Transcription (edited for readability)
Rahul: So I woke up this morning wanting to record another episode of this podcast. And so is my luck, there’s a construction crew outside and they’ve started jackhammering. So, this is less than ideal conditions for recording an audio podcast. But I also think this is apt for the topic that I wanted to talk about, which is thinking in probabilities and, that you should play poker. This is something I recommend for everyone. And the reason why is really two key concepts that I’ve picked up from the world of poker.
First is the concept of a bad beat where, say, you play a hand mathematically correct (you are advantageous from a mathematical standpoint to win) but you still lose. For example, you play a hand, you have 90% odds of winning, you bet accordingly, and your opponent has a slim 10% chance of landing that river card (last card in play) in their favor to win. Dealer flips the river card over and your opponent wins. You did everything in your power to play the game correctly. You played the odds perfectly but you still lost. So keep that in mind: “bad beats.” Now, the concept of tilting.
Tilting is when you start to get frustrated with the game (a bad beat, for instance, has disturbed your mental equilibrium) and in subsequent hands you start to play in a less than optimal manner. You’re frustrated, your emotions take over, you start to get aggressive. The phrase “tilting” actually comes from the world of pinball, when the ball falls straight through the middle of the two paddles and there’s nothing the player could have done about it–it was just bad luck. And so, on subsequent plays, they start to rock the machine, they start physically tilting the entire pinball machine out of pure frustration.
These concepts are interesting, because this often happens in real life. You can plan as carefully as you want, try to control as many variables as you like, and still something comes out of the blue to change your plans. Something comes out of uncertainty, out of the shadowy part of the map, to ruins your plans. And it’s not really ruining my plans but in podcasting today I did not plan for a construction site to be outside my window, for a jackhammer to be going … but that’s life, and there’s a probability of that happening.
Through these concepts there’s this understanding that okay, maybe there are no absolutes, there is no certainty, that life is just probabilities. In fact, one of my favorite physicists Richard Feynman is quoted as saying, you need to accept that your knowledge has a large part of it that’s going to be uncertain that if you’re trying to learn nature, or modern physics, or whatever it is, there’s a degree of uncertainty… and so life is actually probabilistic. And when you’re making a decision, or you’re executing on a plan, there’s a probability of success and there’s probability of failure, there’s a probability of a freak accident happening. You need to be able to accept the true nature of the world you’re living in.
When you play poker, you don’t just intellectualize this way of thinking, you viscerally feel it. When you’ve played thousands and thousands of hands (in a controlled environment where there’s a good balance of luck and control) you start to feel what 70% chance of winning feels like, what 60% chance of winning feels like, how often a 1% chance of failure shows up, how often a 2% or a 10% chance of failure shows up (and they show up very frequently). In your day-to-day life, you don’t often get to feel that but when you play poker, you feel it viscerally.
To play the game properly you need to persevere through bad beats as you do in real life. You need to not be on tilt, not let your emotions drive your decisions and, instead, to trust in your process. If you have stacked the probabilities in your favor, you should execute, and bet on a 90% hand the same way every single time because over the long run, you will win more than you will lose.