Poker, Sex and Dying is the title of a book by Juel Anderson published some time in the early 1980s. Some years after publication it was out of print and somewhat forgotten, but accidentally option investor David Caplan found a copy in a second-hand store. He was so impressed by the content that he purchased the copyrights and republished the book with the title changed to
Poker Trading, Sex and Dying. I bought the book in 2001 and recently I had the pleasure of rereading the book. Rereading good books is something I really recommend.
The book is not about trading or investing. Juel Anderson was a salesman and semi-professional poker player, both occupations that are highly dependent on understanding the mentality and psychology of both yourself and the opponent/counterpart. In poker, you need to both understand your own mindset and the opponent’s, while in investing you can only control yourself. The opponent in investing is Mr. Market, a beast you of course can’t control.
Anderson has an interesting background: he is no academic, but I will rather call him “street smart”, something I always like. He has gone the hard way, learned by trial and error and done real fieldwork, not sitting behind a desk. In addition to being a salesman and poker player, I believe at some point he was running a dating service.
It sounds like a cliche, but investing is probably one of the most challenging endeavors you can take. It takes conviction and commitment. Most don’t succeed, not because of a lack of knowledge or capabilities, but because of the inability to know their own behavior and how to control their actions. You are on your own unless you have a team to fall back on, which makes it difficult. You might be stubborn, besserwisser, pessimist, optimist, paranoid, temperamental, generous, gifted or adventurous. In investing it probably does not matter what kind of person you are as long as you know what you are and what makes your actions. When the pressure is on and the situation is critical, your dominant personality trait will trump all your other traits. Understanding your dominant personality trait dictates the most likely course of action you will take, just as much it will dictate the course of your opponent/market/customer.
Poker is a game of intense highs and lonely despair. Win three pots in a row and your memory of bad beats will disappear faster than the morning dew in the Mojave Desert. Get three bad beats in a row and you’re in danger of circumcising Fee-Fee, the family pet.
But guess what? Most people see themselves quite differently from what they really are. As such, they can be their worst enemy to achieve good results in the markets. Even worse, according to Juel Anderson about 10% believe they have traits that are completely opposite of what they really are!
Anderson believes a person can be put into one of 13 different personalities, and how they act as poker players and buyers. The book gave me some insights into my own personality and how I approach problem-solving and other people. I’m probably somewhere in between the Co-Dependent and The Reflective. But am I correct? Perhaps I shouldn’t be so sure!
All in all, the book gave me insight into figuring out how I behave under pressure and what I can do to adapt.
Here are some interesting quotes from the book:
- The biggest money burner I’ve ever known is called ”public opinion”.
- Survival is a form of winning until you can really win.
- The saddest epitaph you will ever read is this:”Here lies a man who never took a chance…. He died anyway.”
- It’s wise to remember that in gambling, the wolves always arrive before the sheep. The confusion on this issue is caused because the sheep can’t believe that the wolves often arrive in sheepskin. Where gambling and money are involved, always assume it’s Halloween and every sheep present is a wolf in drag, until proven otherwise.
- You have to do the things you don’t like in order to do some of the things you do like.
- The real secret of gambling has its roots in chaos, anarchy, randomness…aberrations in the law of normal distribution. It’s the very same law that keeps the theoretical physicists scrambling to explain the universe. It’s luck, but not dumb luck. It takes discipline and some intellect to position yourself on the right side of luck.
- Poker is an intensely emotional game. More than any other endeavor, it exposes the different personality traits in individuals. Because the stakes are high and the risk is great, personality and emotions are magnified.
- Emotions, not logic, move the world.
- Poker is a mental contest, an emotional leverage game. Mental and emotional capacities are easier to exploit than physical traits.
- Poker is the perfect game because it involves imperfect players.
- Poker is a game of intense highs and lonely despair.
- In the insurance actuarial business, there is God. This God is “The law of big numbers”.
- When the pressure is on, when the situation is critical, the result is the tyranny of our dominant personality trait.
- The very worst time to learn anything about yourself or your opponent is when you’re involved in a hand. The information is skewed, prejudical. Too often you will see only what you want to see or what you don’t want to see. If you’re involved, the information you receive and store will always be emotionally tainted.
- As a poker player, you-re always naked and exposed.
- You can’t be blind to the risk even when the odds are in your favor.
- The downfall of many brilliant individuals…..is they lose sight of the purpose it should have. Their downfall is they can’t execute (gamble).
- I could give you 100 other examples of how the game and the winning or losing of it is affected by this mere inch. …It’s not the big things that determine success. It’s the attention to and mastering of the small details that so very often decide success.