Value
Tuesday, 2 April 2013
I’ve been rereading my columns recently and noticed a shocking lack of macroeconomic content. Several reader letters asking me for my appraisal of the economic situation have arrived at Bluff Headquarters and I’ve finally decided to yield to pressure. So strap yourselves in.
There’s a debate in all the First World economies. Every major government has a tonne of economic debt and most have a yearly deficit. Everyone agrees it’s a big problem but they also don’t really do too much to change things. In poker terms, they’re in hundreds of thousands of “make-up” and are trying to fix it by playing more. It’s probably not going to work out but I wouldn’t worry, they’ve got top men talking about it. Top men.
Austerity seems to be the watchword of the day. Up until recently it was the watchword of a few Dickens characters and that was about it.
Apparently, this means no one can spend anything ever and everyone gets very worried about large numbers, like the deficit, which they can’t influence or control. In these “austere” times you’re hearing a lot of advice about cutting your own spending or “looking after the pennies so the pounds take care of themselves”. That can’t be bad advice, but it’s half the equation and it probably should be significantly less than half.
The other side of our fiscal coin is revenue generation – or if you prefer, as I do, wealth generation. I’m not talking about raising taxes but creating new revenue through business and entrepreneurship; after all, this is what made our economy so large and bountiful in the first place.
The idea translates to personal finances as well – reducing spending may make sense but a far more desirable option is to increase income or find new ways to generate wealth. Often this is a lot easier to type than to do and thrift advice like “avoid Starbucks and take your own coffee to work” is far more readily available. However, it’s true to say that the path to personal wealth doesn’t have much to do with saving a quid here or there – the same as the path to national wealth doesn’t have much to do with raising taxes slightly or cutting benefits a bit.
As with our country’s great and good (and I’m playing fast and loose with both words), poker players are often confused about where financial prosperity comes from. From the outside, it seems like most players think the answer to more profit is “to make more sick bluffs”, in combination with “to stop getting unlucky with my good hands”. Now, both these things might help a bit but miss the main point – your biggest source of profit will almost always be having the best hand and someone paying you with a worse hand. I heard a great quote recently which is attributed to Barry Greenstein, but then all great poker quotes either go down to him or Doyle, so who knows? It’s something like, “Players shouldn’t get angry when they have a bad beat because that’s out of their control but should get angry when they miss a value bet because that’s in their control”.
Think about that quote and ask yourself how many times this month you’ve got upset because you’ve been unlucky in a hand and then think about how many times you’ve got angry with yourself for missing a value bet. If the second number is greater than the first – congratulations, you are a fully enlightened player and may now proceed to your job in the Treasury to help sort out this debacle. If not, you’re normal, so don’t panic but resolve today to start changing your view.
Being paid with the best hand is how we win at poker, and yet most players spend very little time thinking about it or practising to become more efficient at it. I used to explain how someone could play poker for a living to non-players by saying, “In the long run everyone has the same luck but the good players lose less with their bad cards and win more with their good cards”. That’s still a decent description of what a winning player does, but we should put particular emphasis on getting paid and consider it a major mistake when we don’t.
Put it this way – a river value-bet in a single raised (not three-bet) pot can be worth 20 big blinds or more. That can be the win-rate of a decent player for a couple of hours’ work in one bet. If you miss those bets or don’t extract the maximum, you’re leaving money on the table in a major way and it’s going to be really tough for you to win at the pokers. As a quick tip: try adding at least 20% to every value bet you make for a couple of sessions and notice how little difference it makes to how often you get called. Congratulations, you just put 20% on your bottom line and the great news is, I’m only asking you to send me half of it. You’re welcome.
Right, I’m off to apply for several small business loans to start poker farms so I can have hundreds of young people value-betting for me while I sleep. We may be all in this together but once you know where the money comes from you can be first out!