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Daily Speculations The Web Site of Victor Niederhoffer & Laurel Kenner Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter; a forum for us to use our meager abilities to make the world of specinvestments a better place. |
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A True Story About Hubris: A Gambler's Tale
(Author's identity withheld)
As a college student with too much time on my hands, resulting
largely from Niederhoffering my senior year political science
classes, I naturally gravitated toward poker as a way to
strengthen myself mentally through the strategy and tactics of
this worthy pursuit.
Very recently I won my first poker tournament (having been
only the second I had ever entered) and consequently achieved
a 4,328% return on investment while increasing my bankroll by
a factor of 3.38. It then took me approximately 35 seconds to
relate the good news to everyone in my rolodex via a
combination of telephone, email and instant messaging. Most of
those whom I contacted at least feigned interest and so my
insatiable desire for accolades and recognition was quenched.
With newfound riches in hand, I declared myself the second
coming of Doyle Brunson, and set out to blaze the path to
poker success. Eight hours later I was broke, having burnt
completely through my temporarily fattened bankroll and
dipping generously into the rest of my available funds which
were to be used for other purposes.
As I struggle to find some good in
my circumstance, I can only say that this was simply a very,
very expensive lesson on the dangers of hubris and arrogance.
If I am so fortunate as to have poker success in the future, I
surely won't even acknowledge it, for as soon as I do, the
gods of irony will undoubtedly smash my ego back into the
proper proportion. If I had only listened to my grandfather
(Pop Pop Chick) when he used to tell me that God gave me two
ears and only one mouth for a reason, this whole episode could
have been avoided.
A Big Hedge Fund Trader's Comment:
The
first loss is the best loss...make it quick and take it quick.
What happened to you was that you didn't have enough capital
to make it through the game.
In a game of random outcomes, where people don't cheat (and
one key element is that, before you play with someone, you
must identify those whose past character allows them to
rationalize cheating and unethical conduct) you must determine
if you are playing with equally funded players.
In the markets as in cards, I WILL DESTROY you by betting
constant money bets, until you are out of capital...
Let this be a lesson that YOUTH cant play this game against
the big hedge funds...there is a size mismatch.