I Still Know How...

"Confessions of a Riverboat Gambler." The art of playing Poker is to do with at least two variables and one constant. Firstly, it concerns the performances of other human beings and that is a variable factor. Secondly, it concerns one's own skill at judging a weak hand from a stronger one – and that too is a variable, because being human one's own fineness of judgement must be accepted to fluctuate within ranges and, moreover, it is possible that one also learns more and more over time and therefore becomes continuously relatively better at this element of the game. Therefore in any given game and at any given time of play, these two variable factors can offer at best a 'general expectation' value as to logical outcome. In layman's terms we carelessly explain these relationships in terms of 'chance' or 'luck.' There is chance and luck involved, but there is also such a thing as mathematical tendencies. There is a leaning towards one particular likely event outcome (let's say, 'success') or another ('failure').

But the factor that is most regularly forgotten about as to its relevance and bearing on real outcomes, is that of the stake that is to be played for. Risk is the chance of an outcome times the consequences thereof.

And that is a very important thing to remember. If one could play for a million-dollar outcome, using a tiny bet, multiplied by ascending levels of skill and judgement, one could keep doing it a long time without much personal financial damage. Then, if one could do it with a mathematical leaning towards the possibility of success, this becomes the arena and context in which a professional risk-taker will seek to operate.

This understanding makes investing in stockmarkets of today, not rational to the professional. In spite of all the hooha from large fund managers and the supposed 'wow' factor of the sizes of money they bet, and for all the worth of the credentials they are said to have, the relative outcomes played for are small by ratio. And that automatically eliminates these people from the class of true professional. In the nearest national stock exchange located to where I presently reside, whilst dividends actually paid are very weak, the price times earnings multiple for the top 20 stocks is an average of 8:1. And this approximates the historical lowest ever ratio. Unless the national domestic Money Supply setting is adjusted to increase, one could in the first place certainly not invest for dividends on an annual basis, and nor could one envisage the prospects for capital gains.

But underlying the broad equities and bond exchanges – which is to do with a previously fashionable financialisation of business syndrome – real business goes on. Everyone from accountants to the financial media and governments and their central banks as well as retail banks too, all claim loudly that the levels of activity are lower than during past times, and even that a possible deflationary spiral is afoot. And that of course, is the difference between the professional and the parasites. Parasites must keep their hosts dependently weakened or at least in a permanent state of sufficient enfeeblement so that they cannot rid themselves of those parasites or run away from them. I like therefore that image of the losing gamblers, bust gamblers, or crooked gamblers, being thrown into the murky river as the riverboat wends inexorably onward towards its ultimate destiny of the final shoot-out scene... Stealth in avoiding being seen at all by the parasites is a key. A million dollars must be at stake for the winning. You must play in the game of the financially strong. If you intend to have the winning hand, and you are a professional, you must play the longest odds, not the shortest odds. In other words, you must take on what others think is the worst chance, not the best chance, and be granted the greatest odds. There is a miasma of true mystery about people like me. Because there will always remain some element of doubt in observers' minds as to whether we just guessed right, calculated correctly – or had some other form of inside knowledge. Winning at gambling as a professional, is a magician's trick. That is to say, it involves some magic being achieved. That much I will confess, though only as an entertainment...

Calvin J. Bear