7 ms·

"Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin." N

"Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin." Not so. Top poker players are still gambling, but have an excellent understanding of the risks. Their skill doesn't turn them into investors. Gambling is taking a high risk bet. Whether the expected pay off is high enough to justify the risk and whether you can afford to lose the bet is a separate issue.

spydum 6y ago
I thought the exact same thing. I suspect a better definition would be a wager based on random chance. Markets aren't "random", they are just suitibly complex enough to seem like it. Some people apply algorithms and emotional analysis to predict behavior. This might sound like poker, but I would argue all of the influences in a market are clearly visible. In a game of chance like poker, card ordering is still random (yes you have probability of predicting next card, but you can't see it until it happens).
- kqr 6y ago
  Very few (if any) things in life on a non-quantum scale are actually random. Roulette results, dice throws, shuffled cards, etc, are all the results of complex and hard-to-predict processes, but they are no more random than the markets. What people mean when they say that something is random on a non-quantum scale is this: the process is so complicated and hard to predict that our best models of the process incorporate a significant amount of randomness. This is the case for markets too, where a multifractal random walk is about the best model we have.
PragmaticPulp 6y ago
Anecdotally, a lot of the new stock and crypto investors on the internet this year hold no illusions that they’re investing. The pop-culture mindset is that the stock market is just gambling, so they might as well bet big with long shot companies and options. The common sentiments are “I’m only investing what I can afford to lose” and “but what if this is the next GameStop/Bitcoin?” They’re entering with a mindset that betting it all is fine because they’ve mentally written off the money. I’ve been using this as an opportunity to introduce friends and family to more passive, long-term investment strategies but the skepticism is strong.
- eloff 6y ago
  Would one expect any different from the instant gratification generation? It seems like safer, long term investments that require lots of patience are the opposite of what we've been trained for by the internet. Lots of generalizations there, but if it's true that millennials have more difficulty embracing delayed gratification, which I think is likely, then a riskier more speculative investment strategy seems to naturally follow from that. It might also be additionally influenced by record poor returns from safer types of investments. To be clear, I'm allowed to pick on millennials because I am one, and I've been burned bad this last week on my speculative "investments". So it applies to me as well.
Raidion 6y ago
I (and I think a lot of poker players) would disagree. Everything in life involves some sort of risk, but doesn't mean it's gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % different than the player odds. You say poker players are gambling and then say gambling is taking a high risk bet. Good poker players make positive expected value bets, and have correct bet sizing (via Kelly Criterion) that means they will be able to survive variance and win.
- hgjnhikn 6y ago
  Bet sizing in poker is not determined by the Kelly criterion, it's determined by maximum expected value with at most a tiny penalty for high risk. Where you could in theory apply the Kelly criterion is in selecting which stakes to play at. But in practice it seems more chosen through rules of thumb / common sense / feeling than an actual application of the Kelly criterion.
  - Raidion 6y ago
    Yes, exactly. Bets in the game are determined if they are plus EV, but what game you sit at is determined by Kelly Criterion (or usually a 20-25 buyin roll depending on the game, your life roll, etc)
- deleted 6y ago
  [deleted]
- sneak 6y ago
  > You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. This statement seems uncontroversial, but I am not sure it is true. Driving to the store is one of the riskiest activities I (used to) regularly engage in. Now that I do it (much) less, I do indeed perform a risk/reward analysis of getting into a car (when before it was automatic, with an assumed zero risk due to normalcy bias). It is possible that under a strict definition we are indeed gambling with our lives each time we get in an automobile.
hntrader 6y ago
"Top poker players are still gambling." This all hinges on how we define "gambling". A lot of top poker pros do not subscribe to the definition that includes them as gamblers, since colloquially "gambling" isn't always synonymous with the game itself but instead connotes reckless abandon and negative EV decision making.
- ryandrake 6y ago
  Everyone has a different definition of gambling. I don't think it has to do with EV. Poker players can definitely achieve long-term, sustainable +EV, especially in rake-free games, because they are playing against other players and not a house. I still think it's gambling (along with the stock market), which to me simply means wagering something of value on a future event whose outcome is unknown.
  - porb121 6y ago
    With a wide interpretation of "wager", your definition includes lots of human behavior that no one would traditionally call gambling, because all future events have unknown outcomes, and most future events have appreciably unknown ones.
    - kqr 6y ago
      I'm not who you responded to, but I'm fine with that broad definition. It is practical to find those mathematical equivalences that are easy to find when you apply the analysis of gambling on most endeavours.
vmception 6y ago
understanding the expected value of your financial game is important understanding that the distinction between “gambling” and “this other respected thing” is purely cultural is even more important you are facing people, around the world, who do not need to rationalize a difference for any cultural, personal, religious, legal or future legal reason. even their community does not care yet you do, you are already disadvantaged by spending any cycles on this
devoutsalsa 6y ago
Good poker players are good at taking money from not good poker players. 2 good poker players going head to head is like Yoda dueling Palpatine. 1 good player at a table of not good players is like Anakin with a lightsaber in a room full of younglings.
JoeAltmaier 6y ago
Don't have to be a top player, to be gambling?

spydum 6y ago

I thought the exact same thing. I suspect a better definition would be a wager based on random chance. Markets aren't "random", they are just suitibly complex enough to seem like it. Some people apply algorithms and emotional analysis to predict behavior. This might sound like poker, but I would argue all of the influences in a market are clearly visible. In a game of chance like poker, card ordering is still random (yes you have probability of predicting next card, but you can't see it until it happens).

kqr 6y ago
Very few (if any) things in life on a non-quantum scale are actually random. Roulette results, dice throws, shuffled cards, etc, are all the results of complex and hard-to-predict processes, but they are no more random than the markets. What people mean when they say that something is random on a non-quantum scale is this: the process is so complicated and hard to predict that our best models of the process incorporate a significant amount of randomness. This is the case for markets too, where a multifractal random walk is about the best model we have.

PragmaticPulp 6y ago

Anecdotally, a lot of the new stock and crypto investors on the internet this year hold no illusions that they’re investing. The pop-culture mindset is that the stock market is just gambling, so they might as well bet big with long shot companies and options. The common sentiments are “I’m only investing what I can afford to lose” and “but what if this is the next GameStop/Bitcoin?” They’re entering with a mindset that betting it all is fine because they’ve mentally written off the money. I’ve been using this as an opportunity to introduce friends and family to more passive, long-term investment strategies but the skepticism is strong.

eloff 6y ago
Would one expect any different from the instant gratification generation? It seems like safer, long term investments that require lots of patience are the opposite of what we've been trained for by the internet. Lots of generalizations there, but if it's true that millennials have more difficulty embracing delayed gratification, which I think is likely, then a riskier more speculative investment strategy seems to naturally follow from that. It might also be additionally influenced by record poor returns from safer types of investments. To be clear, I'm allowed to pick on millennials because I am one, and I've been burned bad this last week on my speculative "investments". So it applies to me as well.

Raidion 6y ago

I (and I think a lot of poker players) would disagree. Everything in life involves some sort of risk, but doesn't mean it's gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % different than the player odds. You say poker players are gambling and then say gambling is taking a high risk bet. Good poker players make positive expected value bets, and have correct bet sizing (via Kelly Criterion) that means they will be able to survive variance and win.

hgjnhikn 6y ago
Bet sizing in poker is not determined by the Kelly criterion, it's determined by maximum expected value with at most a tiny penalty for high risk. Where you could in theory apply the Kelly criterion is in selecting which stakes to play at. But in practice it seems more chosen through rules of thumb / common sense / feeling than an actual application of the Kelly criterion.
- Raidion 6y ago
  Yes, exactly. Bets in the game are determined if they are plus EV, but what game you sit at is determined by Kelly Criterion (or usually a 20-25 buyin roll depending on the game, your life roll, etc)
deleted 6y ago
[deleted]
sneak 6y ago
> You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. This statement seems uncontroversial, but I am not sure it is true. Driving to the store is one of the riskiest activities I (used to) regularly engage in. Now that I do it (much) less, I do indeed perform a risk/reward analysis of getting into a car (when before it was automatic, with an assumed zero risk due to normalcy bias). It is possible that under a strict definition we are indeed gambling with our lives each time we get in an automobile.

hntrader 6y ago

"Top poker players are still gambling." This all hinges on how we define "gambling". A lot of top poker pros do not subscribe to the definition that includes them as gamblers, since colloquially "gambling" isn't always synonymous with the game itself but instead connotes reckless abandon and negative EV decision making.

ryandrake 6y ago
Everyone has a different definition of gambling. I don't think it has to do with EV. Poker players can definitely achieve long-term, sustainable +EV, especially in rake-free games, because they are playing against other players and not a house. I still think it's gambling (along with the stock market), which to me simply means wagering something of value on a future event whose outcome is unknown.
- porb121 6y ago
  With a wide interpretation of "wager", your definition includes lots of human behavior that no one would traditionally call gambling, because all future events have unknown outcomes, and most future events have appreciably unknown ones.
  - kqr 6y ago
    I'm not who you responded to, but I'm fine with that broad definition. It is practical to find those mathematical equivalences that are easy to find when you apply the analysis of gambling on most endeavours.

vmception 6y ago

understanding the expected value of your financial game is important understanding that the distinction between “gambling” and “this other respected thing” is purely cultural is even more important you are facing people, around the world, who do not need to rationalize a difference for any cultural, personal, religious, legal or future legal reason. even their community does not care yet you do, you are already disadvantaged by spending any cycles on this

devoutsalsa 6y ago

Good poker players are good at taking money from not good poker players. 2 good poker players going head to head is like Yoda dueling Palpatine. 1 good player at a table of not good players is like Anakin with a lightsaber in a room full of younglings.

JoeAltmaier 6y ago

Don't have to be a top player, to be gambling?