Having spent far more hours playing poker than sanity allows, I like to think that I have more than money to show for it. I hope that I have come away with lessons that apply to business, investment, and life in general. That may be a stretch, but I cling to that illusion.
I am constantly trying to figure out why the best players are that good. It’s easy enough to see why the bad players are so bad. They bluff too often, call too often, don’t raise to protect their hands, don’t control their emotions, and have no understanding of position. You can become a mediocre to good player simply by addressing these problems, but great players have something else. As a matter of fact, even the great players still have some of these problems on an occasional basis.
Something else makes them great. I don’t think it is that the best players have more heart, more brains, or more luck, though everything does go easier when you have more advantages on your side. I think what separates the great players is their awareness that poker is a relative game. The great players spend most of their attention focusing on what their opponent has. Bad players often don’t think at all about the opponent’s cards, good players think about them at the time of decision, and great players think about them even when they are not in the hand. Every time you show a hand down, you are giving a great player another weapon to beat you with.
The great player knows that there is no greater advantage in poker than knowing your opponent’s cards. We could all be poker millionaires if we knew what our opponents have and they don’t know what we have. One of the best examples of this was a couple of years ago in the main event at the World Series of Poker. Sammy Farhar called a massive pre-flop raise early on the first day with only a pair of deuces. He knew that the nervous amateur making the bet would not have made that bet with anything other than a pair of aces. When a deuce came on the flop, Sammy got the rest of the amateur’s chips. I’m don’t think that the implied odds that he got really justified Sammy’s call, but know just exactly where he stood was a powerful incentive that he could not resist. He made it pay off.
Daniel Negraneau is always talking about what his opponents have when he is heads-up in a hand. I am sure that he only refrains from discussing what other people have in their hands in other situations because that would be outside the etiquette of the game, but I am sure he is thinking about it all of the time. I find Daniel the most instructive of the leading pros to watch for just this reason. Listen to the questions that he asks himself.
Why did he bet that much? Why did he check? What did that card do for him? How likely is it that my opponent is bluffing? Is this a guy who only bets the nuts? How nervous is this person about this bet? How many chips does this opponent have left? What is this opponent likely to do if I raise?
Daniel doesn’t always come up with the right answers and he’s quick to notice when he is wrong, but he is always asking and answering the questions. That gives him many chances to be right than he would have if he never thought of those questions.
It’s just like that in business and investing. Asking all of the right questions doesn’t guarantee that you will win, but it does increase your chances dramatically. There are never any guarantees, but there are lots of edges if you look for them.
Just spend a few minutes thinking about the last few years at some companies disappeared. They disappeared not because they came up with the wrong answers; many disappeared because they simply didn’t ask the right questions.