Fooled by Randomness: applied to poker

One of the gifts I got for Christmas was the book Fooled by Randomness. I just started reading it and so far I've found it to be very interesting. One topic discussed is that in the financial world, many traders who have made a lot of money and are seen as smart traders are actually just the beneficiaries of the randomness in the market, and eventually go broke. The author also argued that a trade shouldn't be judged by whether or not it made money but instead on the logic behind the trade.

Given my poker-obsessed brain, I immediately got to thinking about how much this relates to poker. Any good poker player knows to avoid results-oriented thinking (ROT), which can come in multiple forms. The most blatant example of ROT is the beginner who gets all in with the nuts, loses on the river, and wonders if the loss could have been avoided. The answer (barring some contrived bubble situation) is that getting the money in as a big favorite is a good thing, and that his subsequent bad luck is just part of the game.

Another example of ROT is when someone makes a terrible play, but because the terrible play results in winning the pot, the player feels like he made a good play. Quick example: you have 33 and raise to 3 BBs UTG at a full table. A tight player than shoves for 20 BBs. You call, the tight player has AK, and you win the pot and think you made the right play. But a tight player likely has a range of JJ+,AK, so your call was a poor one against the tight players range.

I know most of my readers already know what ROT is, but I think its important to explain it so we can examine it more deeply. As poker players, we know we shouldn't get too hung up on the results of individual hands, individual tournaments, or even individual sessions. However, I always click on the cashier button at the end of my sessions to see how much I won or lost. Most tournament players (myself included) become obsessed with results graphs on Sharkscope, and ROI and total profit on oprankings. Cash game players with their constant PokerTracker graphs are probably even worse.

Obviously a larger sample size gives a more telling indication of a player's true ability, but even that can be very misleading. For example, take me. On the two sites oprankings.com tracks (Full Tilt and Stars), I've played almost 1600 MTTs, and I've played hundreds more on Ultimate Bet. From that many MTTs, you'd think you could get a good idea of my overall tournament skill. But there are several huge problems. One is that the sample covers a time span of over 2 years. I was a completely different player in the summer of 2006 when I first deposited on UB than I am now. Also, the average player has become much stronger over that time period, thanks to the UIGEA and the myriad training sites that have been formed. And don't forget I've played in tournaments with buy-ins ranging from $1 to $500, so the strength of the opposition has been drastically different. And not all $30 freezeouts are created equal. Sometimes I'll be at a table with two strong LAGs on my left making my life miserable, and other times I'll have position on two fish trying to give their stacks away. So I don't think 1600+ tournaments over 2.5 years is anywhere close to a large enough sample to determine my true expectation in tournaments.

As more and more of my friends and relatives have learned about my poker-playing, they almost invariably ask me if I make money. Talking poker with people who know nothing about it can be frustrating, summed up by the old joke:

-"How much have you won at poker?"
-"About $20,000"
-"But how much did you lose?"

Anyways, I always try to be modest and mention that while I've made some money, there's a lot of variance and I'm certainly not making enough to support myself. But questions like that aren't just limited to poker novices. Most players often ask themselves that same question, but they phrase it slightly differently, instead asking "Am I a winning player?" or, more specifically, "Am I profitable in $50 SNGs?" or "Am I +EV at $2/$5 live cash games?"

But many players go about finding the answer in completely the wrong way, by looking towards the past. They look at their past results, usually over a sample size that is way too small, and get their answer that way. These players aren't answering the question "Am I a winning player?", they're answering "Was I a winning player?" It's a key distinction. The bottom line is that your past results don't matter when you start a tournament; what matters is the quality of your poker decisions at every decision point during that tournament. When you flop a set in that tournament, you won't get maximum value by having won a big tournament the day before, you'll get maximum value by making good poker decisions; knowing when to play the set slow to trap your opponent, or when to bet and raise aggressively.

The bottom line is to make sure you avoid thinking about results as much as possible. Instead focus on improving your decision making. I know that's my goal for 2009 and beyond. I just capped off my most profitable year ever with by far my most profitable month ever, but will that help me on Sunday in the TLB Passport freeroll? Of course not. What will help me is making the best possible decisions throughout the tournament. I was a profitable player in 2008, but I won't be in the future if I get content and don't keep trying to improve my game.

The massive amount of variance in poker is what makes it so great. Even terrible players can go on long hot streaks, run up a huge bankroll, and think they're great. But if they keep making bad decisions, they'll eventually be broke, and the people making good decisions will end up with the money. No matter who you are, if you work hard enough at your game, you'll end making the right decisions more often than not, and become a profitable player. So when setting goals for yourself in the new year, stop worrying about results and instead worry about making good decisions. Find your leaks (whether its tilting, bluffing too much, not bluffing enough, not value-betting enough, not balancing your range, etc.) and try to plug them. Make enough good decisions, and the good results will come.

Thanks for reading,

George