You can’t argue with probability.
I kind of lost interest in poker when I realised it was a numbers game.
I mean, I can still enjoy the banter around a poker night. The competitive needling and ribbing. The drinking. The chips. The fleecing your mates.
But when I looked into how to be a better poker player, I realised that it was all about being able to calculate probabilities.
If you’ve got such and such in your hand, and the other players have such and such in their hand, what are the chances that you’ll be dealt the card you need.
And you’re not really playing each hand on its merits as such. Rather, you’re playing a large number of hands, and using the law of large numbers to get luck to run in your favour, over the longer run.
The more computer like your mind is – the more you’re able to work with complex probability calculations – the better a player you’ll be.
(Though there is an element of bluffs and poker-faces and all that. That’s where the game gets interesting for me.)
But when I realised that the key to success was to be as computer like as possible and just use to the law of large numbers to win, not each hand specifically, but on average, the game seemed a lot less sexy.
It’s kind of like the way they taught computers to play chess. They didn’t teach them the nuances of strategy and war-craft. Rather they just made them able to process an insane amount of iterations.
That is, start with the current setting of the board. Consider every move possible. For every move possible, consider every move possible after that, and then do it again. And again. Once you’ve considered all the millions or billions of possible scenarios, choose the move that maximises the likelihood of victory.
It felt like they sucked all of the humanness out of the game. Computers don’t need to hold their nerve when their backs are against the wall. They don’t need to keep their hand steady when they’ve got the upper hand.
Just crunch the numbers. Repeat.
It’s kind of why I like soccer. (Oh I could give you a thousand reasons.) It’s more in the moment. It’s more spontaneous. Instinct matters. Passion matters.
How many times have you seen a crowd change the direction of a football match? Ever marvel at the wonder of that? That the home-ground advantage is so real?
But as much as I love it, I know that someday humans will lose a soccer match to a team of robots.
And that day is probably closer than you think.
Check out this robot running down stairs and jumping over tables.
Sure, it doesn’t have feet yet, but give it a few years. I reckon by 2040 robots will have beaten us, (if they haven’t enslaved us all already.)
And it kills me knowing that they will have done it the way computers beat our grand chess masters – with nothing but cold, calculating processing power.
Because even in a game like soccer, the numbers matter. There are what we call low-percentage plays and high-percentage plays.
Bombing the goals from just inside half way is a low percentage play. (I know, from experience.) It doesn’t come off very often.
Working your way into the penalty box and then throwing yourself on the ground as soon as someone touches you is a high percentage play. (I know, from experience.)
Robots (or their programmers) will figure this out. They will work the numbers, and they will beat us.
Sooner or later it will happen. You just can’t argue with probability. Probability is like the blue-print for existence. Outliers always exist, but they’re always outliers. There is always a central tendency. There is always a high percentage play.
And it seems evolution works the same way. Throw enough iterations at the dart-board for long enough and you’ll hit the bullseye eventually.
(I personally feel like a bullseye).
You just can’t argue with the numbers.
I’ve personally found this reality hard to accept. I wanted there to be room for inspiration, passion, even fate. When I started out, I wanted to believe that each deal was a gift for this special little snowflake of me. That it was a special amazing deal, and if I just brought my own special brand of pluck and flair to it, I could pull of the deal of a life time.
But I know it doesn’t work this way.
Back when I started out in direct marketing, I saw the numbers game first hand. Sometimes you were working with response rates of less than 2%. But if you’re reaching enough people, you can work with 2%.
And if you can tweak your pitch and increase your response rate from 2% to 2.3%, you could make a huge difference to your bottom line.
Same story with property. There are high-percentage plays and there are long-shots.
You might think that you can make the long-shots work. But over a career of investing, those long-shots are going to come back to a central tendency.
So now I just work with it, I go for deals that will come off 99 times out of 100. I save my passion and pluck for the footy field.
Because I know when I play the numbers, the full cosmic weight of probability is on my side.
And nothing beats that.
Do you play the numbers?