353 – Maria Konnikova: How to Look at Life Like a Game and Make Better Choices Because of It

Maria Konnikova made $200,000 her first year playing poker. That WAS NOT the plan. She didn’t even know how to play at first.

“I knew zero,” she said.

“Zero? Did you know the order of the hands?”

“No. I didn’t even know how many cards were in a deck.”

We were only four and half minutes into the podcast. And she already proved that it’s possible to start over at any time. Not only to try a new skill. But to master it—and profit from it— too.

You just have to take certain steps, which I’ll get back to.

I asked why she tried this.

Maria’s a writer. She’s a journalist and she’s written two New York Times bestselling books. One is about con artists, called “The Confidence Game: Why We Fall for It . . . Every Time.” And the other is about how detectives think, titled “Mastermind: How to Think Like Sherlock Holmes.”

So why poker? It’s such a complicated game.

I’ve probably put equal time into playing poker, chess and Go (the ancient Chinese strategy game invented over 2,500 years ago). I’m ranked a master chess player. And in Go I was about “1-dan.” But I would say poker is much more reflective of human decisions.

“It’s a game of incomplete information,” Maria said.

Poker is very ambiguous. There’s a lot of uncertainty. There isn’t always a “correct” answer. Whereas in chess, everyone sees the board. The correct answer exists. It’s known and it can be seen.

Poker’s unknown elements make it lifelike. Because what you THINK might be the best move, might not be. Because you don’t know what cards your competition has. That’s life.

“There’s private information,” Maria said. “There are things that I know that you don’t know. There are things that you know that I don’t know. There are things we know in common.”

So that’s one element.

“Then we have to play each other, as well,” Maria said. “What do I think you know? What do you think I know? And it gets into the human psychology.”

That’s where bluffing comes into play. Reading people becomes a necessary skill. Probability, math, and “game theory” are all part of it.

“Can you just describe what the phrase game theory means?” I said. I didn’t want to get lost.

“Game theory means you actually look at the world like a game, where everyone has certain payoffs for certain decisions. And given that, you have to decide what is the best way for you to strategically make a decision so that no one can exploit you.”

I was fascinated. She not only mastered poker, reinvented for a year (maybe more, we’ll see), but she also took on a whole new way of seeing life itself.

“I wanted to write about the role luck plays in our lives,” she said. That’s what the book was supposed to be about. But now, with her study of game theory, her success, cash winnings and the chance to play in the world series in a few weeks, the book has changed. It’s still being written. So she pushed the publishing date back.

“But I still wanted a way into this question,” she said.

Then she listed all the questions stemming her creativity:

“What is luck? How much of our lives do we control? How can you maximize what you can control? How can you learn to tell the difference between skill and chance? And how do you actually make decisions that way? That’s a huge question that gets very existential very quickly,  but that’s not a book.”

So she started researching and found “Theory of Games and Economic Behavior” by John von Neumann. Von Neumann’s a genius like Ed Thorpe or Claude Shannon. These are classic, brilliant guys.

Von Neumann saw poker as a model for life.

“e actually thought that solving poker would help prevent nuclear war,” Maria said. “He was advising the national government of the United States at the time and he was working on the hydrogen bomb.”

And he might’ve been correct about war and poker. Look at the 1950s. The Soviet Union had a backwards economy. Their nuclear situation was uncertain. No one really knew what they were capable of—if anything. And yet they were playing like they had two aces in hand. When, for all we know, they could’ve had nothing.

It just shows that if you can learn poker, you can play life better. Because it’s a game. It’s not facts and truths. It’s speech and behavior and chance.

So this is where Maria’s new journey began. She was ready to learn about the role of chance vs. skill. And I learned her path to success:

The first thing she did was hire a coach. She took a hiatus from her regular life as a journalist in New York (with thanks to a book advance from her new publisher), and immersed herself in the life of a poker player.

She hired a coach, Erik Seidel, who’s won millions of dollars playing poker—and multiple World Series of Poker bracelets. He even used to be a champion backgammon player. The guy kills at gaming.

She told him the book idea. He liked it. So he agreed to coach her.

“How did you go about hiring him?” I asked.

“I messaged him on Twitter,” she said.

I asked Maria about her coaching, how she studied, and how much studying she did (eight hours a day). She told me how Erik moved her from reading to watching to playing tables with small bets, then tables with slightly bigger bets, and so on.

There’s a right way to move up. And to learn. Maria did it. And she told me all about it. Now I’ll just wonder… if I were to try this myself, what would I turn to? What skill would I want to learn? What part of me do I want to improve?

I’ll let you know what I pick. And I hope, like Maria, I get the chance to be surprised.

 

Links and Resources

 

Also Mentioned

Ideas for a world out of balance… sent straight to your inbox!

My goal is to deliver to you a fresh perspective…

Something to help you make sense of the chaos.

Sign up below for Altucher Confidential, my tell-all FREE weekday e-letter.

By submitting your email address, you will receive a free subscription to Altucher Confidential. This daily investment newsletter delivers free independent financial forecasting and commentary along with carefully selected products and services that we think might interest you. We will not share your email address and you can unsubscribe at any time. Privacy Statement.