High Yield Investments
published on 01/24/06 at 8:12 pm
[The following excerpt concerning High Yield Investments is from John "The Greek" Leontakianakos' new book , This Game of Ours, copyright 2005.]
From the above title one would wonder what this section is doing in a book on Poker. Well, I will explain. Earlier on in the book I talk about how Poker has been a very powerful business tool and how I treat most decisions in life as I would a hand of cards. It is clear to all that know this game how Life mimics Poker. But, every now and again, Poker mimics life.
When I first started in Investment Banking I would get a call from my friends telling me about the last great stock they had just invested in. My question to them is why? They think for a minute and respond that they believe it is going to increase in value. My next question is how much are they willing to gain or loose on the investment? Very few of them are ever prepared to answer that question. The truth of the mater is before anyone decides to risk their money on a stock they need to know three things. 1) How much am I willing to lose. 2) How much do I want to gain; and 3) How long will I leave my money idle in this investment. In Poker it is equally important that one assesses what their maximum gain and maximum loss in any hand should be prior to acting. Let’s look at three general examples as to how one can maximize on their investment.
1) The Bluff
In this case you have decided to take a very weak hand and make a play at the pot. Hopefully, you will take down the blinds and antes without a fight. So we know we are willing to risk at least our initial bet. Next question is one you should ask every time you think of even looking at your chip stack. Will your bet sustain a raise, or your raise a re-raise? The answer in this example is NO. You bet out and get one caller. Not what you wanted, now the two of you go to the flop. If you got lucky and hit the flop go ahead and bet out as usual. If you missed the flop ask yourself if your opponent may have missed the flop as well. If you believe that he may have also missed it then come out with a continuation bet of about 1/2X-1X the pot. If you get a call or a raise you are probably dead in the water and consider this the appropriate time to cut your losses.
2) Mediocre Hands
You have are holding a J, 10 suited. Depending on position and other player’s actions, a playable hand. You want to bet out with this hand as you would with any other quality hand if you are first to act. If not, you may want to follow along. If you are the first to act ask yourself if your bet will stand a raise, and if so, of how much? This is a great hand to see a flop with. This is the type of hand you could double up with if you hit the flop right. The rest is easy. You missed, you’re out. You hit, bet away as you would in any other situation when you are ahead.
3) A Monster
Everyone’s favorite hands. You are holding pocket Aces. How nice. You want to lead out and risk a good amount of chips if first to act (4-6X the BB, mix it up a bit). If someone beats you in the pot and you could isolate this player do so without scaring him away. Now, from a hand like this you want to accumulate as many chips as possible, double up if possible. Now think back to your High School science class and remember the laws of physics. To every action there is a reaction. You cannot double up with out being willing to go broke so your maximum gain is 100% as is your risk. So, fire away and good luck. You are a huge favorite heads up, but your Aces still need to hold up at the end of the day.
Implementing this thought strategy when considering starting hands is a good way to identify your goals in the hand as well as enable you to avoid making emotional decisions that will cause you to deviate away from the disciplined approach that is required for a quality player to be successful. So go ahead and take a page from your financial advisor’s playbook. It will only help you in the long run.
John “The Greek” Leontakianakos is a professional poker player with 27 years of experience. He is currently in the process of publishing a book on poker and runs his own website called JohnTheGreekPoker.
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Administrator
Jan 25th, 2006
Is there a percentage of bluffs a player should attempt?
John The Greek
Jan 25th, 2006
There is no set % of anything. The situation will dictate. Just to give you a few quick examples: At the begining of a tournament everyone plays pretty tight. This is a good time to pick off some pots as no one wants to go broke in the first couple of hours. Another great time to bluff is when everyone is on the bubble just before making the money. No one wants to bust out on the bubble, thus, you would be shocked as to what hands they are willing to lay down.
In a cash game, one has to “earn” their bluffs. Play some qualitity hands and start out tight. If you show down hands, make sure you have the nuts. People will be alot less likely to call your bluffs when have shown quality hands, especially when you bluff from early position. Everyone expects a bluff from the button, very few expect one from you when you are first to act.
Grinder
Jan 26th, 2006
I think bluffing is more of an art form that can not be taught but learned through experience and trial and error.
That’s why it is skimmed over in most books.
The cash game or ring game I agree – it all depends on YOUR table image.
I stole a pot last month with 83o LOL – I was pretty much done bluffing once THAT was shown down!