Guest Post – The University in the Desert

If you own any of these books, you’re in the 99.9%.


It’s as rare as a Venezuelan gold medal – a guest post that meets all our guidelines. Today we welcome W from Off-Road Finance, a regular contributor to the Carnival of Wealth and one of the few personal finance bloggers who has anything interesting to say. No further introduction needed:

I’m lost and have gone to look for myself. If I should get back before I return, please ask me to wait.
note on a university message board

Somewhere along the way we change from relatively useless and undifferentiated kids into adults. We become someone. If you happen to be around a person you’re not likely to offend, do a little experiment: ask them to describe who they are. Chances are you’ll get a list of descriptions: for example, I’m a husband, engineer, trader, Christian, musician, blogger, cook and rock climber. From that list you could get a reasonable picture of how I spend my hours in a week.

But let me suggest something: you know almost nothing about me, as a person, by reading that list. There’s too much there. Am I a mad rock climber who trades and takes the occasional engineering gig to keep myself in rock shoes and gas for my Wrangler? No. I’m kind of a half-assed climber. You could turn my description around, make any given element primary, and generate a bunch of different “people” who would bear little resemblance to one another or me. Let me suggest a much better question than who you are:

What mind do you bring to the problem? This is one of those deep Zen questions. When faced with an arbitrary problem, do you use the mind of a rock climber? That of a musician? Clearly they have different approaches to problems, and not just those that fall in their respective fields. You’d expect differences in approach on everything from risk to creativity.

Different minds. This gets around the problem of multiple descriptors and closes in on who someone really is. Some minds are better at some things than others. The rock climbing mind is fine for hang gliding too. It might not be so good for knitting. I’d bet that the best knitters do not have rock climber minds. That’s not just a figure of speech – I’d wager meaningful money on it. Why?

Because the mind I bring to almost every problem by default is the mind of a gambler. In this, I am unusual. Millions of Americans gamble in some fashion. But essentially none of them have the mind of a gambler, any more than most Porsche owners are GT2 drivers. For the bulk of people gambling is a diversion, a form of entertainment, or an addiction; but it isn’t their way of thinking. I’d guess only a few hundred, perhaps a few thousand, Americans are of the gambling mind. I’ll call these people pro gamblers. That doesn’t mean they make their living by gambling necessarily. (Many, including me, don’t.) Rather, it means they’re mentally equipped to do so. There’s a wide gulf between the pros and those punters at the slot machines in Vegas casinos.

For starters, the pros are interested in the few games at which it’s possible to profit via skill. That means poker, sports betting, and some forms of blackjack. There are also a few good but nearly dead games that crop up – gin, backgammon, dominoes etc. Just as notable is what’s not on the list: slots, craps, roulette, baccarat, any table game other than blackjack, and of course keno (the game with the worst odds in the casino). The pros have all put substantial effort into learning to play at least one of the “good” games. While doing so, the pros develop the gambling mindset. It’s easy to recognize when I meet another pro, but hard to describe. Some of the characteristics:

  • a keen sense of the dollar value and odds associated with various gambling decisions
  • a tendency to view most decisions outside the gambling realm as gambling decisions
  • relative indifference to money
  • intelligence & fast mental math (not that gambling makes you intelligent – rather, stupid people will inevitably fail)
  • a desire to achieve a very high level of skill at their chosen game(s)
  • a strong individualist streak
  • an innate suspicion that others don’t have your best interests at heart. This translates, in most cases, to near-immunity to scams and cons
  • a fierce competitive streak
  • what I’ll call “exploitative empathy” – the ability to get inside other people’s heads, understand whether their position is weak or strong, and use that information
  • contempt for stupidity
  • a weird mix of targeted mental productivity and laziness – it’s a hard way to make an easy living
  • a dry, sarcastic, deadpan sense of humor.

I learned the gambling mindset around the poker table, first in college and then in Las Vegas. A couple of times a year I fly back to Vegas, now with my wife in tow. It’s one of those salmon-returning-to-the-spawning-grounds sort of things.* Spend a little time sitting at the table with the scumbags shooting the breeze about sports, and then taking their money. Plus, the drinks are free. Ahh, that’s the life 🙂

The most recent of these trips was last month. I usually go on the 4th of July week, plus another random long weekend. At the risk of tooting my own horn, the gambling mindset is one of, if not the best, for operating in the financial world. It’s not great for everything – I’ll give an example – but when it comes to making money I don’t think anything comes close. Those first two bullets equate to a better understanding of risk and reward than any other mindset I can think of.

Apparently I’m not the only one who thinks this, because for the last decade major financial institutions have quietly recruited pro gamblers for their top trading desks. Of course that’s not the sort of thing the institutions want to tell Congress or regulators about, but then the SEC wouldn’t know a gambler if they saw one. (The SEC has the bureaucrat mind, in spades).

There’s a cost that goes with the gambler mindset. It’s hard on personal relationships, especially romantic ones. Who wants to date or marry a suspicious, exploitatively empathic person who views your relationship as a gamble? Apparently at least one person, because I’m still happily married.

I do have to tone down my gambler tendencies when dealing with people I like. So now I’m going to make an odd recommendation. The CYC principals said they didn’t mind if I wrote for a tiny audience, so now I’m going to speak to .1% of the people reading this. If you recognize a bit of yourself in my description of the gambling mindset, are young, and haven’t decided what to do with your life, take a reasonable fraction of your net worth and fly to Vegas. Enroll in that great university in the desert. Learn to beat one of the “good” games above (I suggest poker for starters.)

For 99.9% of the population, this would be a retard move. For the other .1%, it’s the only smart move. Not that you should stay a gambler. Just learn the mindset, and leave when the time seems right. You’ll be way ahead of the game for life. Meanwhile, the former money of a bunch of crappy Bellagio 20-40 and 40-80 players will be flying the wife and me to Hawai’i next month. There are tangible benefits to this gambling thing.


*Ed. note: W does not return to Vegas to lay eggs and then die. runs on the Genesis Framework

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