unlucky and poof you are
eliminated with nothing, along with your chance at a 5 or 6 figure top prize.
Then you have to suck it back up and move on to the next one. The variance is
just insane, which is why a lot of professional players are backed, or sell
some of their action or swap with other players.

I played a ton online before the Black Friday days and did pretty well, and
will usually try to play a few big live tournaments a year, but these days I
mostly just play cash games as a fun hobby and a way to grind out some extra
income. There's less variance and the money is more consistent.

That being said, as brutal as the swings in tournaments are, cash games have
nothing like the rush of running deep in a poker tournament. The intensity and
increase in stakes/prizes as the blinds move up and more players get knocked
out and you inch closer to the big money is almost like chasing a high. So for
me, cash games are the way to go if your goal in poker is to make money, but
tournaments are a fun way to chase the dragon from time to time. I personally
don't think I would have the stomach to play tournaments full time though.

~~~
IshKebab
This is why I don't really like poker. There's just too much variance. Unless
you play again and again and again there's not much correlation between skill
and the winner.

I think it's why people also believe there is "beginners' luck" \- there isn't
really - the entire game has tons of luck. But when confronted with someone
who clearly isn't skilled _but wins anyway_ , poker fans really don't want to
face the reality that the game is mostly luck.

Another issue with poker - at least Texas Hold'em - is that the best strategy
is folding 90% of the time, which is just boring.

I'm sure there are much better bluffing games.

~~~
QuotedForTruth
The variance is also what allows poker to thrive and pro players to have an
income though. Since poker is zero sum (really negative because of the
casino's take) there has to be a steady supply of losing money playing. That
means bad players have to believe they have a shot. If they never or very
rarely won against higher skilled players, they'd dry up.

Imagine casinos that had cash chess tables or basketball courts. Would you
have enough dead money willing to risk playing? I'd wager no. You'd get
occasional fish willing to try but they'd get dunked on and go home. Without
enough new money, the game would dry up as the best players and the casino
accumulate all the rest.

~~~
rahulrrixe
This is true for newbie investor after reading a book and investing in Wall-
Street. They almost always lose the money and again Wall Street releases a new
easy book on investing.

I find a huge co-relation between how poker and wall street is aligned.

~~~
kgwgk
A book on the relationship between poker and wall street:

[https://www.cfapubs.org/doi/full/10.2469/br.v2.n1.2](https://www.cfapubs.org/doi/full/10.2469/br.v2.n1.2)

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Tangokat
I used to play a lot of poker online back in the day, two lessons stuck with
me:

Speaking to the variance of the game: "Eventually you will run worse than you
ever thought possible"

Poker teaches, contrary to most business literature, to not be results
oriented. It is the decision not the result that matters. "You can do
everything right and still lose".

~~~
kaycebasques
What’s the opposite of results-oriented in this case? I.e. what should you
orient toward, if not results?

~~~
gagagababa
To maximize expected value (EV). You can go all in with AA pre-flop and get a
bad beat from someone with 27o. While the result is bad (you lost this time),
you made a +EV decision because you were ~80% favorite to win so over the long
run this move will actually be profitable.

~~~
kaycebasques
I'm seeing a lot of responses related to EV. Is this an evolutionarily stable
strategy? Is there any way for a minority to exploit every one's focus on EV?
I understand that, mathematically, this sounds ridiculous. But I'm wondering
if, psychologically, there's a way to exploit everyone's EV mindset.

~~~
friedman23
So the first thing to mention is that psychology has very little to do with
playing good poker.

Secondly we'll define perfect poker as game theory optimal poker. Game theory
optimal poker better known as GTO poker is by definition unexploitable. In the
long run, two people playing GTO poker against eachother neither player will
win money.

GTO poker is not necessarily the form of poker that will make the most money.
Given that 99% of the time you are playing versus amateurs who do not know
sound poker strategy you can adjust your play style in order to exploit the
mistakes of the other players. When you adjust you are actually exposing
yourself to better players. Better players can identify how you are adjusting
to take advantage of bad players and in turn adjust themselves to take
advantage of the weaknesses you are introducing into your game.

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tie_
> When it comes to you, nothing is too good to be true. It’s too good to be
> true for someone else. But you always think, “Oh, I deserve this. This is
> evidence of how smart I was in making this decision.” Poker forces you to
> let go of that very, very quickly.

That is indeed a very valuable lesson!

~~~
module0000
Day trading will teach a very similar lesson, in no time flat :)

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nickjj
Online poker was really interesting before Black Friday. I used to play back
then. Nothing crazy, about 60,000 hands of NLHE at low stakes cash games for
fun.

But the really interesting thing to me was how successful the video learning
platform SAAS business was for Poker. These sites started to pop up where high
level players would record their sessions and talk through their hands, then
you paid per month for access to these videos. I remember when Card Runners[0]
just came out.

It was one of those niches that lined up perfect for a SAAS business. No
shortage of games, lots of online pros playing with different styles, and some
of them were really good at talking through their thought process. All they
had to do was play (which they were doing already) and comment on their hands.

[0]:
[https://en.wikipedia.org/wiki/CardRunners](https://en.wikipedia.org/wiki/CardRunners)

~~~
dbancajas
hey man! used to follow the scene too! I remember cardrunners and
deucescracked! Tri Ng also had his 99$ book w/c i beleive was scammy. Did you
win a lot?

~~~
nickjj
I came out ahead in the end but it wasn't a lot. I deposited $50 on PS
initially, then grinded the micro stakes and mostly hovered around NL25 while
taking shots at NL50. I still remember how gratifying it was to purchase
PokerTracker with some winnings.

It's funny to think back then I was sitting there 4-6 tabling NL10 with a PT
HUD thinking I was on the top of the poker world.

How about you?

------
DigiMortal
"No one knows what cards you have. All they know is the information that you
convey. I think that’s a very valuable thing to remember in any negotiation."

~~~
comboy
Well, except business is not zero sum. The game is not over when you lay all
your cards on the table.

~~~
raldi
Nor is poker. You'll play with the same people over and over.

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hnick
> Women make good poker players because in a male-driven society, we’ve had to
> be much more sensitive to social cues. We’ve had to read people much better.
> I’m not saying women are inherently better at this. I think we’ve had to
> become better at it as a survival mechanism. Because men can be boors and
> still rule the world, but women really need to know what’s going on.

It's a common belief that women are more sensitive to emotional cues than men,
but I've never heard it put like this. Interesting perspective.

~~~
alexashka
Poker is completely dominated by men, so I don't know what that is referring
to. Poker is hardly about social cues - some of the best players simply sit
staring at the same spot and wait a very similar amount of time for any non-
trivial decision. It's not very exciting, but boy is it effective.

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dbancajas
I used to railbird the likes of Tom Dwan(durrr), Ivey, Patric antonious
(patonious), ilary sahamies etc.. at full tilt poker. 100K in virtual cash
transferring hands in a matter of seconds. Amazing. Durrr even had the
million-dollar challenge with jungleman (Daniel Cates). I think he lost it.
These were the guys who understood the game on a different level and basically
cleaned-out live televised poker cash games (poker after dark anyone?). I
aspired to be like them (mostly for the wrong reasons) but was so busy being a
phd student. Lol. I heard they go to Macau to play live cash and some were
even investigated for money laundering. Wondered what happened to those guys.

------
RyanRies
In the article, she is quoted as saying that winnings from poker can be taxed
at 60%. But I Googled it and the first few sites that I clicked on say more
like 25%. What am I missing?

~~~
cjlars
Professional gamblers are supposed to pay self employment tax, which is 15.3%
(half is deductible), and then all ordinary income taxes. So that's a top
federal rate of 37%, plus -- she's presumably a New York City resident --
another 8.82% at the top rate for NY and 3.82% for NYC. That's about 65%
gross, then once you factor in the deduction... about a 60% net marginal tax
rate.

So she's not wrong, but she'd only be hitting those numbers if she won a
really big tournament or two.

Edit: I forgot that the self employment tax phases out at ~$120k labor income,
so she'd need a lot of investment income (or a high earning spouse) to pay
both the top marginal income tax rates and the and 15% employment tax.

~~~
RyanRies
Dear god... that means that the government will win more from your poker
playing than you _ever_ will!

~~~
lwhalen
"And this is how Republicans are made...." :-D

~~~
webninja
I used to believe this sentiment about 8 years ago, but after many republican
presidents, our nation is only further in debt. Only Bernie Sanders seems to
care about our nation’s increasing debt and he’s a registered independent.

------
droithomme
Interesting article. Interesting that her net take was $10,000 after
subtracting expenses from the $200k win.

I wouldn't say she won that money, I'd say she earned it. Lottery one wins at
and is pure luck. Poker is some luck but mostly skill and persistance.

FWIW, she refers to it as earnings and income in the quotes in the article.

~~~
splonk
Yeah, the important thing is to ignore any number you ever see in a headline
about poker winnings, because it basically just means gross revenues. It says
nothing at all about whether someone actually made money. (Okay, so it's
pretty hard to lose all of a really big score, but the sort of people who make
them are also disproportionately likely to be able to lose them in a hurry as
well).

~~~
rightbyte
That's true. I never though about it that way.

Where I live there's a commercial for online Casino ("Mr Green") where a woman
hit a 2,5 million approx. USD jackpot, and 2 years later she won 5 million
USD.

The commercial was reported for fraud by someone of the public because it was
unbelievable, but the casino showed for the investigators that the winnings
were real.

However, guessing that the woman probably played for a lot of her winnings, a
second jackpot is not that improbable. And I guess she didn't stop there
either ...

That was a game of pure luck though, and Poker seems to be somewhat equal that
off golf in skill vs luck at top level.

[https://pdfs.semanticscholar.org/9469/72de84cd72f5f7edbcedf4...](https://pdfs.semanticscholar.org/9469/72de84cd72f5f7edbcedf4d950f990473312.pdf)

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pcmaffey
Making money in poker is like making money in crypto. Done best when there are
lots of fish.

------
edoo
If you can play a perfect game you need about $300k bankroll to earn about
$60k/year on the tournament circuit. It just isn't the same any more, all the
real players know the theory AND can read people.

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sigi45
After always wanting to play poker in a casino, 2 years ago I did.

I payed 100$ sat down, played a few hands and 20 minutes lateri was done.

I liked the experience and I will not play again in a casino:

\- dealer is really quick. It's stress and you can't think \- you can see
super quick who will lose all at the end of the day and who is here to grab it
from the others \- they don't like to talk just Don't see the appeal to learn
to become so much better so that I might become good. Prefer to just go to
work

~~~
mettamage
Hmm... I played online poker as a kid, between 16 to 18 for negligleble
amounts. When I came into the casino, I was nervous but my math mind took
over. I did well enough to get in the money of sit 'n go tables.

I got awkward in the beginning, by unintentionally straddle betting and
violating all kinds of other table rules that I didn't know. But that irons
out quite quickly.

It's a fun experience to feel awkward and realize you're still going to go
away with the price.

~~~
sigi45
Sure but when you go away with the price, 9 others don't :)

And every game was like 5$ min to just see the cards. 100/5 20 games later you
have to win something.

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l0b0
On a related note, is anyone familiar with any decent online poker app which
is not scummy? I'm OK with ads in this space, or a one-time payment, but not
in-app purchase of chips - I played Pokerist for a week, and I'm pretty sure
they switch the choice of tables after a while to bomb people and get them to
buy chips.

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minikites
There's a great video by Jon Bois in his "Pretty Good" series about poker
tournaments and he touches on the subject of internet poker too:

[https://www.youtube.com/watch?v=CTUZ2SrSxsA](https://www.youtube.com/watch?v=CTUZ2SrSxsA)

------
MR4D
Great article with many insights that I never would have expected!

This quote in particular gave me an interesting thought:

>> Trust everyone, and people will take advantage of you.

>> Distrust too much? That’s just as bad — you’re going to be the one calling
every hand, thinking everyone’s always bluffing you, out to get you.

>> You need to figure out when to distrust and when to trust.

That last line is interesting, especially when compared to mutual funds. I
wonder how comparable poker outcomes at a tournament (or many tournaments over
time) compare to an active fund manager?

And then that leads me to wonder what a simple ETF comparison would be in
poker - someone who always calls?

It would be interesting to see how that "ETF" poker player would compare the
the rest of the people in a tournament.

Obviously a top poker player will not fail out early very frequently, so
that's one difference, but on average, what does the "average" poker player at
a tournament look like number wise?

~~~
MFLoon
I'm not super familiar with how ETFs work, but I'm guessing the parallel would
be ETFs as ABC players making safe, low variance plays, while the actively
managed funds would be a pro looking to capture all of their equity edges,
regardless of the assumed variance.

It is well known how they respectively fare in tournaments - the ETF players
make it into the money at a somewhat higher rate, but will typically have a
middling to low stack with little hope of making a deep run, so they have a
lot of low but positive ROI results - a mincash will typically be around
50-100% ROI. However they still may not eke out enough cashes over the long
run to be +ROI. The Hedge Fund players on the other hand tend to bust out
earlier but when they do run well will amass a huge stack and be well
positioned to make a run at winning the whole thing - most of their results
will be losses, but because of the super steep payout structures of
tournaments, a single big-field victory can be well over 10000% ROI, so a
single "bink" can overcome dozens of losses.

~~~
MR4D
Sounds like you just described "MoneyBall" :)

Seriously, though - thanks for the insight. Hadn't thought of comparing to a
hedge fund, and after reading your description, it seems obvious.

To add some color to an ETF analogy, an ETF in the financial markets is
basically just following an index, which is often created by a firm like S&P
(and there are over a thousand of those indices). So, one index may just be
"buy all the companies that have dividends", or "buy all companies that have a
price to earnings ratio greater than average", or "buy all companies listed on
the US stock market".

I guess in poker it could be "call on everything", or "fold unless you have at
least a three-of-a-kind". Basically, it would be mechanical. Of course, you
can have reasonably complex ETF algorithms that have multi-pass filters (such
as P/E ratios, Debt/Equity ratios, Dividend minimums, etc.) all in some
combination. So maybe there could be something complicated like "bet 1% of
your holdings whenever you had a pair, and bet 2% if at least one player
folds." This is just a made-up example, but the rules could probably get
intricate based on the math and different situations.

------
caprese
> When it comes to you, nothing is too good to be true. It’s too good to be
> true for someone else. But you always think, “Oh, I deserve this. This is
> evidence of how smart I was in making this decision.”

Powerful

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solotronics
I wonder if anyone has tried to play poker online with something like AlphaGo.

~~~
6nf
Bots are part of online poker, pretty much since day 1. There's a lot of time
and money going into poker bots and other types of automatic assistants and
monitoring of games to find fish etc etc. Anything you can think of is there.

And of course on the other side of the story, a lot of effort goes into
finding and banning bot accounts, proving that collusion is happening etc.

------
dawhizkid
Is there any game that offers so many "life lessons" than Poker?

~~~
dragontamer
Go is pretty good at "life lessons" too.

The game is over when both players decide it is over (skipping a turn). Its
usually not worth it to try to kill opponents: the winning strategy is to
typically capture territory. There's always more territory (especially in the
early game) rather than aiming for conflict.

You've got to know when to fight battles, you've got to know when to sacrifice
pieces. The entire opening is basically tradition and still has no unifying
theory (there's 3-4 opening and a Joseki for how professionals seem to play,
but there's no hard proof that this is the optimal strategy). So its still a
very open-ended game with a lot of unknowns.

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arisAlexis
again misleading title. she won 250k but gained 10k during the year.

