Excerpt from my paper on Survivorship and Randomness

Feedback Welcomed


My own personal experiences with survivorship are the primary cause of my interest in this topic. Beginning about halfway through my sophomore year of undergraduate study I took up the habit of participating in a five nights a week poker game with a group of other students at the University of Kansas. This group was maintained by a core membership of about ten individuals, with perhaps twenty or more others frequenting the game on a whim or only on a few occasions. Thinking back, the vicissitudes of random luck on certain individuals caused them to disappear forever, while other less skilled or intelligent players, are still playing to this day. Those with the initial luck sufficient to keep them playing soon gained the necessary experience and skills to become long term break even players, or even winners vs. weaker competition than my group of poker savants. An appraisal of the group four years later gives us a very dynamic and bizarre set of results with regard to poker success among the group‘s members, many of whom I am still cordial with. The earliest winner in the game, a player I will call Jeff, had a great deal of natural brilliance and aggression in his early style. Jeff won a tremendous amount of money ($30k+) from a start of perhaps $50. After this initial run, Jeff experienced numerous “blowups” where he would put his entire bankroll into a game, start to experience poor luck, start playing terribly, and subsequently lose everything he had won. Another of the early leaders, a player referred to here as Stephen, played very well compared to the group initially, showing advanced reasoning skills and the ability to go with his instincts. However, later on Stephen experienced numerous shocks to his confidence and was unable to continue winning, becoming a long term break-even player who never advanced to fulfill his, in my opinion, considerable potential. Another player, whom I will call Brett, was one of the biggest losers in the game initially, the other players would prompt a friend of his to invite him to the regular game to donate money (only a $20 or $40 buy-in early on, growing to $100 or $200 later). This went on for some time, but eventually things clicked and Brett began to win occasionally, always improving versus the field. Through the years Brett has become one of the most successful poker players any of the group have ever met, winning hundreds of thousands of dollars playing professionally on the internet. Many other players with medium level skills from this group have done well, and even more who seemed promising have experienced poor results and given up the game except as an occasional hobby. I personally have experienced both great success and huge blowups, my saving grace the fact that I have always taken money while winning and put it into a savings account or the stock market, convinced that the role of luck in the game was huge and that the extent of my results might only be the result of a prolonged lucky streak. As my experience has grown I realize that at some points the difference between success and failure was truly a coin flip.
The implications of my observations, while not at all scholarly or scientific, do have the advantage of being the result of first hand and highly detailed experience. Everything I witnessed in this game in which results come from mostly short term variance, combined with the necessity for basic math skills, intuition, emotional self control, fearlessness in the face of intimidating sums of money, and constant adaptation, lead me to believe that long term success was highly possible with the correct money management and determination. I was always told poker was unbeatable, like any zero sum or worse (when considering the money raked out of every pot by the house). This common knowledge was simply wrong. Yet I realized that in any individual, the ability to see odds clearly and make probabilistically correct decisions was an incredibly rare ability, especially in newcomers. Those who were successful in the game short term had basic technical poker skills the group as a whole lacked, however as we all gained those skills through practice and emulation, the long term winners emerged. Those long term winners, I call them survivors, had traits incredibly similar to the traits of surviving farmers, or of money managers with extremely long survival rates. Anyone can do well in the short term due to luck or random factors, but true success requires acceptance and expectation of the black swan event that will surely befall us all one day. For poker, all successful players have a fallback plan in case of losing their playing bankroll. They even have contingencies to make such a loss almost an inevitability, such as moving down in game size, or setting loss limits for a certain time period. As we have seen, the other risk filled environments have similar requirements for survivorship. Whether it be a particularly vicious flood that sweeps all but the field planted at the highest elevation away; or the utter and complete economic collapse of a particular country causing a market panic and a portfolio shattered into huge losses except for that one risk hedging short position which balances out a large percentage of the loss. (As an aside, my penchant for risk assessment and management has led me to consider a career in stock trading, or short term investing. However the more I read on the subject, the more I see the skills I gained from poker are merely an entrance ticket, and short term luck in this field is just as high a factor as that in poker. Truly verifiable results might take years or even decades to be revealed.)