A reasonable simplification of my process for finding guests is:
Find someone doing something weird,
Who has credibility in their domain,
And who spends their time looking for expected value.
Then once I find these people I ask them questions about their lives in risk, and I try to understand why they do what they do. I’ve said before that an implicit assumption is: when you find someone doing something uncommon, it’s worth paying attention. They probably didn’t just end up there, and they weren’t ushered into that life.
Also, if you listen to people talk about their motivations they say all sorts of things that extend beyond a worldview where all decisions are reduced to money.
This is perhaps especially ironic in gambling and the markets, because money is the key metric. It is the thing that, over time, determines whether you are +EV or -EV.
To illustrate what I’m talking about, here’s a clip from Spanky (Episode: Made in America) where he talks about what attracted him to sports betting.
Spanky - Beating the Unbeatable
Then if you listen to this clip from John Hempton (Episode: Zero, by Way of a Hundred) I think that you will hear some themes that overlap with Spanky’s comments. Hempton is a rich guy, he doesn’t need to scour the globe looking for fraudulent companies to short. And for a hedge fund manager there are many easier ways to attract capital than by shorting stocks. But he does it anyway.
John Hempton - The Money Makes No Difference
Erik Seidel (Episode: The Mayfair Revisited) is, by any measure, one of the most accomplished poker pros to ever play the game. But he’s also still playing the game at a very high level… in his sixties! Most of his contemporaries are retired or have become poker influencers. He keeps going because it’s still a challenge.
Erik Seidel - The High Level Challenge
One of the most interesting (and honest) comments came from Rufus Peabody (Episode: Greetings from Las Vegas). He said that he has always been at least in part motivated by recognition. He wanted to win at sports betting, and he also sought out ways for people to know that he’d done it. I say it’s one of the most honest responses because anyone appearing on one of our episodes is probably looking for some recognition. Rufus might have been the only guest to actually say it.
Rufus Peabody - Recognition
One objection I can imagine to the guest claims that they weren’t focused on the money is that these are all successful guys. Of course once you’ve made the money it’s not as important. Money is very important for people still trying to get it.
But we had an episode with Kai (Episode: The Game-like Aspect), who is early retired and is doing it in a way that doesn’t require a lot of money. He’s lean-FIRE retired, so he has to keep his expenses low. He is on this money-lite path because it allows him to scratch an itch. He likes the puzzle-solving aspect of what he does.
Kai - The Puzzle Aspect
We have had zero guests who are working their way up the corporate ladder at a Fortune 500 company. The most mainstream of our guests are essentially entrepreneurs, running small investment businesses. The least mainstream of our guests live in their cars and earn all their money from casinos.
Joe (Episode: The Road Warrior) said that the combination of freedom and the way that professional gambling creates its own momentum are important for him.
Joe - Forward Momentum
You may have heard this question meant to help people figure out what they want to do in life which goes: What would you do if you didn’t have to do anything?
Well Blair Hull (Episode: From Blackjack to Black Monday) doesn’t have to do anything. He sold his trading operation to Goldman Sachs for over $500 million. He could be sitting on a beach drinking Mai Tais. I ran into Blair a few months ago and we had a brief conversation. He told me how he has hired a number of PhDs to work on his ETF. Also in his episode he said he still writes code in R. Blair is in his 70s and he’s still coding.
Blair Hull - On Coding
The point of the above is not to say that our guests talked about how they found their lives in risk and then everything fell into place. It’s also not to say that money isn’t important, so just find your passion.
I don’t think that’s the takeaway.
In fact I think you can hear that these people have a real restlessness, and working on these puzzles acts as sort of a salve for that restlessness. Blair Hull and John Hempton have each attempted retirement, and they both ended up back in the market.
There’s also the issue that Houyi (Episode: The Road of Trials) talked about, which is that advantage play gave him money and some sense of satisfaction, but then he was left to wonder whether that was enough.
Houyi - Lack of Purpose in AP
In our episode about a team of advantage players titled “The Audacity of Hope” both Richard Munchkin and Darryl Purpose talked about gambling as a way to make money, which allowed them to pursue their passions. Munchkin had a career as a movie director and Darryl has been a singer/songwriter for decades. But even if they’re passionate about the arts, they are also very passionate about advantage play.
Richard Munchkin - The First Time I Retired from Gambling
Bill Ziemba passed away this year. He was featured in our episode titled “The Idea Man.”
Bill had an amazing life that included writing one of the most influential books on horse racing, and also publishing a lot of academic research about the stock market. He was also really into Turkish rugs. But Bill worked for very rich people. He didn’t come near to their success. And Bill also understood this. He understood that he didn’t have the quality that the billionaires had. The billionaires worked obsessively on one thing, and Bill liked to spend his time doing a lot of different things. He was ok with that. He lived the life he wanted.
Bill Ziemba - Never Get Bored
This all is really not meant to be some cheerleading about how money doesn’t matter. However, when we’re trying to understand the world, it does really help to be able to understand the range of motivations that people might have for what they do. That’s true if you’re trying to listen to successful risk takers, and learn from them. It’s also true in terms of navigating every day life.
John Reeder
Risk of Ruin Podcast