"Yes, It's Almost True..."

After TheLegend called me out in his blog, I decided I had to respond with at least some sort of explanation. Long story short—it’s almost true. I was sitting at a table with Jane Gold. I’m not going to lie, but I didn’t even know who she was until an hour or so into the tournament. So I was sitting there, playing like absolute ass when my chip stack wasn’t really going anywhere. The fifth round came along and the antes started going up. I was able to steal a few pots by going all in, but it wasn’t nearly enough. I ended up making a horrible mistake, one that I hardly ever make. I was one spot behind the button. There was one caller and then this chick bet the pot. I looked at her chip stack and thought she had about 12k in chips. Everyone else folded to me and I decided to make a move. I had about 18k in chips and thought an all in would force this chick to fold. So, I did it. The small and big blind both folded and it went around to the woman who raised it up. She says, “I’m all in.” And as she moved her chip stack to the middle of the table, I saw a stack of 4k behind the rest of her stack. So, instead of having 12k like I thought, she had 16k. I had a somewhat decent hand with Q2 suited diamonds and she had AK off-suit. I instantly knew I was fucked if I lost the hand because I’d be left with 2k in chips with antes at 50 and blinds at 200/400. There was a small crowd that gathered around this woman before the flop came out. I thought to myself either she’s somewhat important or she just has a decent amount of friends. Anyway, the flop came out: 10h, 4c, 5s. The flop was shit for me and it just made her hand that much better. The turn and the river were Jh and 7d. After making a terrible decision to go all in I was left with a measly 2k in chips. So basically, Jane Gold knocked me out of the tournament. But technically it was the next hand that knocked me out. I went all in with 45 suited hearts and got busted out. It wasn’t until a little while later that people told me who the woman was that “knocked me out.” Nonetheless, the whole experience was completely emasculating. Maybe I’ll think twice next time before I try to brag. Probably not, but hey, it’s an idea. And Jane Gold, if you’re reading this, thanks for the story.

"Psychological Warfare (Part 1)"

Well Happy Fucking New Year. Now that we got that out of the way, let’s move on to some business. How about for 2008 we throw out all of those half hearted New Year’s resolutions that we all make and start to focus on some real ones. How does making money sound? Or better yet--getting the best of your opponents in gambling, work, and in life. I don’t intend to have you do this by cheating, stacking the odds in your favor, or any other easy way out. I intend to have you do this by showing you the art of what I call psychological warfare.

I can attribute psychological warfare to much of the success in my life. It’s not something that I was ever taught, which is why I want to share with you this very successful and rewarding tactic. Over the years I’ve learned that most people in a given trade--whether it’s distressed debt trading or playing cards—all have a similar skill set. They can all compute numbers quickly in their heads, they all have people skills, and they certainly all know about greed and money. However, there is one trait that separates the men from the boys, and that’s the ability to manipulate a situation and fuck with the heads of those going against you. This, my friends, is the skill of psychological warfare.

Have you ever sat at a poker table and absolutely despised the player sitting across from you? Has a co-worker ever made you want to put their face through a paper shredder? Did your anger towards that person affect the decisions you made? Let’s be honest, it’s happened to all of us before. The moment that you let these people get to you is the moment that you become the fool. Don’t let that happen to you.

So, how do you employ psychological warfare? Well first of all, you have to want to be deviant. If you feel bad distorting someone else’s perception of reality, then you should probably stop reading this blog and visit www.imsoft.com. All psychological warfare starts out with an action that makes the other person think twice about it. If you can get the “enemy” to think twice, that’s your window into the weak side of their thinking. It buys you time, and it certainly gives you an edge. The first stage of psychological warfare doesn’t’ have to be malicious. It can be friendly, and done with a smile. The first stage can go something like this:

Muckable Hands Are Like Distressed Debt

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Let me first explain to you what distressed debt is, if you don’t already know. All companies need to borrow money at some point. They do this by issuing debt, an obligation to pay a lender their principle invested plus some level of interest. This interest could be referred to as “juice,” a term that you gambling junkies may be more familiar with. These companies use this borrowed money to invest in projects that will earn them a higher yield than they are paying to their lenders. Most of the time, these companies are able to service this debt (pay it back) with relatively few problems. However, there are situations where these companies for some reason can no longer pay down their debt. The company goes into financial turmoil (distress) and flirts with bankruptcy. Once they reach this point they can either file for bankruptcy or they can attempt to turn the company around. This is the turning point. The debt that they have issued is no longer desired by investors and it sells for cheap and offers a ridiculously high yield. This is a classic supply and demand issue. The demand is low, so the prices are also low. Nobody wants to mess with this stuff. However, there are times where the companies turn their financial troubles around and start to operate profitably again. When this happens, the debt becomes desirable again. High demand means higher prices, and higher prices mean huge capital gains for those who held on to this distressed debt.

So how does this relate to poker? Distressed debt is like a shitty hand in poker—no one wants to play it. They think it’s shit. This may be true, if they don’t have a trader’s mentality. To put this into context, consider the following example:

There are seven players at the table, besides yourself. You’re the button. Suppose there are three calls before the betting even gets to you. You’re holding 4/5 off-suit. Because there are three callers already, their hands must be relatively strong. Some players may fold your hand, but not a trader. A trader would see this as an opportunity to cash in big. Since there are already three callers plus the small and big blind, most of the players are pot committed. You could raise it up a modest amount and probably get a few callers.

The flop comes out Ace, Two, King. This seems bad for you and great for the others in the hand. If they called your raise, chances are they may be holding an Ace or a King. So they think they’re in great shape. They bet and the pot starts getting bigger. You just call, waiting for that Three to fall so you hit your straight. The turn comes and it’s a Three. You’ve just hit your straight and now have the other players in the hand crushed. But they don’t know it yet and they keep betting. You can raise or just call--your choice. When the cards are finally turned over, you’ve made a large amount on a “shitty” hand.
The point is, to make big money, you have to take risks. Clearly, you won’t win with this strategy every time. In fact, you will probably lose more often than you win. This is the same with trading distressed debt. Even if you win one out of four times with this approach, the winning occasion more than pays for the three losses. Plus, if you pay to see the flop and thereafter realize that you have little chance of winning, you can fold, and limit your losses. But if you think you have a chance to surprise everyone and steal a huge pot, fucking do it.

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