How teenage poker prodigy Steven Silverman won, and lost, millions
washingtonpost.com
washingtonpost.com
I've always enjoyed playing poker. I'm pretty sure I could make a decent living at it too, if I put my mind to it. But only after reading Paul Graham's articles on Wealth, I realized why making a fortune from poker always seemed "empty" to me: you're not really creating wealth that way.
My theories as to why would be too long for this forum, but the two big ones are the losing streaks and lack of respect for money.
Losing streaks are like nothing you can understand until you've been a professional poker player. Imagine if you went to work, performed flawlessly, far better than all of your coworkers, and instead of getting paid your bank account got debited and your boss told you "you really sucked today". Then that happens every day for a month.
Humans (and especially poker players, who study probabilistic decision making as a hobby) are conditioned through life to believe outcomes are a direct result of actions. Do a good job at something and work hard at it, you succeed. Do a bad job at something and slack off, you fail.
While this is true in poker in the long run, the long run can be a long time. I broke even for a year at one point, and that's at cash games. Meanwhile donkeys without the slightest clue what they were doing were lucking ass backward into multimillion-dollar tournament prizes.
You can't even fathom what this does to you emotionally until you've lived through it. It engenders self-doubt, which gets you off your game, which probably makes you play worse, which you know you're doing but aren't sure exactly how, or what to do about it, which in turn prolongs the losing streak. There is no end to it.
The lack of respect for money is universal in a world where thousands of dollars change hands in minutes. It's impossible to think "I shouldn't buy that Lexus I've had my eye on" when you just made enough to do it in the last 4 hours. Everytime I played a pot I was risking far more than I was playing credit card roulette for dinner for 4 at Craftsteak. (BTW, my luck at credit card roulette is legendary. If my luck at poker had been half that good I'd have won the WSOP.)
I had a girlfriend for most of that time who went pro. She was pretty good, too, but she had that lack of respect for money in spades (heh). She'd spend a whole day grinding out $3000 in the $40-80 game and then lose $20,000 in an hour at the Pai Gow table.
One day she decided to skip the Pai Gow and went to the mall instead. Bought all kinds of designer clothes and perfumes and electronic gadgets. She practically filled up the car. When she came home there was this shocked look on her face. I asked her what the problem was and she said "Look at all the stuff you can buy for only $5000! I'm so used to using money as ammunition I forgot you can trade it for stuff."
I have played live medium stakes poker in Vegas for 14 years now. Have witnessed the boom firsthand. Before the poker tv "boom" it used to be sort of embarrassing when family and friends from back home would ask about poker and what not because it always had a negative mystique about it. During the boom everyone was all of a sudden interested and wanted to listen about how exciting it must be. But the boom completely skewed reality and perspectives unlike anything I have ever seen, even compared to the housing boom.
I can't count how many times in past 7 years I'd be at table full of early 20 somethings claiming they are or am thinking about going "pro" (quiting job/college for poker FT). For every Tom Dwan type of story there are probably 1000x the stories similar or WORSE to the Washington Post article. It was never my business so I never made it my biz, but I used to be sad seeing so many talented/bright and charismatic kids be so lost and throwing away years chasing the rush and shot at being famous. Gambling, in any form, takes a very special tough minded character to do in long run since, like matt says, the losing streaks will come. I have told my wife one thing I wish I could erase from my mind would be poker. And I am a long-term winner! It just wears you down and matt mentioning how most can't fathom the emotional swings is true. It becomes worse the more early success one has because the resulting crash will be harder.
The smoke and mirrors of poker created by TV is FAR from real. Away from the lights and camera while they hype most of these guys up is mostly a collection of low lives grinding 60hrs a week on their asses just to pay the bills. Many of the big names the world has come to know have also gone broke at times. Not always because of poker but it just harbors other bad habits.
Anyway, enough of that. I do want to say Matt that during it time I was an avid follower of your blog. I could always tell you were one of the more grounded and mature young players that was having success and always knew you wouldn't let your head get too big. Sorry it took a tragedy of that magnitude to get you out but in the end it was probably best.
I think that a very, very small percentage of the population can happily play poker for a living; but for everyone else, I think long-term exposure to poker will almost literally melt your brain. The sheer amount of stress I used to experience during high-variance poker sessions was just absurd--I sincerely hope there's nothing else like it.
The great paradox of poker is that the more you care about the money, the less you are able to think rationally and impartially. There's a strong argument that the only real difference between world class tournament players and averagely profitable semi-pros is the ability to keep playing your 'A' game when there are millions of dollars on the table. Plenty of skilled pros end up blowing their money because it just doesn't mean anything to them - the obvious example is Stu Ungar, who earned millions at poker and lost millions betting on golf.
It doesn't matter one jot how well you play at your best, what matters is how well you play when you're stressed and upset and ill and exhausted and it's 2am and the fish whose money you need to take is calling your mother a whore. That's the real job of playing professional poker - you're on a tightrope where an hour of perfect poker earns you $80 but an hour on tilt can lose you $800. The skills that allow you to turn pro are learned as an amateur, but there's a whole other set of skills required to stick it out without losing your mind. I had the former, but not the latter. I walked away from poker because I am absolutely certain it would have killed me.
Sincerely, A guy who used to do this
I also used to play a ton of online poker and it was my ability to balance it all that ultimately convinced me I'd be better off trying to found a startup.
A lot of the skills overlap, which is why many of the successful high stakes players also have profitable side businesses.
If you're looking for an excellent discussion by a bunch of very successful online players on what they want to do with their lives, check out this thread, which is titled Poker vs Law School vs Trading:
http://forumserver.twoplustwo.com/19/high-stakes-pl-nl/nc-my...
You list some things that make it really hard to live a normal life, but I disagree with some can offer counter-points to others.
You say there is little interaction with other people. This is true for many but doesn't have to be the case. I spend a lot of 'work time' talking with like-minded professionals, studying together or just daily banter. I probably have more social interaction through work than the time I worked in a small development company, and certainly more during my periods of (failing to) run startups.
You say working hours are partially out of your control, but with most forms of poker you can work any time of the day (literally any time in 24 hours, 7 days a week) - some times may be better than others, depending on the game you play. There's a lot to be done away from the table if the games are quiet. Compare this to the lack of flexibility with any other job: either a rigid 9-5, or at least restrictions on when business is to be done (conference calls, deadlines).
It can be stressful and tiring, but listening to some start-up stories here on HN, it can hardly compare! Some of you guys are working yourselves to death! Certainly you can put in long hours in poker, but it's a daily choice. The more hours at the table, the more money. I also believe that poker is actually fairly low-variance compared to other jobs, such as a running a start-up: Long days with long nights, hacking at weekends, all for a very high risk of failure months or even years down the line. With poker you can't count on a weekly (or even monthly) pay-check but in the long term, you cash in with regularity
Personally I like to work around 3 hours a day, 7 days a week. I might put in a short morning session, and a short evening session. Doing this it feels like I have all the day off to spend socialising, hacking on some pet project, relaxing. You don't have to hit the high-stakes to make a living from poker. In the "5-hour-work-week" concept of salary you earn very high, because I have no commute and flexibility to live anywhere in the world. I have moved continent 3 times in the last 3 years. I can jump on a plane and visit friends anywhere, and as long as I have an internet connection I know I can be there, on holiday and making money at the same time. And if you manage your time correctly, you should have time to fully develop other projects, be they startup ideas, or just other, more life-fulfilling hobbies.
There are certainly negatives to the job, but - at least to me - there's an overwhelming number of positives that many (including a lot of professionals) just don't focus on. If you take advantage of what the job has to offer there's no reason it should be the lonely, frustrating grind that many feel; quite the contrary.
It's strange how poker works but I imagine Buddhism and poker to be the most complimentary religion-to-profession complement on the planet.
And I agree with the first point - poker is an empty job. You do not create wealth - you make another poor soul, likely a gambling addict, further burdened by that addiction. Meanwhile, the only person you're "creating wealth" for is the guy with his feet up that owns the poker room.
Does a sportsman make wealth? What about a professional chess player? Snooker player? Pool hustler?
What about a brewery, "further burdening that addiction" of alcoholism? What about the barman what served the drink? Just creating wealth for the pub? The sommelier?
What if I start a start-up that's about 'social' betting, like a betfair exchange about film stars? What if I shake up the gambling industry with my social facebook Zynga poker that launches real-money tables?
Your concept of what is a 'valued' job seems very narrow.
Gambling is an enjoyable past-time for millions, throughout history, in cultures around the world. For every sad story of gambling addition, that are thousands who enjoy gambling responsibly on a recreational basis, just for every alcoholic there are thousands that enjoy drinking socially. And some social gamblers sometimes blow a bit too much, just like social drinkers sometimes go overboard at the weekends. Things aren't black and white.
And those professionals provide the entertainment that others enjoy, either directly (from spectators on TV) or indirectly (providing that example that 'the game can be beat').
Sure it's not the most worthwhile job in the world in the grand scheme of directly creating wealth, or improving man-kind. But then, dare I say it, nor do do many a start-up.
Sure, professional sports players, chess players, etc. are not creating material wealth (I'll sidestep the hustler issues for now). The thing is, they are creating wealth by pg's definition, i.e. creating something people want (entertainment, in this case, that people can view).
Compare that with pro poker players. Ask most players what they want (who they want to play against), and they won't tell you that they want to play against a pro. I think pros make most of their money, "preying" on poor players who don't realize they're up against a pro. In that sense, pro players are not really creating wealth, they're tricking other people.
Of course, I'm completely ignoring a part of the poker world which does create wealth, i.e. the televised matches. These are obviously equal to spectator sports. Still, I think the majority of players who grind out a living playing against weaker players really aren't adding wealth to the world.
Hope that was clear. I'm not anti-poker players or anything, I love poker, I'm just explaining why I would never do it for a living.
Or perhaps you have a gambling problem, but are successful enough to deny it.
FTA: > "Looking back, what I've figured out," he says, "is that no matter the amount of money poker players win, they still want more. You're never happy."
However, if it is an addiction they may be financially successful, but unable to psychologically satisfy their their appetite for money or risk.
I wouldn't say that any serial startup founder has an "entrepreneurship problem", but if they were never satisfied with their accomplishments, I would view that as a negative.
The quote from the article was: >"[T]hey still want more. You're never happy."
I would consider that anyone who repeats a cycle of behaviour with the goal of achieving happiness or satisfaction but who always feels disappointed or unsettled might have a problem.
An alternate perspective is that you're providing an education for a fee.
Sounds exactly like my current situation as an internet entrepreneur :)
My group were some of the first people to adopt player databases to get stats on opponents. Some kids at my college made the first of these types of programs, and we knew them.
Any smart person can make money playing online poker. But there's more money in making software, by many orders of magnitude.
You're going to make people redundant. Your company is going to destroy someone else's value. It might create more in total, but you're going to cause damage.
It can't be avoided.
Entertainment, because professional players are allowing amateurs to pay to meet better players, and test their skills against them. There really aren't many other games where this is the case.
Education, because there are huge numbers of available lessons (in both hard and soft skills) for players who decide to think about the game deeply.
I don't see anything "empty" about it. But then again, I'm a winning poker player who ported lessons from poker into everything from business to my golf game. It's had such a positive impact on my life that I can't view it negatively.
I got a lot of the busto rumors when I quit too. In fairness, it's a lot more frequently the case than someone successful walking away, but I'm always glad to hear of other people doing it. A really young kid named Jason Strasser became one of the best tournament players around and then gave it up to go back to school.
It's a seductive lifestyle, but often not a healthy one, and rare is the poker player who realizes there's much more to life than money while they still have some of it left. Unfortunately in my case it took my mom dying to put it in perspective for me. I hope for him it was something less traumatic.
In addition, there's no real visualization of the value of what you're playing for. It's just numbers on a computer screen. By far the most legendary story of a young player who's completely detached from the money is the Isildur1 phenomenon. [1]
I played high stakes online at a young age and felt the same sort of detachment- the appeal of "getting to the top" was too much to pass up to grind steadily at lower stakes. One of the problems is that over the past ten years, the dynamics of online games have changed considerably. Even an 18 month difference shows a dramatic development in the style of play you see- I'd contend that poker training sites like cardrunners play a large part in this. So a lot of players go on a tear for nine months, then have a big downswing as a result of moving up stakes too fast and failing to adjust their game.
One thing you see sometimes is tournament players like Zugwat trying to play high stakes cash games. It's well understood that in poker, the deeper the chip stacks are (defined by the number of big blinds players have) the more technically demanding the game will be. As tournament poker tends to be played with stacks of 10-50 big blinds, and cash games with 100-500 big blinds, the former requires less decision making. This is for a few reasons, but the main one is that on average you'll have fewer decisions to make with a smaller chip stack since you will be all in earlier in the hand.
Tournament players who are admittedly great at what they do often try to dabble in cash games because they've made enough to bankroll themselves for it. I remember watching Zugwat play Tom Dwan (who goes by the alias 'durrrr', [2] and talking to a few of the other high stakes regulars who had played him previously. The consensus was that he was pretty solid (which is saying something- many cash game players have a somewhat condescending attitude towards tournament players because of the supposed simplicity of tournament poker) but he had bit off much more than he could chew and would inevitably lose a good chunk of his bankroll before realizing it. I think he played four or five tables of 200/400 ($40,000 buyin per table) and lost about a quarter million that session. To his credit he was surprisingly mature in the chat box, something that can be hit or miss after large losses.
[1] http://en.wikipedia.org/wiki/Isildur1 [2] http://en.wikipedia.org/wiki/Durrrr
Username: getjiggly@sogetthis.com
Password: bugmenot
(For non players, this means that you are a winner at lower stakes, say $5/10 - but a common trait is that you become bored with that level because the most you can win each day is ~$1000-3000. As you move up levels the play is a lot harder (exponentially so). Players like this guy crush the small levels and think they are good enough for the higher levels, and just end up losing it all - often blaming their luck in the process. If you look at his chart, you will see that he won it all playing medium stakes, and lost it all (in a lot shorter time) playing high stakes).
I'd guess his losses at 40k/60k/100k NL /are/ due to luck; doubt he's a -20BB/100 loser at those games.
Actually the article headline seems inconsistent with the text, which suggests he decided to quit to pursue other things and is not in fact "busto" as rumored.
Not saying you're wrong but it's another possibility.
In some respects, those who do really well (millions won & lost) are akin to athletes or celebrities. They work strange schedules -- for poker you can work whenever -- and have much more money than they could have ever imagined. You can afford to do almost anything, go out 7 nights a week and travel the world. Money is easy come, easy go.
It's rather fascinating. It is a tough lifestyle to maintain a balance when you can lose thousands upon thousands and be playing well. I recall a friend telling me with a dead straight face he lost over 100k the past 2 days and had played some of his best poker...
In the end of the day, I would have to imagine it would be a lot tougher on the spouses. Although, in many respects, we as founders are taking similar risks (uncertainty).
EDIT: I mean poker playing websites.
Two Plus Two is probably the most popular poker forum. There's also a few subscription based training sites like CardRunners, Deuces Cracked, etc. Steve Silverman is a coach (although he doesn't put out many videos) at leggopoker.com.
I played online for a living for about a year and a half, and they're awesome.
I can still remember the exact moment back in 2002 or 2003 where I realized just how much than me better Joe Tall was. We were having a cigarette near the Foxwoods poker room and he reviewed the action on a few hands we'd just played in a 20/40 game, and he remembered them in more detail than me, but he also processed the detail differently to emphasize different aspects of my game.
I was a winning player but after that night I stopped playing for a month, did nothing but study books, analyze hands and sessions, and grind out math to see if some of my assumptions about lines against various hand ranges were correct.
After that I got a lot better, jumped limits, and ended up meeting DeathDonkey in a 100/200 game at Commerce and again realized I was outclassed.
I'd say I owe them a debt of gratitude, but I'm pretty sure I already paid it at the tables.
I likely know who you are but not exactly from the story. Thank you so much for the comments. Hope all is well and you are still grinding and working.
-Joe
Seriously though, I meant what I said about the debt of gratitude. Massive thanks.
Market makers are also similar.
(Also, the rest of your comment makes no sense. "High frequency trading" is just trading at high frequencies; it's not any different from any other trading strategy. Your program quotes the other guy a price, he either accepts or doesn't.)