Friday, March 26, 2010

Fooled By Randomness

I'm reading a book at the moment called "Fooled by Randomness" and it's really interesting about how luck figures a lot more in day to day things than we think. The book talks alot about market traders but I can't help linking it to poker. I read this below last night. I'll copy it exactly as the book says, remember it's not about poker but about business, but i can't help changing the works from business to poker in my head!!

"Can we judge the success of people by their raw performance and their personal wealth? Sometimes - But not always. We will see how, at any point in time, a large section of businessmen with outstanding track records will be no better than randomly thrown darts. More curiously, and owing to a perculiar bias, cases will abound of the least-skilled businessmen being the richest. However, they will fail to make an allowance for the role of luck in their performance.

Lucky fools do not bear the slightest suspicion that they may be lucky fools - by definition, they do not know that they belong to such a category. They will act as if they deserved the money.Their strings of successes will inject them with so much serotonin(or some similar substance) that they will even fool themselves about their ability to outperform markets (our hormonal system does not know if our successes depend on randomness). One can notice it in their posture; a profitable trader will walk upright, dominate style - and will tend to talk more than a losing trader. Scientists found out that serotonin, a neurotransmitter, seems to command a large share or our human behavior. It sets a positive feedback, the virtuous cycle, but, owing to an external kick from randomness, can start a reverse motion and cause a vicious cycle. It has shown that monkeys injected with serotonin will rise in the pecking order, which in turn causes an increase in serotonin level in their blood - until the virtuous cycle breaks and starts a vicious one (during the vicious cycle failure will cause one to slide in the pecking order, causing a behavior that will bring about further drops in the pecking order). Likewise, an increase in personal performance (regardlessof whether it is caused deterministically or by the agency of lady fortuna) induces a rise of serotonin in the subject, itself causing an increase of what is commonly called "leadership ability". One is "on a roll". Some imperceptable changes in deportment, like an ability to express oneself with serenity and confidence, make the subject look credible - as if he truly deserved the shekels. Randomness would be ruled out as a possible factor, until it rears it's head once more and delivers that kick that will induce the downward spiral

Isn't he perfectly describing why we tilt in there??

Poker is about break even at the moment but not played a =lot. Below is a bit of a mad hand earlier. Have villain crushed ore, flops nut straight and then.. well see for yourself!!

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