Because I was involved in the “poker bubble” last decade, I saw the link to the housing bubble and overall easy monetary policy. Playing poker in Las Vegas, Arizona, and southern California, it was not hard to see how much dumb cash money was floating around those casinos, waiting to be taken by solid poker players. It did not always work out that way, and there were plenty of nights where math (favored hands with more cards to come) was trumped by short-term luck, but in the end math and discipline won out for me. You had plenty of situations where gamblers bought homes with no money down in Vegas, and then turned around to get home equity loans to use the cash as gambling money. Other types of loans were easy to come by as well.
I had three cardinal rules while playing full-time middle/high limit Texas Hold ‘em out west, paying off my graduate school debt along the way:
- Only play when I find a game where I figure to have an edge over the other players, when I felt I was mentally and emotionally sharp.
- Never loan or borrow money to or from anyone.
- Never drink at the casino (save this exception I wrote about here)
Why not stay out there and play full-time now in lieu of dedicating myself to the markets? The poker bubble burst several years ago along with the debt bubble. While The Fed has left rates low, easy cash money with which to gamble is not easy to come by for the “marks” in the games I play. In other words, many of the suckers went broke and there was not a huge new wave of them to come and take their place. In essence, I would be putting my ego above my wallet by playing full-time poker in a post-bubble era, in slightly tougher games with less “action.”
Beyond that, I find what I do now infinitely more rewarding than the lifestyle that is being a successful poker player. Anyone can take cash into a casino and call themselves a gambler, but being a successful poker player and standing up to the countless wrong turns/vices that many can and do take is far more of a daily grind than the market will ever be to me.
I used to go to sleep at 7 or 8 o’clock at night and wake up around 2:30 a.m. to go to the casino in order to push my edge. By the time I got to the casino and was ready to play at that hour, most of the players would either be tired or drunk, and likely losing, as the winners were wrapping up a good session. It was not a lifestyle conducive to enjoying your social time much, as the people sitting at your poker table, however pleasant they would be, ultimately wanted to take every last cent you had to your name. You had to force yourself to be a bit paranoid and assume every person you met wanted to hustle you dry.
No, I was certainly not finding a cure for cancer, nor teaching impaired children how to read and write. Society ought not to have any sympathy for casino gamblers, and I knew I was on my own regardless of the outcome. But I did enjoy the challenge of keeping my guard up in the toughest of situations to make consistent money. I thrived on surviving while many around me went broke due to them placing the glamor of gambling and Las Vegas over the chess match that it truly is. I relied on my background as a tournament chess player as a kid, and my fascination with the strategy and coaching aspects while playing football and basketball later on.
I thrive on competition, and always have. Pressure breaks the weak or forms the diamond. It is very easy on the internet to claim to be something that you are not. To be sure, a few trolls here and there over the years have claimed I am nothing but this, that, or the other thing. In the end, though, the marketplace of readers and subscribers have voted resoundingly in my favor because I am indeed the exception to the rule–I am not after short-term greed. I believe in long-term success and forging lasting relationships through trust and integrity. Putting it all out there, consistently and with heart, every single day is the main way I strive to achieve that goal with my readers and subscribers.
The best way to do that is also by forgoing all of the short-term hustles you see on the web on a daily basis. I saw it with my own eyes every single day in casinos around the country, and I see it every day with online finance. Guys who try to flip a startup social media firm, pump-and-dump penny stock traders, they could not care less about long-term success, their members, users, subscribers, or readers. They want a quick hustle and then to pick up and leave the table. They are called “hit and run artists” in poker, guys who sit down, win a big hand, and then leave the table. Eventually, though, they either realize that is not a long-term strategy for success, or they hit-and-run themselves out of money.
Always being aware of the situation is also key. Consider the following clip from final table of the World Series of Poker Main Event 2005, right near the top of the housing bubble. You want irony? How about this–The final two players were both mortgage brokers!