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Why are the rich always protrayed as hard working?

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posted on Mar, 1 2014 @ 09:49 PM
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reply to post by TheLegend
 


I'm somewhat aware of making a living off of poker, my point however was that it's a high risk game that you have to be really good at. If you go all in on a 98% hand 20 times over the course of a year you're running a 33.24% chance of ending up with nothing. Part of going in on poker is always making sure you keep enough of a bankroll in reserve that you can recover from those rare bad hands because they can and do happen. Gambling and investing are similar in a lot of ways, and one way is that you never put all your eggs in one basket. In investing that's diversification and in gambling that's keeping a bankroll in reserve, because if you don't have that bankroll you can't smooth out variance.

So we're back to my initial statement, going all in on a 98% hand is considerably worse than investing in junk bonds which are among the worst investments. That's not to say you can't make money on it, plenty of people do, but plenty more lose everything because they did everything right but got unlucky... it's important to keep perspective on just how viable it is. This is true of every 0 sum game.

If you're 90% to win a game, you're 1/10000 to lose all 4. This is where my ignorance comes in as I don't know how long the average poker hand lasts but if it's 1 minute per and you're 90% 1 in 5 games (I know that's high), that's a situation that occurs once a month (if you're playing for a few hours every day) so not terribly uncommon.

Because I deal with percentages day in and day out... and have had to explain such things to people many times over the years I can say fairly conclusively that the vast majority of people are bad at evaluating percentages, 0-5% often translates to 0% while 95-99% often translates to 100%. Something like 80% translates into rarely losing rather than losing all the time, and so on. My personal favorite is the evaluation of 99.99% per repetition over say 50,000 repetitions. Most people can not properly evaluate that that's less than 1%.




posted on Mar, 2 2014 @ 04:30 AM
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reply to post by Aazadan
 



In investing that's diversification and in gambling that's keeping a bankroll in reserve, because if you don't have that bankroll you can't smooth out variance.


Precisely. Best to avoid a situation where the risk is your entire bankroll. E.g. if I had $3,000 bankroll, yet only $200 at risk (max buy-in), then shoving it with 98% favor would be an ideal setup. If I had more bankroll, and could have bought back in, I would have fished him in the long-term.

Using eggs...I got into a situation where everyone had a two or more, except me, and we were all putting 1 at risk on the smashing table vs each other. I shouldn't have been there in the first place and acknowledged my mistake as soon as that game was played 2 years ago. As you said, I had no chance to smooth out variance, and didn't have a chance to make my money back vs their less favorable plays.

Btw, what RTS did/do you play? By your age, perhaps AoC?
I was ranked #1 on 3 different RTS supremacy ladders over a few years. AoM (Age of Mythology), AoM:TT (expansion) and BFME II: RotWK (Rise of the Witch King).





 
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