Barbara Connors

By Barbara Connors

I have long believed that there are some striking and instructive similarities between the world of poker and the world of finance, and in that spirit I want to introduce a famous character called Mr. Market. This character was invented by the late Benjamin Graham, widely regarded as the father of value investing. In his landmark book, The Intelligent Investor, Graham uses the concept of Mr. Market to illustrate how investors should approach the wild fluctuations of the stock market. He refers to Mr. Market as an emotionally unstable business partner, with an incurable case of manic-depression. On the days when he is elated, Mr. Market offers way too much money for your business. On the days when Mr. Market is despondent, he offers far too little.

by Barbara Connors

It’s no secret that poker players can be their own worst enemies. When we’re not calling too often with borderline junk, we’re shoving out too many raises in an effort to steamroll the opposition. Or folding too frequently in the face of such raises. We stubbornly keep on playing the game even when we’re fatigued or full-out on tilt. We play in stakes that are too high for our bankrolls, against opponents who are too advanced. And through all of this, we know perfectly well that we shouldn’t be doing it.

 This is hardly unique to poker players. Every dieter who eats a pint of Ben & Jerry’s, every shopaholic who goes on another spending binge, every procrastinator who invents another excuse to postpone getting a job done understands this feeling all too well. We know the behavior is bad for us. We know it’s going to cause problems in the future. And knowing this, we do it anyway.

by Barbara Connors

CORRECTION: I gave an example where you call to see a flop with A-7 suited, but you’re concerned an opponent may hold a bigger ace. I explained that if you could push that opponent out with a raise, the remaining aces would become good outs for you, and thus you would gain three more outs. Oops. Obviously if you have an ace, and your opponent has an ace, you would gain no more than two outs with that move. I had a good education so we can’t blame the school system. Mea culpa.

It’s one of the most famous axioms in poker: drawing hands play best against a large field of opponents. When you’re drawing to a big hand like a straight or a flush, you want lots of other players in the hand with you, so you’ll get paid off in case your draw hits. But in poker, where everything is situational, even the truisms are relative and this seemingly universal rule doesn’t always apply. There are times when you actually want to thin the field with a drawing hand. For example, when you have the opportunity to buy outs.

 Say you call to see a flop with A-7 of spades and the flop comes down J-8-3 with two spades. You have nine outs to the nut flush, which is pretty simple and straightforward, except that the flush is not the only draw you have going for you here. You could also hit one of the remaining three aces, which would give you top pair. Problem is, your top pair would be married to a mediocre kicker. If one of your opponents has a better ace, say ace-king or ace-queen, your three ace outs are tainted, because spiking an ace will only bring you heartache and an expensive second-best hand. But if you think a wellplaced raise can push this particular opponent out of the pot, you’re effectively buying three more outs for your hand, giving yourself a total of 12 good outs to win. But before you decide to push out that raise and buy yourself a few more outs, you need to look for certain conditions. First and foremost, you want a large pot. If the pot is still on the smallish side, those extra outs aren’t worth the price of your raise. When the prize you’re competing for is still just a piddling pile of chips, the extra equity you gain by giving yourself a few more outs is not worth the cost of putting in a raise. But when the pot is hefty because somebody raised preflop—as tends to be the case when one of your opponents holds a big ace—that’s a different story.

by Barbara Connors

 Arguing with a fool proves there are two —Doris M. Smith

 It’s a foolish mistake that happens all the time at the poker table. First, an experienced player bets to protect his hand. Then some know-nothing bonehead calls with a piece of garbage longshot that doesn’t even remotely have the odds to call in this spot. Not that the bonehead will ever know what a terrible play he made, because his miracle card falls on the river and he drags a huge pot. But that’s not the foolish mistake. No, the foolish mistake comes a moment later, as the bonehead is stacking his chips, and the experienced player can’t resist getting up on a soapbox and giving the bonehead a stern lecture about how wrong it was for him to make that call.

 Criticizing your opponents is foolish because the repercussions are almost universally bad for your long-term profitability. What happens when you tell an opponent how badly he is playing? Generally, one of the following: A) thanks to your instruction, the bonehead learns from his mistake and begins to play better, or B) he leaves the game altogether because it’s not relaxing and fun anymore, or else C) he gets seriously ticked off at you. The first two outcomes are terrible because they ultimately deprive you of the very thing your poker survival depends upon — a weak opponent. Only the third option has the potential to maybe work in your favor if you can put the bonehead on tilt.

by  Barbara Connors

"Boy, I got vision and the rest of the world wears bifocals" —Paul Newman in “Butch Cassidy and the Sundance Kid”

 Imagine a poker player who possesses infinite knowledge of the game. He knows all the plays and exactly when to use them, he has memorized the odds, and he can do complex calculations in the middle of a hand without missing a beat. But for all his vast expertise, this know-it-all player can still be undone by the most ignorant poker moron if said moron is impossible to read. When you find yourself up against opponents who don’t make the logical, thoughtful plays they “should” make — calling when they should fold, betting when they should check, raising when they should call — all the poker knowledge in the world won’t help you, unless you can find a way to read them. Problem is, the very fact you know so much more about the game than they do is precisely what makes these opponents so difficult to read.

by Barbara Connors

We all have our pet peeves about this game. One of mine happens when I’ve been getting nothing but junk hands for hours, and then I’m dealt something like 10-9 suited, or maybe a baby suited ace— something that’s just good enough to call. Full of eager anticipation at finally seeing a flop, my joy quickly turns to “Oh @#%# I have to fold again” when one of the players in front of me puts in a raise.

 In a case like this, the temptation to cold-call, that is to call for two bets when one has not yet put any money in the pot, can be very strong. I’ll confess that I have succumbed to this temptation from time to time. In this I have a lot of company, because cold-calling with inferior hands preflop is one of the most common mistakes in poker. It’s also one of the most ruinous.

by Barbara Connors

Few things can stirs up our emotions like having money on the line. Whether it’s in the stock market or at the poker table, fear and greed inevitably cloud our decisions. So it shouldn’t be surprising that many of the basic tenets of behavioral finance also apply to poker.

 One example is a phenomenon known as the sunk cost effect. In behavioral finance, this describes our tendency to cling tenaciously to anything we’ve already put a significant amount of money into. The classic example is an investor who refuses to sell stock of a company that has gone to the dogs, for example, if its product is becoming obsolete. The desire not to recognize a loss is so powerful that he will hold onto those shares as they continue to plummet. Hoping that maybe the price will rebound and he can get his money back. Not realizing he should just forget about his initial investment. That money is gone. It’s sunk. The only thing that matters is whether or not the company is a good investment now—in its current condition and at the current price.

by Barbara Connors

Suppose you call to see a flop with suited connectors, let’s say 8-9 of clubs. Of course something like 7c-10c-Jc would be your dream flop, though any kind of made straight or flush would be welcome. But suited connectors are generally looking to flop a draw — four to a flush, an open-ended straight draw, or the everpopular double-belly-buster. Failing that, hitting top pair on a ragged flop would be decent, or hitting trips on a flop like Q-8-8 would be even better. But on this particular occasion the flop comes down Q-9-8 giving you two pair. Bottom two pair.

 Bottom two is a funny hand. At first blush, it seems like a strong holding. And maybe it is. But that strength goes handin- hand with incredible vulnerability—made all the worse because two pair is difficult to get away from. This hand can win you a big pot, or it can make your entire stack disappear faster than you can say “counterfeited.” In his classic book, Super/System, Doyle Brunson said he’s gone broke more often with bottom two pair than with any other hand. But assuming that you aren’t facing off against too many opponents, you’re likely to be ahead on the flop. Conventional wisdom says to play bottom two pair fast on the flop, much as you would play top pair with a good kicker. One of the biggest mistakes players make with bottom two pair is to slowplay it on the flop, thinking this hand is some kind of a powerhouse. It’s not. You can’t afford to give lesser hands a free or cheap card to suck out.

by Barbara Connors

We all know the feeling. You’re dealt a pair of pocket kings, and then the flop comes down with the one card in all the world you didn’t want to see — the ace. For this discussion, we’ll assume an uncoordinated flop where the only visible danger is that lone ace staring up at you. So now what? A moment ago, your hand was almost invincible. Then one ace crashes the party and your kings are behind to any moron with a ragged A-X. For the player with kings, that ace on the flop represents a proverbial fork in the road: You can take the safe path of folding to any significant action, or you can venture down the more challenging road of playing the hand to its conclusion-- on the assumption that your adversary doesn’t have the bullet.

 To make this choice, you must answer two questions. The first and most obvious question is, does he have the ace? To determine if your K-K is now second-best, you’ve got to use all the information at your disposal to make your best educated guess as to whether or not your opponent holds the dreaded ace. But an equally important question is, what’s at stake here? How much do you stand to win (or lose) if your educated guess turns out to be wrong?

Barbara Connors

We’ve all heard the saying: Hindsight is 20/20—Which is just another way of saying that it’s easy to predict the future after it has already happened. Psychologists call this phenomenon the hindsight bias, also known as the I-knew-it-all-along syndrome. Whatever you call it, this bias influences us in subtle, but dangerous ways, especially at the poker table.

 For example, a crying call that’s immediately followed by an exclamation of, “I knew that’s what you had!” The details vary, but the basic story remains the same: An otherwise sane and knowledgeable poker player makes a call on the river, despite the fact he suspects his hand may be beaten. And when his opponent flips over the winning hand, our hero declares he knew all along his opponent held those exact cards. Though it’s clear he didn’t “know”—or else he never would have made the losing call in the first place.