Australian poker player Daniel Laidlaw discusses the effect a book called 'Antifragile' had on his thinking about poker and how the concepts relate to being a poker professional.
_
I'm on holidays at the moment so I've had an opportunity to catch up on some reading. I just read Nassim Taleb's Antifragile and, as usual when I finish an illuminating book, I try to review my frameworks of understanding through its lens to see if I can improve upon them.
Taleb's books are relevant to poker, since they are all about decision-making and risk-taking under conditions of opacity, which is essentially what we do as poker players – make decisions with incomplete information.
Taleb's previous books, Fooled by Randomness and The Black Swan, explained why understanding probability is crucial to decision-making in a complex, opaque world. It's about the EV of the decision, the scope of harm vs payoff, not the frequency of being right. This is a point most poker players grasp early on but which elites from other, more consequential fields routinely fail to understand, which Taleb scarily demonstrates. Antifragile is about why things do or do not benefit from volatility, randomness, uncertainty, etc., and its insights can also be applied to poker.
Taleb presents a triad: something is fragile when it suffers from volatility, is robust when it is immune to it, and antifragile when it gains from it. We want to be antifragile, a new concept – we want to benefit from the black swan, the rare unforseen event, or at least eliminate our exposure to it if it causes harm. In order to make responsible decisions (weighing potential harm against anticipated payoff), we need to learn to recognise fragility, and which decisions have extreme negative consequences when our beliefs are wrong.
Poker, taken as a profit-seeking endeavour, is fragile. To demonstrate the concept Taleb uses the example of the taxi driver vs the personnel department manager: the taxi driver's day-to-day income is variable but his job is antifragile (everyone needs taxis, errors lead to improvement); the manager's job is zero variance but his career is fragile (his employer can go bankrupt).
Poker as a job is the worst of both worlds in the sense it has both the variable income of the taxi driver and the fragility of the employee. While the independence and freedom to set one's own schedule make poker seem like self-employment or running a small business, it suffers the same downside as employment. It is vulnerable to volatility, in that any number of black swans have the potential to kill the profitability of the game. For example, an unexpected advance in computing power solving the game; government anti-gambling legislation; or operators / casinos arbitrarily increasing the rake to the point of unprofitability.
Smaller black swans have already occurred post-boom: think UIGEA in 2006 when Party withdrew from the US market, or Black Friday in 2011. One of the great fallacies Taleb highlights is how we recognise unexpected events have occurred frequently in the past, yet typically our models of the future don't account for them. It would be preferable to have an antifragile income and play poker as a hobby.
That's poker taken broadly, but how do Taleb's concepts apply to the game itself? If we're winning players, then we're antifragile, because we benefit from the variance inherent in the game. We want to see extreme fluctuations. The best games are ones in which stacks are flying around; it's usually indicative of people making large errors from which we gain. In the poker literature, I think Tommy Angelo has come closest to capturing this idea with his concept of ‘reciprocality’ from Elements of Poker: where there is difference between players, money flows, and where there is not, it doesn't. If we have an edge, we love variance.
I suspect there is also something to be learned from Taleb's barbell strategy. This is a dual strategy of benefiting from extremes at both ends. E.g. very safe investments combined with some highly speculative ones, as opposed to putting everything in moderately safe investments that may not actually be safe at all due to the presence of black swans.
What might a barbell strategy look like as an approach to poker? An example might be ensuring you are super-rolled for your regular cash game stakes, while also allocating a small portion of your bankroll to playing large-payoff tournaments. You have no risk of going broke in the cash game, and no excessive stress from the variance – remembering that being at the coal face of variance, i.e. playing poker, necessarily entails an emotional deficit. You cap your speculative risk by only playing, say, a limited number of these tourneys per year so the downside, bricking them, is relatively small. But you benefit from exposure to the positive black swan, the very rare event of binking one. Or, if you only play tournaments, a barbell strategy might be grinding a low variance schedule on a daily basis, but with occasional shots at large-field high-payoff tourneys on Sundays. This approach also has the existential benefit of making life a little more exciting, averting what Taleb calls the modern disease of "touristification", adhering to a fixed schedule.
Within the game, winning poker follows a barbell-like approach, too. Mostly, we are extremely conservative, folding the majority of hands preflop. But when we choose to invest money in the pot, we usually do so aggressively by opening for a raise. A high degree of conservatism mixed with a high degree of aggression, the trademark "tight-aggressive" style, is a barbell. Contrast this with the "middle road" approach of the fish, trying to see lots of flops for a small investment, with the illusion that he is taking less risk in doing so.
In conclusion, Antifragile shows us that poker is fragile, combining two of the undesirable elements of wage slavery from the working world (income variability with job fragility). However, as players we are antifragile, because we benefit from the inherent volatility of the game (just not emotionally). And there is scope for implementing a barbell strategy, which winning play broadly follows.
_ _ _
Follow Daniel on Twitter @Choparno and read more of Daniel's blogs here
