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The Poker Analogy


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Just wanted to take a moment to expound on an interesting analogy that was made in another thread about poker.  Credit to @Spekul8 for smartly making a very apt metaphor that I think deserves its own thread.

Just a bit of background, I am a somewhat avid online poker player as a hobby in my downtime (read: I have a full time real job).  Ironically, online poker has provided the only real life use case for BTC that I have utilized, as this is the easiest way to get money in and out of poker sites for US players.  (For our international friends, the US has a silly law that allows you to play poker in casinos but not online, at least for most states).

Anyway, the analogy was made of holding a pair of aces (pocket aces) in Texas Holdem.  At this point, before the flop (when the first 3 community cards are dealt), you know unequivocally that you hold the best hand.  This is a mathematical truth and thus you can feel very confident about betting aggressively.  In the example that was given, however, the first 3 cards came out Queen, Jack and Two.  It was suggested at this point that your aces are no longer any good and that you would be making a foolish error to continue betting.  This is where the analogy starts to become more applicable to our current situation.

Mathematically, you are still highly likely to have the best hand.  In fact, if you are smart, you are praying that one of your opponents holds AQ or AJ and will stick around long enough to pay you off with a nice pot win.  However, doubt can creep in at this point because the flop didn't explicitly HELP you.  Maybe one of your opponents has QJ... maybe J2... maybe QQ.  You could allow fear of the worst case scenario to scare you out of acting on what is mathematically still a very favorable hand.

The point is that it can be very difficult to continue to be confident in something when doubt sets in.  It would be easy to play the above hand with great confidence if the flop came 2 J A, giving you three of a kind (a "set" in poker parlance), but this rarely happens.  Instead, you have to understand mathematically the odds of winning are in your favor with the top pair and play accordingly until you get firm evidence to the contrary.  This directly applies to our situation.  I think we all got into XRP because we believed it was the best cryptoasset, but we haven't flopped our proverbial "set" yet and thus it is easy to doubt.  But all of the news, objectively, is positive.  XRP WILL be used in large quantities, this is certain, at least by Moneygram.  Ripple and the other companies that are championing XRP continue to work to build on existing use cases and find new ones.  We are backing the most professional team in the crypto space. 

Nothing is guaranteed, risk is everywhere, but the potential is almost limitless.  I think we are holding pocket aces.

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Yeah, agreed. In poker and investing you have to remain unemotional. 

You have to "play the odds" and make the decision that is best, knowing that you might lose in the short term. 

It's consistently making the right choices over a long period of time that eventually equate to success. 

Expecting an investment to take off immediately is unreasonable. I'm sure most of Warren Buffet's investments took years to show significant gains. 

You have to hold knowing the underlying value is there. That is normal for any good investment. 

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3 hours ago, Molten said:

In fact, if you are smart, you are praying that one of your opponents holds AQ or AJ and will stick around long enough to pay you off with a nice pot win. 

While I appreciate the analogy, the fact is Team Ripple & The Whales (our opponents in your scenario) are known to have the upper hand. As smart as we want to be doesn't change the fact that they collectively have leverage and a high degree of control over price movements while also being aware of everything happening behind the scenes... This in itself gives them even greater leverage, and like traditional stock investing, main street investors (us) are the last to know. 

We're still in the wild west. 

 

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Ripple is definitely not our opponent in this analogy.  In fact, they are the ace in the hole.

The point I was trying to illustrate with the analogy is that its can be easy to let fear and irrationality take over when you aren't getting constant positive reinforcement.  In our case, the news has been good but the price hasn't followed and this seems to have truly rattled a lot of people.  Nothing bad has happened recently, just the price went down a bit.  That's it, that's all.

And just an aside... every big run up in XRP has occurred when the XRP/BTC pair fell down to levels very similar to where we are now.  If you want to see a freakishly similar pattern, just look at the graph:

 

What's missing from this?  Oh right, the big giant speak at the end of each cycle.

image.png

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1 minute ago, Babelly said:

the question remains,  is the deck stacked against us?

Most assuredly yes, from the standpoint of manipulation and such; that doesn't mean there isn't a possibility of great success.

If you are not a mythical "whale", then your two most viable options are either to HODL or FODL (fold).

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7 minutes ago, Molten said:

Most assuredly yes, from the standpoint of manipulation and such; that doesn't mean there isn't a possibility of great success.

If you are not a mythical "whale", then your two most viable options are either to HODL or FODL (fold).

hard to FODL when your all in haha........ but i hear you and only time will tell if our investment was in fact pocket aces or duece seven off suit

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8 minutes ago, Milly238 said:

What price do you think that next shoot up will reach to?

Oh, I'm not one of those people who know such things.  All I know is that when it happens, I'll be watching CNBC and listening to the people around me and when I start hearing all the folks who were never invested in crypto blabbing about the new alt they just bought, I'll probably lighten my load a bit.  I will never sell the majority of my holdings until the proceeds are life changing.  So its literally boom or bust for me.

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29 minutes ago, Molten said:

Ripple is definitely not our opponent in this analogy.  In fact, they are the ace in the hole.

How is Ripple not the opponent? In your analogy, Ripple/exchanges are the ones with the upper hand, not us. Do you not find it odd that David Schwartz some how sold a % of his holdings at the perfect time? I'm not accusing him of anything, but he has an awareness that 99% of us do not (ie. unreleased partnerships, regulation progress we're unaware of, etc). 

Brad has also mentioned numerous times that "retail speculators" (us) are a group he's not concerned / focused on. Inside info + multiple (if not all) exchanges who engage in wash trading + whale groups largely dictating market activity = an unlevel playing field.

Let's be real - we're apart of something that's largely unrealized by the majority of people in the world. Many of us in theory can do well (and have already), just by being apart of something from the beginning. But I'm also a realist and despite what anyone says, we're only making money when someone is buying from us at a higher price. 

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11 minutes ago, zerocool said:

How is Ripple not the opponent? In your analogy, Ripple/exchanges are the ones with the upper hand, not us. Do you not find it odd that David Schwartz some how sold a % of his holdings at the perfect time? I'm not accusing him of anything, but he has an awareness that 99% of us do not (ie. unreleased partnerships, regulation progress we're unaware of, etc). 

Brad has also mentioned numerous times that "retail speculators" (us) are a group he's not concerned / focused on. Inside info + multiple (if not all) exchanges who engage in wash trading + whale groups largely dictating market activity = an unlevel playing field.

Let's be real - we're apart of something that's largely unrealized by the majority of people in the world. Many of us in theory can do well (and have already), just by being apart of something from the beginning. But I'm also a realist and despite what anyone says, we're only making money when someone is buying from us at a higher price. 

How can someone or something be labelled as your "opponent" when your success is so intimately tied to their success?  I'm not denying that they have knowledge that we do not, of course they do, but that doesn't automatically make them the antagonist.  We have little hope at achieving success in this investment without utility, which is completely tied to the success or failure of Ripple the company.  Feel free to be upset about it, or dump whatever holdings you have, but if you hold XRP, you should be rooting for Ripple.

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