I love poker. I really do, there's something about it that's slightly geeky but quite risky and that appeals greatly to a snowboarding programmer. I've learnt some of the finer points over the past few years by picking up tips and hints from the pros, from reading books, studying odds and statistical methodologies through extended mathematics and watching lots of poker on tv/online. One of the current favourites is High Stakes Poker. Basically a high stakes cash game with a minimum sit-down $100k.
Even the pros get the game wrong though, sometimes impressively to the tune of many hundreds of thousands of dollars...
I've got to say Negreanu takes it on the chin, but he gets several bad beats over a session and goes down about 400k. I mean really bad beats - guys all-in for 100k chasing flushes and hitting rivers. I feel sorry for him, but then again I'm not sure I would have called an all-in raise in this hand. Maybe that's why he's a pro dealing in hundreds of thousand and i'm just dealing in just the thousands.
It all made me want to play a bit, so I logged onto my pacificpoker account and had a tinkle last night and did pretty well - won a $20 buy-in tournament. But it got me thinking - if you had £400k and someone said they'd double it by correctly guessing the outcome of a coin flip. Would you take it? Possibly not - I mean £400 is a lot and would make a big difference. But what if it was £4000? Not sure about you guys but well I'd probably say yes. 4k isn't going to make much difference, 8k will enable me to live it up for a ski season. So the happy medium is somewhere between 4k and 400k.
The trouble is that every poker player will tell you, that gamble's not bad odds. You get a 50% chance at a 100% profit. Basically the maths is relatively happy. But as any poker pro will tell you, they'll bet a 51% chance every time because if they do that every time it comes up over the course of their betting lives, they will always end up that 1% up. I always think that this attitude exemplifies betting all over the world (including bookmakers/financial markets/hedge funds/etc) where the amount of money that is willing to be gambled grows exponentially as to push up the monetary value of the 1%. Every now and again obviously, this goes seriously tits up when a stock market crashes and the vast majority of investors lose a ton. But then they all seem to go back for more. Maybe in the same way Negreanu doesn't walk away from the table after such a big hit to his money in order to clear his head - I feel if it was me losing that much, I'd be crying on the floor, sucking my thumb, waiting for the woman in my life to beat the crap out of me when I got home.
How much money would you gamble on the coin flip?
Found some amusing famous bets as well today whilst researching this post.