Party Poker Blog

"I'm a nougat farmer."
GRob telling his poker tablemates what he does for a living.

Otis related the above Grob story to me and I'm now considering using the line myself in the future. I'm all about explaining how the "nougat bean" is actually a legume, and although a temperamental crop, tis easy to grow in the right climate. Great stuff.

This Guinness-fueled, tangential uber-post brought to you by Bonus Code IGGY on Party Poker. For the love of God, quit playing on tightass tables with tightass players. Come play in the Land of Fish. Biggest aquarium - online poker site on the web for a reason: Party Poker

Of course, I must mention the hilarity of watching GRob sit down this past weekend at a $400.$800 table of Mimi Tran, John D'Agostino, Chad Brown, and Tuan Le with $60. Please go read Up for Poker for this tale and more.

There's a bunch I could write about this past weekend in Tunica but who the hell wants to read my drivel? I owe Otis & CJ a shout-out for their tourney tips/advice, because frankly, I have very little experience here. And hell, when the LuckBox talks about tournament poker, you shut up and listen. And plus, I was/am very down on my tournament skills in relation to cash games. I'm conceptually lost. Otis thankfully stressed to me right before we sat down to play that because of the hour-long blind structure, relative to our starting chips, that I could play uber-tight and not take unnecessary chances early. Peddle if you can. Blinds are nothing for several hours. With only 2k in chips, don't cripple yourself in one silly pot. I credit this advice with my making it as far as I did.



We started with 2k in chips. 415 players, I think. Blinds at 25.25. I felt good, doubled my stack after two hours by just playing solid ABC poker at a very tight, passive table. I ate a hotdog for sustenance.

Bizarre fact: We lost NO ONE at my original table until three hours and ten minutes into the tourney. Is that crazy or what? I lost count at 10 in a row of all the allins that were won by the short stack. One of the guys at our table called over TD Johnny Groom and asked if this wasn't some kind of poker record. Johnny pondered for a second and replied, "Close, but no cigar."

In that third hour, I cracked our table's big stack and doubled thru after I hit my set and laid his pocket aces to waste. I'll admit to a surge of adrenaline after this hand, something I've never really had to deal with before at the poker table. But hell, that's why I was playing this damn tourney - to get some freaking experience. So, I slowly got up, took a walk and had a smoke to calm down and get focused again. Most poker players take a walk after a bad beat. Not me, I walk after winning.

Ended up with a tough table as smaller stacks started moving in and busting. Only one WSOP bracelet wearer but there was another guy I recognized from TV but I still don't know who the hell he was. Very tricky, aggressive player. In fact, he was the only player I remember ever showing a pure bluff all day.

I picked up a nice windfall when I woke up with KK in late position. Two short stacks move allin in front of me and I do so, too, in order to keep anyone else out of the hand. After I move all my chips in and the other two players flip over their JJ and 99, respectively, the big blind shakes his head and says, "Good play, I folded AK there."

Of course, an ace flops and I get lucky to bust two players and climb up to around 14k in chips.

Tables break and break. I fold and fold. Steal and steal.

Some seven+ hours into this mindfuck and I'm still treading water around 15k. Average stack is reportedly around 6k. We're down to about 70 players, methinks?

And then it happens. From blissful joy to stunned shock in the blink of an eye.

Blinds at 150.300 with 50 ante.

All folded to me in mid-position. Yes, I have the dreaded JK of hearts. Of course, I realize the problem was playing this hand from the get-go. Of course, I raise it up to 1k.

The button, who has around 12-13k calls. The big blind comes along, as well, he with an average stack.

Flop: A Q T

Yikes, flopped the nut straight.

Check to me. I bet 2k. Button smooth calls quickly (ding ding ding) and the big blind folds. I'm now convinced he's on the flush draw, possible two pair or maybe even a set. Duh.

Turn is the 5

I think for a few seconds and check. In retrospect, this was an awful play on my part, giving him a potential free draw to the flush. But honestly, at this table for the past hour, showing any type of post-flop weakness was usually pounced upon and shredded to bits. And that's exactly what happened.

He leads out for 2k. I raised to 5. He moved in. I insta call.

Even though I'm considering he may be freerolling on me with a suited KJ of diamonds I'm still not overly worried. In fact, I'm on cloud fucking nine, envisioning my huge stack coasting to the final table.

I'm a bit stunned, however, to see him table the J 8

And the river: 9

Lord have mercy, a straight flush.

Even though I had him covered by a few grand that was it. My desperation allin later nets me nadda.

And so I did what I set out to do. Gain some live poker tournament experience. And hell, I did way better than I had expected. I was able to get my money in with the best hand every time and got lucky to not get outdrawn on for over seven hours. I can't complain at all. If anything, I think I didn't need to play such a big pot out of position with a damn KJ. But hell, he was willing to stick all his chips in on a flush draw with one card to go and he hit it. I say good for him.

Would you beleive he hit a royal flush five minutes later? Sick but it's 100% true.

And they all say that only online poker is rigged. Heh.

So anyway, I decompressed for a bit with CJ & Otis in the back corner of the room, pondering what might have been. It was great to be able to pick their brains a bit and get some perspective on this whole tourney thing. They decided to head over to the Gold Strike where Grob and BadBlood and Jason were hanging so I tagged along. The rest of the evening is very, very hazy due to nonstop double greyhounds.

And so there it is. A feeble writeup but a writeup nonetheless.

Let's get to what I do best.
Destroying Some Workplace Productivity.
So let's uber it the fuck up, shall we?

I love this commentary from AdRants about ads and blogs. Well said.

------

It sure would be nice to live is a world without advertising but until aliens land and introduce an entirely new economic system, advertising will continue to make the world go 'round. We appreciate that there should always be a wall between advertising and editorial but we don't subscribe to the notion that advertising devalues content as do the folks over at Ad-Free Blog. The group places blogs on a pedestal and claims that advertising on blogs devalues the medium. Again, we could go into our tirade about how blogging is just a really easy way to publish a website and not this new uber-religion it's made out to be but will spare you that tired rant.

Contrary to the groups mantra, all blogs should not be ad-free. If all blogs should be ad-free, why not all websites? Why not all media? Why should blogs be held to this artificially higher standard? If the group is so adamant about advertising devaluing blogs, shouldn't they be out trying to stop advertising from devaluing all media?

Climb out of the clouds and smell the real world.

------

Exactly.
I write this shit up for free. Monster posts.

Now sign up on Party Poker with Bonus Code IGGY damnit.

Fast Eddie update. Here's his picture again, for my new readers.



He's a local online pro. He's gonna have a kid. God have mercy on us all. Anyway, I'll be helping him set up his new computer network. He just ordered ten freaking monitors. That's not a typo - Ten new monitors just for poker. He's mostly ten tabling $215's right now on Party Poker. He's clearly insane but he's promised to allow me to take a picture of his new rig when it's set up. Stay tuned.

Here's a little non-poker anecdote that you may enjoy:

Subject: Re: The Homeless Lady & Hollywood Casino

Years ago, I was talking to a guy who was an old time lawyer from some major city in the US, I forget which one. I was in my late teens, and the guy was in his late 70's at the youngest. I forget why I asked, but I remember asking him for something in his life that really surprised him or something along those lines.

So he told me a story. He told me that years ago he represented a 'rag man' I didn't know what a rag man was and he looked at me incredulously, but apparently in the past before there were aluminum cans, the homeless used to go around pull rags from rubbish bins in the US and there were companies that would recycle them by washing them and selling them as rags. So they were called 'rag men.' (I guess textiles were in much shorter supply in the past). Also I guess this was the age before the paper towels...anyway so we are talking about the same type of people we might call today homeless/vagrants/bums.

The lawyer represented this guy from time to time during his life. He would always pay in cash and with big rolls of it pulled from various smelly places "on a body already awash in years of filth" (I still remember his exact words). At some point this guy dies and the lawyer handles his estate. It turns out this guy was a millionaire. He had bank accounts at 4-5 of the local banks in which he always made
deposits and never withdrawn. Remember its easy to become a millionaire these days, but at the time when a can of corn was 5c and coffee 10c it was a significant challenge back then. There wasn't much room for margin.

Now I'm not saying that every vagrant is awash in cash to go along with their years of filth, but the 'pack rat' characteristic of mental illness is certainly present in many who you see. Pack ratting away their cash would be a natural symptom of the same mental illness that puts them on the street in the first place.

And ever since hearing that story, I have looked at these people from a different aspect. maybe some have actually made it big but don't have the capacity to accept it. But I still don't mind handing out some change when I have it, and I think it would mean a lot.

I've always admitted that I'm not great at multi-tabling. Not above three tables, anyway. And I fully recognize that it's a weakness of mine. Hell, Fast Eddie kicks ass on ten tables. I'm jealous. And after reading all the whizkid multi-tablers on 2+2 and RGP, I discovered this post and decided to share it:

Subject: multi-tables = multi-disadvantage

This topic has been touched upon recently, but I wanted to get into it a bit further...

I don't understand how playing multi-tables can make you a better poker player. Whether you're playing 2 tables or 16 tables, you're full attention isn't on one game.

Having said that, I can see why players multi-table. More action/less boredom, more money to be made (if done right). Even so, I think such players are at a large disadvantage.

If I know a player is playing multi-tables, I'll make a note of it. A BIG note. Right off, this tells me he's hardly paying attention to what *I* am doing. It also tells me that he won't be pulling any fast ones and is only going to be playing his best pre-flop cards. Knowing this, I'll only do battle with him when I'm pretty sure I've got him beat. He's not on to me, but I'm definitely on to him.

Getting even a bit more opinionated here, doesn't playing multiple tables carry an air of arrogance with it? "All online players are the same. I can beat these fish blindfolded!" or "It's my turn at Table # 5? Screw them. They can wait. I've got pocket rockets at Table # 2!" Makes it that much sweeter when you trounce them later on, causing them to wonder what the hell hit them and cry "Bad beat - wahhhhhhhh!!!" Oh well. Maybe if you were PAYING ATTENTION to "all of us frickin' FISH"!!

So, next time you see a player who's clock is frequently running down - he's probably a multi-tabler, and for me, it's like "Bring it on!", because I know right off I've got the advantage. Playing my one. Single. Table.

What does everyone think?

I was sad to see folks teach him about PokerTracker and third party add-ons.

Someone asked a pretty good question about Game Theory in RGP and it turned into a pretty good thread. But everyone seemed to love Wampler's post so I'm including it here:

Author: wamplerr

Game theory is basically a branch of math dedicated to optimal decision making. When academics talk about it, the 'games' they speak of usually don't usually seem like games you and I are familiar with. They usually speak of some hypothetical situation where two (or more) players can make certain moves which tend to be simple, like you can move left, or you can move right. Certain combinations of moves lead to certain outcomes, such as winning 5 or losing 3, and it is your job to find the optimal moves to maximize your winnings, or minimize your opponents winnings.

The optimal strategy to these games is usually a mixed strategy, in which you do move A with probability a, move B with probability b, and so on, so to solve the game, you have to find the probabilities for a, b, c... and you would randomly decide what course of action to take based on those probabilities.

It is generally not easy to apply to poker. You couldn't just find the World's top game theoriest, and say "Solve No-Limit Hold'em". There are too many variables to take into account, and it is too hard to classify your opponents. However, you can take some parts of poker and use game theory to analyze them.

For example, let's say you have Aces under the gun in a side game. You shouldn't always come in for a raise, because when you limp, people will know that you don't have Aces. You shouldn't always limp with them for obvious reasons. So it seems that you should limp sometimes and raise sometimes. The exact frequencies depend on how aggressive your opponents are, how deep your stacks are, etc, but you might make
some assumptions and estimate that you should limp 1/6th of the time, and raise 5/6ths of the time.

Further, you should use some kind of random instrument to dictate your actions. So you look at your watch, and if the second hand is in the first 10 seconds, you limp, and if not, you raise. Or, given that you have Aces, your aces will be red one time in six, so you could limp with red aces and raise otherwise.

One reason game theory isn't that useful for poker is that it tends to assume your opponents are also using game theory. If the big blind is a horrible player who defends his blinds with any two cards, and you are under the gun with Aces, you should probably raise 100% of the time. There is no need to mix it up with him since he isn't paying attention anyway.

In college, I had a friend who was pretty good at dealing 3 card monte. I have no idea how he did it, but you would follow him in dealing the cards, you would be 100% sure you followed the key red Ace the whole way, you would pick that card at the end, and somehow that card you picked was a black ace. I guess at some point in the shuffling, there is one switch that your eyes just miss. But that was his flaw...he
isn't randomizing the cards, he is just letting you follow the right card until he makes some move that switches them, so that you are wrong 100% of the time. So how did I beat his game using game theory?

He was offering 2:1 if you could pick the right card, so first of all, we know an easy way to break even in the game,..don't watch him shuffle the cards. Just turn your head, look back when he is done, and pick a random card out of the three. In the long run, you'll be right 1/3rd of the time, and you'll break even on the game. You are now using game theory to break even with an opponent who is probably "better" at the game than you are.

How can you do better than breaking even? Keep your eye on the card that he wants you to pick, and then you know not to pick that card. Now you are getting 2:1 on an even money shot.

Now at some point, game theory starts to kick in for him. So he notices that you never pick the 'decoy' card that the hustle is designed to make you pick. So he stops pulling the switch and he starts putting the Red Ace where you thought it would be. Now he is beating you again.

Now you take into account that he sometimes doesn't use the decoy, so you start mixing that card back in too, and you're pretty much back to where you were before, just turning your head and picking a random card. So both parties are using game theory, and both are breaking even. That's often what happens in a lot of games. You both find this equilibrium point, where niether player benefits from deviated from that strategy. So if your strategy is to randomize, then he could change his strategy to always put the red ace on the left...but he wouldn't gain anything from it, since you would still tend to pick that card one time in three.

You could come up with many similar examples for Roshambo. Annie Duke was using game theory in the world series of roshambo, by using the serial numbers of dollar bills to dictate her moves. 1, 2, or 3 was Rock, 4, 5, or 6 is paper, etc. A Roshampro like one of the tiltboys would probably have the best of it against Annie in a match to 7 if both parties were just trying to outsmart each other, but it is impossible to have an edge against a random number generator, so Annie used game theory to turn it into a 50-50 game.

The beauty of it is, everyone knew Annie's strategy, and she still made it to the semi-finals. You can know exactly what a player is doing, but if they are using a mixed strategy in game theory, you can't do much to stop it. (Note, you could probably exploit her strategy if you knew a lot about the number frequencies on dollar bills).

You can probably find some good stuff in the archives about Game Theory, and after this rambling I'm thinking it would have been optimal if I just said that at the start and went to bed.

There were some really good links in that thread but I'm going to assume my readers know how to use Google.

It's been said before and far better, but i'm still gonna blog it:

Subject: The number of jealous bitches on this NG is amazing

I love reading all your posts about watching the WSOP or WPT tourneys, and about how this player made a horrible call, or how so-and-so made a terrible laydown, blah blah blah. You are all so fucking jealous that they have the stones to play poker at that high of a level, that they make decisions made that could cost them thousands of dollars, and that 99% of you, if faced with those same decisions, would shit your pants and have to call for an "Oops I Crapped My Pants" to be delivered to your table.

So keep writing them, cause I laugh my ass off everytime you say that Moneymaker, Raymer, Negraneu, Williamson, etc. are terrible poker players, and how you are better than 80% of the poker players in the world. High comedy like that should cost money, but it's free, right here on RGP!

This train wreck of a poker blog, the red pill, is still going strong. Now he got banned from the forums at ITH. High comedy. I'm really lowering myself by even linking to this FuckTard, but hey, how many poker blog posts have you ever read entitled, Fuck you Matt Hilger?

I really like trip reports after my trip to Europe. In fact, the travelogue and foreign podcasts are some of my favorites. Here's a concise post and a followup.

Subject: Japan Trip Report

The wife and I got away for a week and went to Tokyo. Flying first class in a 747 heavy is the way to go. You get these pod-like seats that fold out with on-demand video, free drinks and decent food. The upstairs even has some privacy for the mile high clubbers. So 4 movies, 2 meals and 1 blow job later we landed at Narita.

I have been playing cards quite a bit lately so she bet me I could not go without for a week, no watching, reading or even talking poker. The bet was sexual so it was serious. Well I lost the first freaking day.

In the hotel lobby there he was, the big fat obnoxious pro from down under Tony G. There was some kind of poker charity tournament going on which was bizarre as gambling is not legal other than race tracks and Pachinko machines. As I’m told, online poker is running rampant in Japan so the commercial poker whores are lining up to get a piece of sushi.

Bad things about Japan: Smoking and cell phones, it’s chronic

Good things about Japan: Polite people, great food, and historical sites

Best thing about Japan: The toilets. Not only do they have butt washers, they have heated seats. Now that’s living!

The funniest moment was when we were searching for an after dinner sweet. People normally stand outside Japanese restaurants, hand out menus, and hawk the specials. These guys were in Tuxedos so my wife grabbed a menu to see if dessert was on it. It had pictures of girls that you could talk to for 10k Yen ($85) an hour. My wife turned red and started in on the guy who spoke no English whatsoever. I still think that a threesome with a hot Asian chic should be considered dessert.


---

Subject: Re: Japan Trip Report

> Yes, true they do not like Americans in general. They have a word for us which
> is pronounced "Guy-Gee" which means less than a dog. So if you are American
> you are Guy-Gee.


It's "gaijin." It means "foreigner," but the kanji characters that make up the word actually mean "outside person," or "outsider." You will mostly hear it said with the honorific "-san" or "-sama" suffix if no insult is intended. But, in certain contexts, it can be construed as an insult.

If certain ethnic groups in the United States want to complain about racism, they should try Japan for awhile to find out what real racism is.

I've eavesdropped on countless conversations between Japanese people who assumed I didn't understand what they were saying. It is inevitable that wherever you go in the country, wherever you eat, drink, sleep or even ride in an elevator, you will be the main topic of conversation (at least for a while). Most of the time, its as
innocuous as recalling a previous encounter with a foreigner, or sometimes they'll spin off a bunch of stereotypes about the odd behavior of foreigners. Young girls and women are usually admiring, young boys and men are derisive, though the men will be less obvious about it.

There are a lot of night spots in Tokyo, Roppongi in particular, that won't allow foreigners in at all. I've encountered a few of these, and when I would ask them why, they'd usually tell me that it's a language thing. Sometimes, when they heard me speak Japanese, they'd let me in, sometimes they wouldn't. I could get into a lot of places with a Japanese escort where I wouldn't have been able to on my own. I really don't buy into language being the problem.

Nothing to be overly paranoid about, but it's out there. I understand that because so many foreigners now speak Japanese (as opposed to 15 or 20 years ago), they're a little more careful these days. But there've been huge jumps in crime in the city in the last ten years, and they blame almost all of it, exclusively, on the flood of foreigners coming to live in Japan.

So, there...
---Roy

I never put much credence into stop/loss limits. Until I started playing poker for a living, that is. Here's a post asking for help, which Gary Carson gives, in his own indomitable style.

Subject: Stop/Loss Limits in Limit Hold'em (Lee Jones please chime in with your thoughts)

http://www.pokermagazine.com/Poker-Strategy/bankroll_management_lou_krieger.html

Carson says this stuff is "over my head," but I think the problem is that we continue to talk about two somewhat different things. I've read about this extensively in the past few days, and the wisest of poker players including Sklansky, Jones, Malmuth, Carson, Krieger, et al, disagree with each other to varying extents.

The Krieger citation above is nearly identical to Joneses feelings on the subject, both of which are based on Sklansky's writings to some extent.

I will grant that Carson is correct when he says, in effect, that we are not robots and emotion has to be figured into statistical models. I'm not a statistician, but in earning my MBA I took four stats classes and I cannot remember any specific case study dealing with emotion as a factor. This is probably because the closest we ever came to studying poker was in analyzing the probabilities involved with rolling fair dies and unfair dies and lottery numbers. We dealt mainly with business models.

So the question becomes this: If a robot or an individual whose play does not vary according to mood swings and fatigue hits a bad streak or a hot streak at a table, does leaving and later coming back change the trend?

Loss limits make sense to me for players who tend to go on tilt. It is just obvious. People like that need to get up and walk away, and they no doubt will benefit from having done so. But to me that is a different thing. What I found ridiculous in the limit thread was the notion that you should "quit while you're ahead." Krieger and others dismiss this by saying, yeah, that will work but only if you never play poker again. To be fair, not everyone in that thread advocated you should quit while you're ahead. But a couple of people did and while Carson was congratulating them for buying into his theories on the subject he did not emphasize the idiocy of this
particular notion.

I am sticking by my guns that for people who are grown up and can control their emotions and know when they are not in the right frame of mind to play that the stop/loss limit theory is a fallacious one.

Almost all serious poker players play better when well ahead. Add that to the fact that if you are winning you are more likely to be playing bad players, and "quitting while you are ahead" doesn't make much sense. Some of my biggest poker wins have been 24-48 hour sessions, and once I do get almost all the chips getting them back from me is usually like trying to break into a vault. I've doubled big wins far more often than I've given it all back.

What intrigues me is that everyone on the internet claims they aren't subject to mistakes/frustration/emotion when losing heavily. These special players must spend all their time posting because in 35 years of poker I've never actually observed one in real life. And don't forget the possibly that if you are getting creamed you could be up against cheaters or (God forbid) better players.

And here is the Carson response. Prior comments are marked with the >:

> Loss limits make sense to me for players who tend to go on tilt.


Whatever you call it, some players will sometimes deviate from their A game. If you never do, then youre special.

Nobody plays a perfectly stationary game. They might get distracted by a bird flying around the room, causing them to miss a tell. It has nothing to do with going on tilt or having an emotional reaction to a loss. It simply has to do with sometimes playing less than your normal perfect game.

If you ever play less than perfectly, even as often as 1/100th percent of the time, then you would do better with a stop loss. The less often you deviate from perfect play, the bigger the stop loss should be.

It has nothing to do with tilt, nothing to do with changing the cards.
It has nothing to do with the cards at all.

What it has to do with is using all information at your disposal. If at any given time the probabilty of you not playing perfectly is X > 0, and you're an overall winning player, and if you are currently losing this session, then the probability that you aren't playing perfectly is Y > X.

That's it in a nutshell. And, that's statistical. The idea that your results is a stationary process with a never changing process with fixed mean and variance is not statistical, but it's a simple but robust model which in this case simply ignore the actual statistical evidence.

If you are a superman who never gets distracted by a bird flying into a fan, then none of thi applys to you. But, it does apply to everybody else.

btw, Kreiger is very misinformed about probability and things like convergenge and the long run, anything he's written on this subject is just a rewrite of something David said, and Kreiger has written some huge bloopers on probability subjects. I'm not sure Jones has any original thought on the subject. When David wrote about this he was trying to make a point about silly money management schemes in vogue at the time that mostly came from craps shooter, He wasn't arguing against stop loss so much as he was arguing against what the common usage and beleif about stop loss was at the time.

What David actually said was that if you know the game to be a good game, you should stay even if you're losing.

What he left unsaid is that if you're losing you need very strong counter evidence that the game is good in order to rationally conclude that the game is good enough to stay.


>It is just
> obvious. People like that need to get up and walk away, and they no doubt
> will benefit from having done so. But to me that is a different thing.
> What I found ridiculous in the limit thread was the notion that you should
> "quit while you're ahead."


Protecting your win is something that people do to satisfy a deviant emotional need. It has nothing to do with a stop loss.

Setting a stop loss in relation to win though is a way to use a change in result to detect in game conditions and it makes rational sense. That's not the same thing as setting a stop loss in order to protect a win, which is an irrational goal.


>To be fair, not
> everyone in that thread advocated you should quit while you're ahead. But a
> couple of people did and while Carson was congratulating them for buying
> into his theories on the subject he did not emphasize the idiocy of this
> particular notion.


I might have agreed with some of what some people said. I didn't congratulate anyone.

Irrational is not stupid. It's actually normal human behavior. Don't they teach you anything in that business school?


> I am sticking by my guns that for people who are grown up and can control
> their emotions and know when they are not in the right frame of mind to play
> that the stop/loss limit theory is a fallacious one.


People who are grown up realize that sometimes they aren't doing things perfectly and sometimes they aren't doing things perfectly and they don't have perfect judgement about that.

Only children harbor the illusion that they are indestructable.

People who are grown up will actually look at the data and interpret it rationally.

My suggestion is to stay in school, because you don't know what you're talking about. People who are perfect in every way tend to do much better in school than in life.

Gary Carson

Weeee. I just found the Whiplash the Monkey video in my old notes.

Geepers, I can't even tell you how long it takes to pull all this stuff into blogger and then format it. I am deeply deranged. And getting very drunk.

Want some more poker theory? Wrap your noodle around this question then:

Subject: Poker theory question

Is it correct to deliberately make an incorrect play if it results in your
opponent making an incorrect play?

And again it's Gary Carson writing the responses to this. Here's a compilation nicely edited for your reading pleasure. Gary sure enjoys taking shots at David.

-------------

> Is it correct to deliberately make an incorrect play if it results in your
> opponent making an incorrect play?


It's not an incorrect play if it's the right thing to do.

Gary Carson


> Sklansky's Theorem says you want to take advantage of your opponents'
> mistakes. A corollary is that want to induce your opponents to make
> mistakes. If you deliberately make a mistake to induce one from your
> opponent, then yours isn't a mistake.


It's certainly a mistake if the mistake you make is bigger than the mistake you're trying to induce. All mistakes aren't created equal.

And, the Fundamental Theorem of Poker isn't fundemental, isn't a theorem, and often isn't correct. But, it's a catchy little name.


> It's deception. And it is
> absolutely correct to deceive your opponent in order to get him to make
> mistakes.


FPS.

Gary Carson




> well define fundamental.
> but for the rest, it's like 'everytime an opponent plays a hand
> differently from the way he would have played if he could see your cards
> you make money'
> i think it comes pretty close to the truth.


It's an approximation to the truth. It's not even strictly accurate heads up, and multiway it's not even a good approximation.

It's not fundemental in the sense that it implies that you don't have to do anything to profit from opponent mistakes. That's, of course, not true in general, and even in cases when it is true the profit is often small if you don't take action to exploit the mistake.

Gary

Good God, I think I'm done here. And I haven't even gotten to the good stuff yet.

A few final random links.

My good friend, Mr Fabulous, live blogged the Golden Globes awards in his excellent movie review blog. I know many of you enjoy pop culture and snark and this is just for you:
Live blogging the Golden Globes

Watch the world's best card thrower, Rick Smith Jr., throw playing cards through carrots and watermelons.

Did anyone besides me read the book Freakanomics? Anyway, this is now a tad old, but they had this to say about the NFL and cheating in their fine blog:

Cheating in the N.F.L.?

It’s something that a lot of people think about, but rarely does anyone come right out and accuse the National Football League of rigging its games. For a conspiracy theorist, or even just a guy holding a losing betting slip that was a winner right up ‘til that bogus call with 30 seconds left that allowed the underdog to close the spread, there are all sorts of reasons that referees might slant their calls: protecting big-name players; punishing bad-boy players; helping out big-market teams; calling back a touchdown that would have easily put the score over the over/under line.

I’ve never given much credence to such thinking. I’ve had occasion over the years to deal with the N.F.L. on a number of levels, and I think it’s a pretty remarkable industry (well, okay, a pretty remarkable cartel). But yesterday’s Steelers-Colts game contained three mind-boggling calls (or non-calls) that went against the Steelers, and made me wonder what was happening.

The first was the non-call of pass interference against Antwaan Randle-El on a play in which Randle-El was practically tackled as the ball came toward him.

The second was another non-call: as the Steelers were about to run a play, the Colts’ defensive line jumped the snap and crossed the line of scrimmage; instead of calling illegal procedure against the Steelers (which, replays showed, may have happened) or off-sides against the Colts (which, replays showed, definitely happened), the officials did nothing, and basically called a do-over. As a kid, I loved do-overs; they often prevented fistfights; but I’ve never seen one in the N.F.L.

The third was the one that, had the Steelers managed to lose the game (which they nearly did when Jerome Bettis fumbled, and the Colts’ Nick Harper recovered and raced toward a score, and the Steelers’ Ben Roethlisberger made a remarkable tackle that prevented another Joe Pisarcik/Herman Edwards miracle play), every Steelers fan in the world would have recalled as the N.F.L.’s cruelest hoax of a call ever. Here’s what happened: the Colts’ Peyton Manning threw a pass that was intercepted by Steelers safety Troy Polamalu, who tumbled to the ground, got up to run, knocked the ball out of his own hands with his knee, and then fell on the ball. Somehow, however, the officials reviewed the tape and called the play an incomplete pass. I’m sure that even Peyton Manning’s own dad, Archie, realized it was a horrible call.

And now Joey Porter, the Steelers’ most voluble (if no longer most valuable) linebacker, has this to say of the officials: “I know they wanted Indy to win the game. The whole world loves Peyton Manning, but come on man, don’t take the game away from us. I felt they were cheating us. When the interception happened, everybody in
the world knew that was an interception. Don’t cheat us that bad. When they did that, they really want Peyton Manning and these guys to win the Super Bowl. They are just going to straight take it for them. I felt that they were like, ‘We don’t even care if you know we’re cheating. We’re cheating for them.’”

I don’t think the N.F.L. will be as amused by Porter’s remarks as I am. As a Steelers fan, I’m hoping he’s not suspended for next week’s A.F.C. Championship game against the Denver Broncos. As it turns out, Porter has a rough Denver history. Three summers ago, while leaving a nightclub there, he was shot in the thigh and wound up missing the Steelers’ first few games. This time around, he may have some more people gunning for him.

Thanks to anyone who read this far. I swear the next uber will have far better content. I fully intended to get it up in this post but I've lost the sobriety ability to continue writing this.



Allow me to leave you with this massive RGP post concerning poker and stock trading.

-------------------------------



Subject: Stock Market Lessons from the Poker Table

I spent this past week playing two No-Limit Hold'em poker tournaments
in Atlantic City at the Trump Taj Mahal Casino. The first one was the
Trump Classic $300 buy-in and the second one was a regular $100
tournament at the same casino. There were about 140-150 players at
each event.

I enjoy playing poker and play in a regular game once a week at home.
Poker and the stock market are similar games. They are about
understanding psychology, controlling your emotions, and managing risk.
Of course, the risk to reward ratio in the stock market gives you a
much greater pay off than a poker tables does, but understanding how to
play one game can help you succeed at the other one.

No-Limit Hold'em is, in my opinion, the best poker game to play. If
you've seen poker on TV it's likely that you were watching No-Limit
Hold'em. It's a great teacher of decision making because of its fast
pace and the many different situations in which you find yourself. If
you're unfamiliar with the rules of Texas Hold'em and want to know more
about it click here. http://www.pokersiterank.com/rules.htm

Trump Classic - $300/buy in 1st place $16,000

I got action in the first tournament almost immediately. On the second
hand I got a pair of queens. It's a good hand and right after I saw
it I raised before the flop in order to flush some players out. When I
am in a pot with a hand like that, I want fewer callers on the flop to
cut down the odds of someone hitting some lucky combination of cards.
One person called my bet and the flop came with a king. I bet and got
raised by the other player. I folded the hand. I respected their bet,
assuming they had a king. It's a disappointing hand to have to fold.


But I had no reason to suspect that he was bluffing. Poker is a game
of people as much as it is cards and you have to watch the action
carefully to get an idea of what kind of player you are up against.
You have to watch their betting patterns and try to match that with
their demeanor. Are they playing lots of cards or are they playing few
hands, which means they are usually playing strong ones. Do they bluff
a lot? Or do they fold all of the time when they have nothing? Or do
they call no matter what?

I tend to play more conservative than most players and am very
selective with my starting hands, entering pots 10-20% of the time
during a tournament. But I got cards over the next ten hands and
entered the pot about 4 times. Each time I didn't get anything that
helped me on the flop and tried to bet to make people fold only to find
myself reraised. I folded each time.

I felt frustrated. I had lost five straight hands in a row and a
quarter of my chips. Although I am a winning player at home and when I
play online occasionally, I began to wonder if I was just outclassed
here. I worried there might be something in my demeanor that let them
know I didn't have anything on those hands. I doubted that though.
Maybe they just had good cards.

A lot of times when someone plays a poker tournament they reach a point
where they get frustrated and give up. They start to play junk cards
or make stupid calls. In poker this is called going on tilt. In the
stock market people do the same thing. If someone makes a bunch of
losing trades they'll often quickly jump into other stocks with
marginal risk/reward ratios in the hopes of making their money back.
Or else they'll refuse to sell losers and ride them down. Or, if
they sell and the stock goes up they'll get annoyed and buy it back
at the top. In the stock market, the way to counter this tendency is
to take a break from trading.

I was starting to feel ready to give up. I thought to myself, maybe
these people are better, but I'm not going to give up. I came a long
way to play in this game and I'm not going to go home thinking I lost
because I did something I know I shouldn't have done. I'm going to
play the best I can and, if I lose, so be it. I'll just sit back and
wait for good cards.

Evaluating the Situation

In order to play well at a poker table you need to figure out what your
opponents are doing and play in a way that works best against their
style of play. It usually takes a good twenty hands or so to get a
feel for the players at the table. With only a few hands into the game
I really had no proper evaluation of my opponents. However, they just
saw me fold after betting on five hands. I've been the most active
player at the table. I know they think that I'm going to be a big
bluffer. And that's good, because that's not my playing style. I
figure that from now on when I get something and bet I'm going to get
paid off.

And that's exactly what happens. Over the next hour, I hit some
hands, get called, and build my chip stack back up. Four people bust
out. The tournament director splits our table up, moving me and a
woman sitting next to me to another table that has lost some players.

As I sit down, I look around at the other players. To my left are a
man and a woman in their thirties. They don't know each other but
over the next hour they talk with each other constantly. They are
friendly and I join in their conversations. I like a friendly game.

To their left, and right across from me is an older, overweight, white
haired big mean bear of a man. When I sit down he doesn't look at me
and, as the game goes on, he doesn't look at anyone else either. He
reads a newspaper, bets, and then goes back to his paper. The only
time he looks up, it seems, is when he collects chips from the pot.
And he's got a lot of them. He has the most chips at the table.
After him, I have the biggest stack or am tied with another person for
second. It's close. I have to watch this chip leader.

Right when I sat down I made some quick prejudgments about this white
haired man. Frankly, I thought he was probably a jerk and a probable
chip bully. He didn't look at me when I sat down and seemed to be
oblivious to everyone at the table. A lot of time when people are
jerks at a poker table they play extremely aggressively, bluffing with
big bets and stealing pots. They tend to accumulate lots of chips and
then lose them suddenly in a hand or two. Not all people who play
aggressively are jerks, but most jerks play aggressively. And this guy
is strange to avoid all contact with everyone else at the table. Maybe
he wasn't a jerk and just shy or quiet. I don't know him, but
poker forces you to make quick judgments of people. But, whatever the
case, he had 'chip-bully' written all over him.

I watch him closely over the course of the next forty-five minutes and
his play confirms my initial opinion of him being a chip bully. He
enters lots of pots and bets all of the time. There is no way he is
hitting his hands all of the time. Although I did that in the first
few hands of play, I don't always bet when I don't have anything.
In fact, most of the time I'll just fold or check to the other player
and let them bet. I think it's important to show some respect to the
other players so that they will respect your bets. Then a lot of them
will fold when you enter a pot or when there are close odds between the
both of you. They won't go over the top and try to bluff when you
make a bet.

Then an interesting hand comes. The white haired man enters a pot with
a young girl at the table who is already getting low on chips. The
dealer is sitting in between them. An Ace comes on the flop. He bets,
but this time he leans over and looks at the girl. This is the first
time he has looked at anyone at the table. She calls. He bets each
time another card is turned over and she calls. He turns over two
pair, a strong hand, and she busts out. This time it wasn't a bluff.
And this time he looked at his player. Most people don't show such
tells when they play, but this guy just did.

A couple of hands later I get two queens again. I bet big. Everyone
except for the white haired man folds. He calls me. The flop comes
and there are three low card hearts. I don't have a heart. A bad
flop for me, because five hearts would make a flush, which would
dominate my hand. But I do have two queens. It's a big pair. I
have about 12,000 chips and bet 1,000.

He goes all-in. This makes me nervous. But I realize what it means
too. Again he doesn't look at me when he bets. He wants me to fold.
He wouldn't bet so much if he already had two hearts and the flush
made. If he had the hand won he would bet like he did against the
girl, trying to get my chips on each card, instead of trying to scare
me with such a big bet. I figure he is holding an Ace, because he
called my first raise before the flop, and probably has another heart
in his hand. So if another heart comes on the next two cards he will
win the hand. But, if the hand ended now, I would win.

Odds are 56% to 43% that I will win the hand. Not bad, even though
they feel like a coin-flip to me. However, in a tournament you have to
double up two or three times to get to the end. That means you have to
take a few big chances. The trick is to make sure that, when you take
these big chances, the odds are in your favor and the payoff is going
to be worth it. I'm going to have to double up my chips at some
point to win this thing and I'm willing to take that chance now. If
I bust out, so be it. But if I double up, I can go all of the way to
the end. The odds are in my favor and this is about playing situations
like this when they are.

I look at the guy. He won't look at me. I tell him, "I know you
have an Ace and a heart. I've got two pair." He won't move and I
interpret that as him being nervous. I'm nervous too. Because I
know I'm risking everything on this hand.

"I call. Let's gamble." I tell him. I flip my cards over. He
shows an Ace and a queen of hearts. No hearts come on the next two
hands. He's busted.

When he leaves, someone at the table tells me they are glad I busted
him out because, before I was there, he was rude to them. This table
lasts for another hour. I play very few hands, only playing good
cards. But, on every hand I play, the other players fold.

A few people bust out at our table and I'm moved to another table.
About two-thirds of the starting players are gone. A young white kid
(probably a college student, I surmise) in his early twenties is seated
to my left. He's got a nice chip stack, about as big as mine. There
is an Asian fellow about the same age on the other side of the table
who has the biggest chip stack at the table. He looks like another
super-aggressive player. I decide to watch him carefully to see if
that first impression is correct.

Someone walks up to the table and talks with the kid. When he leaves
the guy across from me asks the kid how he knows that guy. There is a
professional World Series of Poker event with a $10,000 buy-in going on
being filmed for television and, it turns out, he is one of the
players. The kid explains that he is one of his friends. He plays
cards all of the time and travels with some of the pro's. He plays
in a lot of tournaments and has finished in the money in the World
Series of Poker.

"Geeze," I think to myself, "I'm screwed now." This is
probably the best poker player I've ever seen at a table. He's
probably a professional. The guy across from me gets knocked out and a
young black guy takes his place. He knows the kid and when he sits
down he says, "I hate being at a table with you. I'm going to lose
now." It seems that they know each other and have played on the same
cash tables before.

Having a Plan and Sticking To It

I stick with my tight-aggressive game - being selective about what
cards I play, but betting them for value and betting big on the flops
when the situation calls for it. Personally, I like for people to know
what I'm doing and I'll occasionally turn over a winning hand when
someone folds so they know that I'm not bluffing. That way they'll
fold more against me, and fold when I do make an occasional bluff.
When people fold, they just hand over their chips to you and your risk
goes down. I get a few opportunities to turn over winning hands. I
want to show the people respect. The people paying attention, and I
know the kid is. He knows I'm playing good cards. I'm trying to
send a message to him, not to bluff me or run over the top.

We've been playing for four hours now and the antes and blinds have
gone up. On each hand we all have to put in $25 and the small blind
has to put in $150 and big blind $300. I have about $20,000 chips.
But the antes and blinds mean there is money worth winning in each pot
before anyone even bets. This is always a key point in a tournament.

At this point I play even more selectively, but when I enter a pot I
bet $1,000 chips. This forces people to pay up if they want to play
against me, and they are already wary of doing so, because they've
seen me play good cards. Over the next half hour, I enter the pot
about half a dozen times. And, every time someone folds, I'm picking
up more chips.

Then I enter a hand in which I am the big blind. The small blind, who
is sitting to my right, was on an earlier table with me. When he
played he entered lots of pots, but then folded constantly when the
flop came. This means he was playing lots of marginal hands, and just
folding when he didn't hit anything. I don't think he bluffed
once, so when he calls or raises it means he has something. But it is
easy to make him fold.

Everyone folds their hands except him. He just calls. I call. I
don't have anything. The flop comes and there is an Ace and a Ten on
the flop. Normally I'd just check or fold in this situation, but
because of the way I've seen him play I bet $1,000. It puts the
pressure on him.

He pauses. He's nervous. But he's thinking. Makes me a little
nervous. He has something. But I'm calm. He can't tell that
I'm nervous. I look at him. He folds. If he had the Ace he would
have called. He must have had a pair of tens and sat there trying to
figure out if I was bluffing. I'm relieved and raise my eyebrows and
shake my head a little as I scoop up the chips. It is only the second
stone cold bluff I've made all day.

The kid notices my mannerisms and says, "I don't want to get in any
hands with you." He knows exactly what happened on that hand.
He's been watching me play carefully for the past forty-five minutes
and is scared of my play. He knows I play selective cards, good cards,
and am also capable of making big bluff. That means I'm not afraid
of putting my chips in the pot. Many selective players are afraid of
betting and are easy to chase out of a pot with a bet. However, I
don't think that he knew I was bluffing on the last hand until it was
over. That makes me a very tricky opponent.

Coming from this guy, this is the best compliment I've ever had when
it comes to poker. It pumps me up. Whatever happens, the trip was well
worth it. I wanted to play well and I've done it. I'm hanging in
there with the best poker player I've ever played with.

It's been five hours into this tournament and I've been playing
great. I look up and there are about 30 people left. I start
thinking about getting in the money - making it to the final 18. And
I think I've got a shot to do better than that. To make it to the end.
The top prize is $16,000. I start thinking if I get near the end
I'll try to split the price with the last couple of people. That's
how confident I'm feeling at this point. If I can double up one more
time I can do it.

After the next ten or fifteen minutes I find myself dealt a pair of
fours. It's not a great hand. But if I can get in and hit another
four on the flop I'll have a great hand. Three of a kind is tough to
beat. The odds of improving to three of a kind are only 11.7% when you
start with a pair and the odds of just starting with a pair are 5.88%.
So three of a kind is a rare hand. I've been playing for eight hours
since I've been in Atlantic City and haven't had it yet.

Three people limp in the pot in front of me, calling for three. I call
too. The kid and his friend (the young black guy) after him folds.
The super-aggressive Asian, who is still the chip leader, calls. And
he's been aggressive. Betting constantly and making people fold as I
first assumed he would.

The flop comes 10-4-3. I hit three of a kind. I bet 2,000. Everyone
folds but the Asian who raises me another 2,000. This is interesting.
I'm confident I have the winning hand. He probably has a pair.
Maybe a pair of Tens and an Ace.

Normally I would just bet down to the last card and try to make a big
pot. But super-aggressive players will often call in this situation if
you go All-in on them. They bluff a lot, and have a tendency to think
that others are bluffing too if they all of a sudden go All-In on them
because this is something they would do themselves.

So I go all in. He turns over a pair of Fours and Tens. Two pair.
It's a bad hand, and I wouldn't have called if I was him. I would
have figured I was beat. And, either way, it wouldn't be worth
risking every chip I had for this pot, but this is a super-aggressive
type and these types will do that kind of thing.

I'm a huge favorite to win this pot. The odds are 92% to 8% in my
favor. But you never know. My biggest fear is he'll catch another
four or ten to give him a full house. The dealer puts the next two
cards down and neither one shows up. However, two hearts hit the
board. I don't see it, but the last card gives him five hearts for a
flush. I'm busted out. The kid says, "Man that's a bad beat."


Yep, sure is. I congratulate the guy, wish the kid good luck and
leave. I finished 32nd in the tournament. Losing like that makes
people really mad. But those type of plays don't anger me. I made
the correct play and lost. That's poker. What I don't want is to
lose because I got caught bluffing or made a stupid play in which the
odds weren't in my favor.

Job Well Done

I was really happy with my play. I did great. Played the best I could
and left satisfied. I had a shot to win. I leave, go to dinner, and
come back a few hours later and see the final table. There are about 6
people on the table including the kid and the Asian fellow. They both
have big stacks. Yep, if that hand went the other way I might be there
instead of him, I think to myself. But it proves to me that I can
compete in these things and that's a good feeling.

I think about the tournament over and over, about the last hand a lot
of course. But one thing I realize is that it seemed like whenever I
bet it scared the other players. I got a lot of folds. Of course it
is because I entered less pots and therefore people who paid attention
new that I was always starting with good cards, increasing the odds
that I had something. They respected my bets. But I think to myself
that there was more to it than just that. I don't think people could
just look at me and tell when I had a great hand or was bluffing. I
think I was very difficult to read.

In one of the casinos there was a poker newspaper with an interesting
article in it about "Poker Faces," by someone named John Carlisle.
He writes:

"We are conditioned to think of a poker face as one that
intentionally displays no emotions. It is empty, cold, and almost
stone-like. Similarly, body language is expected to follow suit with
no emotional motivations. Movements and facial expressions are to be
nothing short of robotic."

"In reality, our faces are not built to be emotionless. Most of us
can easily decipher the difference between a smile produced by pride
versus a grin produced egotistical overconfidence. We, as human being
and social creatures, are simply not built to be emotionless. Even
when actively trying to display little emotionality and to remain flat,
we often still show obvious signs of feelings such as boredom, worry,
suspicion, or veiled excitement."

"To attempt to force an absolute emotionless state upon yourself will
only increase the likelihood of giving off information to your
opponents. The players who attempt to remain completely still while
playing are speaking volumes within that attempt. Likewise, it is
often within those awkward moments that the player is most likely to
crack, as the pressure at that time is more concentrated than ever."

"The poker face, with our current common definition and expectation,
is an undeniable fallacy. Those players who devote hours and days of
effort, energy, and concentration on trying to master a truly placid
poker face are wasting their valuable resources and time. Over the
course of several hours of play, you will inevitably display numerous
conscious and unconscious cues that indicate feelings and emotions. In
actuality, in only a few moments of play will you give away such cues.
Instinctually and intuitively we see these cues in others, and we can
instantly profile them as confident or insecure, comfortable, or
distressed, etc."

"At its essence, a good 'poker face' isn't about withholding
all your emotions. Instead, it is simply not revealing the cards that
you hold in your hand. Evaluating yourself and your play to identify
common patterns and tells is a part of this. Mostly, though it is
about mentally preparing yourself for battle before you peek at your
hole cards each and every hand. The best players find a way to reach
an unflappable comfort level within them. With that, they are able to
be competent and profitable players with a consistent basis. When they
have the nuts, they do indeed show characteristics of comfort and
confidence. Don't hastily expect that to be a tell, though, as when
they have nothing and bluff all-in, they still truly exude comfort and
confidence! When you believe in yourself and your skills at this same
level, you'll never find yourself needlessly spending time or
exerting energy working on a poker face."

Does this have anything to do with trading stocks???

Boy you better believe that it does! People think you have to have
good nerves and be able to control your emotions to make money in
stocks. And stock market success is indeed 90% psychology. But it
isn't so much about controlling your emotions. It's more about
understanding them and trying to remain focused on the right things.

Success in the stock market is about having a strategy and method to
invest in the market and sticking to it and not getting discouraged
when you have a temporary setback. The reason I believe I was hard to
read at the poker table is because when I made a bet I had a strategy
in mind. If I was bluffing I was using a betting method and if
didn't work then I was well prepared to fold and go on to the next
hand. I didn't think about controlling my emotions or movements at
all. I just focused on the game and what my opponent was going to do
and thinking about what I was going to do in response. Since I
appeared to bet with confidence it made my bets look even stronger than
they were in some instances, causing people to fold a lot of hands.

Payoff Time

In the second tournament, the next day, I made it into the money. When
we got down to 18 players they put us all on two tables and we
automatically got our entry fees back plus a little. I looked around
and saw that I had the smallest chip stack. The antes and blinds were
big and, if I didn't win any hands soon, I would eventually get
blinded out of the tournament. The chip leader was at my table and, as
the play resumed, I told him that I was in a desperate spot.

"I don't have enough chips to get in a hand with you and do
anything after the flop comes. I'm just going to have to sit here
and wait until I get two Aces and then I'm going to go all-in and
double up," I told him.

"That's what I expect you to do..." he replied.

Well, of course you can't just sit there and wait for two Aces. But
the basic strategy is exactly what I did. I decided to wait until I
get a pair or an Ace and a card higher than a 10. Those are all decent
hands that give you an over 50% chance to win when only one other
person is in the pot. It's the best I could hope for.

I went all in about eight times and, every time, the entire table
folded. Odds are some people had a few decent hands but folded anyway.
I think part of the reason I got a lot of folds is because I appeared
confident when I made the bets. I was telling myself I was sticking to
this strategy and would just hope for the best.

Enough people got knocked out that they moved me to the FINAL table! I
went all in again and everyone folded. Then I got an AK. The small
blind and big blind were to my left. Everyone folded up to me. I then
went all-in.

The small-blind folded. The big blind sat there and pondered his
decision. He looked ready to call. And I was in a spot were people
often try to steal the blinds so he was considering whether or not I
was bluffing. He folded and turned over an Ace and a Ten. I showed
him my cards. I was amazed that he laid down that hand.

I ended up finishing in sixth place. Looking back, we went from
eighteen to six people really quickly. I think a lot of people just
went on tilt because of the pressure.

Stock Market Lessons from the Poker Table

I'm pretty sure the only reason I went from eighteen to six was
because I appeared confident about my bets. Instead of worrying about
what I looked like to the other players I just stayed focus on playing
my strategy. I had this demeanor not because I am some sort of great
poker player, but because I have had to learn this attitude from years
of trading stocks.

And I had to remind myself about all of this after all of this poker
business was put to bed. The week before I left for Atlantic City, I
liquidated almost all of my gold stocks and put out two bulletins
telling the whole world what I had done and that I thought gold and
gold stocks were near a top.

As you know, I sold almost all of my gold stocks the week before I
left. I also sent out to bulletins calling for a top in gold. Now
gold was going higher and the stocks were up a few percent from where I
sold them. A couple of money managers I talked with on the phone had
done the same thing, not because of me, but for their own reasons, and
were a little annoyed to say the least.

I wasn't that troubled by it. I still felt confident that gold was
going to top out. Yeah, I didn't get out at the exact top, but I
didn't get in at the exact bottom either. I got in the day gold
bottomed, which was a week after the bottom in the stocks. Now I
figured the gold stocks could go up another 6% at most. That would
still mean that I have been long on 90% of this move since May. In
this business, it's considered a great success if you can catch 90% of
a move and that's exactly what I did

For me the trade was over. I was out and I wasn't going to get back
in either. I made more money on this trade than any trade I had ever
made. I wasn't going to beat myself over the head about it. Not now,
even though I knew there were lots of people buying now simply because
they were afraid that gold was going to get away from them. That's
the type of mentality you see at tops. You know the saying, pigs get
slaughtered.

I followed my indicators and game plan and got in and out when they
told me to do so and made a killing. I was not going to now suddenly
stop following my strategies and buy simply due to emotional factors
and nothing else. I am going to stick to my strategies and that means
I am going to have to wait until the risk/reward ratio comes back into
my favor for going long gold stocks before I buy again.

You see this is how success in the stock market is very similar to
success on the poker table. Both are about sticking to a strategy and
not getting fazed when a turn of events doesn't exactly go your way.
At one table, I sat next to some guy who would cry when he folded two
low cards and they appeared on the flop. If only he held them he would
mutter to himself. Well, he did the right thing. You don't play
crap cards if your going to win. But he had loser written all over him
for crying over such things. When someone complains over and over
about something like that they usually become impatient and bust out on
a stupid hand. He busted out.

In the market, it is the emotions of fear and greed that cause people
problems, making them do stupid things like buy gold at the top when it
is has been going straight up for several weeks and is now more
technically overbought than it has been during the past five years.

I'll go into more details with charts about the technical condition
of the gold market in an upcoming bulletin, but gold is extremely
overbought and the gold stocks are showing some troubling divergences.
The XAU/gold relative strength ratio still has not made a new high. On
Friday, gold went up more than 10 points and the gold stocks fell into
the red. In fact, the charts of the XAU and HUI made classic
candlestick key reversals on Friday.

On Tuesday, the Fed meets to raise interest rates again. There is a
lot of speculation that the Fed is going to drop its language of
raising rates at a "measured pace" from its statement. Gold has a
tendency to rally into Fed meetings and then correct afterwards. I
wouldn't be surprised if we see gold start to drop hard after the Fed
meeting.

A gold correction over the coming weeks will be another incredible
buying opportunity as I am convinced that 2006 is going to be even
bigger for gold stocks than this year was. I can't wait. I'll be
talking to you this week.

Oh yeah. By the way, I saw the kid again right before the second poker
tournament started. He told me he won the first one.


-----------------------------



Link of the Day:
Start a Love Train

This book review by Caitlin Flanagan is longer than some books, documenting parental hysteria over reports that teen-age girls are making new friends by giving them the full Monica. Two seminal parts describe the publication of a young-adult "train party" novel and Dr. Phil's confrontation of a teen blowjob queen on Oprah:

The Rainbow Party, an offering from Simon Pulse, a young-adult division of Simon & Schuster, takes place on a single day, in which a tough little sophomore named Gin issues invitations to a party at which she and five of her friends will perform oral sex on the lucky guests, a group of popular boys. The girls will each wear a different color of lipstick, so that when a boy has completed the circuit, his penis will bear the colors of the rainbow. The party is to take place after school, to last about an hour and a half -- including time for chitchat -- and to conclude before Gin's father returns home from work. ...

Dr. Phil, who has the vast, impenetrable physique of a pachyderm and the calculated folksiness of a country-music promoter, employs a psychotherapeutic cloak of respectability to legitimize his many prurient obsessions. "When you're saying 'It's just friends,' let me tell you," he raged at the poor girl, "a friend doesn't ask you to go in the bathroom, get on your knees in a urine-splattered tile floor, and stick their penis in your mouth. That's not what I call a friend."