Friday, March 25, 2016

The New Rules of the Game

My foster Dad, may he rest in peace, was a simple man.  He was born to a farming family in 1921 and grew up in the Midwest, where young men idolized John Wayne, who said little but did much.  I am grateful to him for many things, especially that from a young age he taught me to play blackjack.  It's a simple game, but difficult to master.  So is life.  Throughout my life, blackjack rules have been a useful metaphor for many situations.

1) Know the Numbers...
Dad's first lesson when I was 9 or 10 was to hand me Hoyle's book on Blackjack play and strategy and have me read it.  I asked him when I could get to hold the cards and play, and he told me calmly "when you can recite the stand/hit table without looking, you are ready to start learning by playing."   The stand/hit table shows the statistically best decisions to make depending on what's in your hand and what the dealer is showing as a top card.  Without knowing this, you are basically just guessing and relying on luck rather than leveraging the advantages of probability.  Dad was impressing on me the need to understand the basic rules of every game inherently and not to take any risk before feeling confident in them.  He knew it was important to understand the numbers that underpin the important decisions of the game.  This has helped throughout my life and career.

2)...But Trust your Instincts
The rules are very important as a starting point, of course, but they are not the whole story.  Every time you sit down to play, there are different people at the table, and you may not always sit in the same spot.  1:1 (1 player versus dealer) is a very different game from a full table, where the flavor of the hand can be influenced by the first and last players in the dealing rotation.  There are times when your instinct tells you to go against the rules, and you should trust your instincts.  My Dad was careful to emphasize that you should only trust your instincts when you fully understand the rules and the risks of what you are doing - not before.

3) The 12 that wins is better than the 20 that loses
A strong hand looks cool and is impressive to the rest of the table, especially when you make it the hard way by hitting a weak hand safely.  However, that strategy is rooted in ego and often dangerous and destructive.  Going Bust (hitting your hand and getting more than 21, in which case you lose immediately) is an ever-present risk in Blackjack.  Very often it is better to let someone else, especially the dealer, hit their hand and bust rather than risking it yourself.  A hand of 12 that wins still pays the same as a 20 hand that wins.  This is an important concept because it reinforces the understanding that risks don't always need to be taken (and not always by yourself).

4) The rules can vary by situation.  Check carefully before assuming anything
The original game of blackjack was played with a single deck.  Nowadays it is hard to find a table that plays using only 1 deck.  Most deal from a multi-deck shoe, and many shuffle automatically as well.  This prevents people from potentially counting cards.  In addition, many casinos have "house rules" such as different minimum/maximum bets, limiting double downs/splits, offering surrenders, or letting other players bet on your hand.  Since these can materially affect the outcome of the game, it is wise to check the rules of every table before playing. NEVER assume all rules are the same without verifying it yourself BEFORE you play.  In the business world this is also true.  Companies in the same industry are often very, very different in terms of corporate culture, objectives, and business strategy.  Check everything carefully BEFORE playing.

5) Know the High Percentage "Power Hands" and use them wisely
In blackjack there are a few "power hands" which allow a player to increase their bet after the initial hand is dealt.  Specifically, these include splits and double downs, especially when you are dealt two cards which equal 11 or when the dealer shows a light top card (6 or below).  Taking advantage of these opportunities can change the outcome of the session, and success is often determined primarily by how well a player does on the power hands.  In life, too, it is important to know the times when it is advantageous to take a bit more risk for a bit better payoff.

6) You Can Lose a Majority of the Hands and Still Win
This one threw me for a long time.  Statistically, you will always lose at blackjack, since the rules slightly favor the house over the player.  That said, my Dad was careful to point out that you can lose a majority of the hands and still make a lot of money.  How??  Simply, if you win on hands where you have a larger bet, then you can lose greater than 50% and still make money.  The key to success in blackjack is RISK MANAGEMENT.  Sound familiar?

7) Don't Become Complacent, Especially When You Are Losing
Many, many times I have seen a player endure an insufferably long bad run.  This is characterized by hand after hand of bad hits, the dealer making tough hands, and in general just losing many hands in a row.  A bad run like that can wipe a player out quickly, and I have even seen players increase their bets to try and "win themselves out of a losing position" (also a psychological phenomenon among pro traders).  In general, this is a poor strategy.  It is far, far better to learn to recognize a bad pattern early, and then do something about it, such as switching tables or taking a break.  In my case, when I lose more than 2-3 hands in a row, I cut back my bets to the table minimum and observe if the pattern continues.  If so, I am likely to quit the table and go somewhere else or do something else.

This is harder than it sounds, since many players "drop anchor" at a table and are unwilling to walk away, even when they are getting crushed by a lengthy bad run.  The wrong chair at a blackjack table can be a very expensive place to sit.

In life as well, it is very important to recognize bad patterns and do something about them early, which may include "changing tables" or "taking a break".

8) Winning Is Easy.  If it isn't you are at the wrong table
One of the most important things my Dad told me about blackjack was how easy it is when you are winning.  On a good streak, it feels like you are doing almost nothing at all and drawing those 20s and blackjacks, hitting split 8s and 9s and double downs every time.  The dealer is busting on every hand and the chips are literally flying in.  By contrast, during a bad streak it often feels like there is nothing you can do to win even a single hand.  Ride the winning streaks, folks.  If you can't see any for a while, it is possible you are at the wrong table (refer to 7 above).

9) Be Social.  It's just a Game after all
Since my Dad played every day, everyone knew him.  Everywhere we went, everybody from the doorman to the dealers to the pit boss to the guy sweeping the floor would say "Hi Charlie".  Dad would be sociable with everyone and looked at blackjack as more of a social endeavor than a get rich quick scheme.  He was never bitter or angry even when he lost money.  When he won, he always shared with the dealer and always tipped well, even when he lost.  From him I learned not to take things too seriously, and to work hard to develop rapport with the people I meet.  Life is a journey and it is better traveled together.  Try not to take things to seriously.  Take time to be part of the social fabric around you.  Try not to get angry and try not to let money be the primary objective of your life.  It is far better to focus on having good relationships.

My Dad loved playing blackjack.  He had a routine, a system, and I am so grateful he shared it with me.  By no measure am I the world's best blackjack player, and that's just fine with me.  In my life, I try to have as much fun as I can and to enjoy the experience.  I have played blackjack in the US, in Korea, Macau, Australia, Nepal and and other places, too.  I have met some wonderful people and had some great times. In my life I have traveled a lot, met incredible people, and had a fantastic adventure.  It's not over yet.

I hope you will do the same in blackjack and in life.  GO ALL IN!

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