Life lessons from poker - 포커에서 배운 인생 교훈

출처 : https://thiccythot.substack.com/p/life-lessons-from-poker

There are two ways we miscalibrate risk.

1. We risk too much on things that are low conviction

2. We risk too little on things that are high conviction

I learned these lessons in poker and in trading and they have helped me reason about broader life. I call them the fold pre principle and the pocket ace principle.

the fold pre principle

On poker forums there’s a running gag. Whenever someone posts a complicated hand history and asks, “What should I have done here?” the top reply is “fold pre.”

Translation: You never should have played that hand in the first place.

It's a snarky answer that skips all of the nuance but that’s exactly the point. The simplest fix was to never enter that low conviction spot at all. Everyone knows that they should cut their losers early but the fold pre principle is to avoid low conviction bets entirely.

In trading you see this manifest as someone who takes a low conviction trade and then refuses to stop out of it, doubling and tripling down until either they are back at breakeven or they have blown up their account. Traders underestimate how much losing money distorts their judgment, creating a left tail doom spiral.

You see these martingales in real life as well.

• An unhappy couple clings to the relationship because “we have so much history.”

• A friend stays at a dead end job promising to quit “after one more year.”

A common litmus test to tell if you are in one of these situations is to ask yourself if you were free of these commitments at no cost, would you still choose it today?

• Would you re-enter the position?

• Would you get back into the relationship?

• Would you reapply for the job?

Poker players say fold pre, traders say cut your losers early, tech founders say fail fast. They all orbit the same law. Sunk cost habits kill asymmetric bets. If you don’t learn to prune the losing bets quickly, every “small” risk you take hides a fat left tail that can siphon your time, resources, and emotions.

I think it’s important for a person to go through a prolonged negative feedback loop or two. I wasted years with an addiction to video games and weed. Spewed off multiple poker bankrolls in fits of rage. Stayed in a relationship for too long out of nostalgia. Pushed through a startup idea I never truly believed in because quitting felt like failure.

Each scar has taught me to distrust certain impulsive tendencies that have led me off of cliffs. As I age and understand myself better, I am improving at folding earlier, and avoiding certain hands altogether.

pocket ace principle

The pocket ace principle is:

1. When you're dealt pocket aces, bet the house.

2. Recognizing pocket aces becomes second nature with experience

The world is winner-takes-most and outcomes distributed along power laws. Poker is no different. In a live sample of 1 million hands

1

, the top 20 starting hands (88+, AJo+) capture almost all of the profit in the game and the other hands bleed it all back. If you can play only premium hands without others noticing, you absolutely should.

1 million hand sample from pokerroom.com

In poker that hand strength is trivial to simulate, ...