Bales Goes Deep: Donald Trump and the Qualities of a GPP Player
Originally published November 9th, 2015.
Earlier this year, I made a bet with a friend that Donald Trump would become the next president of our fine country. This is a fairly wealthy buddy, so he was fine giving me 150-to-1 odds on a $500 bet, i.e. I will owe him $500 if Trump loses, but I’ll be $75k richer if Trump wins the election.
I don’t think Donald Trump would be a good president. Do I want him to win the election? Um, yeah, now I do. I will sell out for $75,000, sure.
However, I never thought Trump would actually win the election, nor do I even think that now. I just thought he was a much better bet than 150-to-1. I believed people were underestimating how “antifragile” he really is; whereas other candidates can be dramatically harmed by a single piece of negative information, pretty much everything said about Trump, good or bad, helps him. Oh, Trump is a freaking lunatic? Yeah, we already knew that.
Trump is currently right around 6-to-1 to win the election. I think he’s probably closer to 10-to-1 in reality, which is more or less where I thought he was when I took the bet. So I believe there’s roughly a 10 percent chance of Trump becoming president, whereas the break-even point for the bet I made was just 0.67 percent. If Trump’s probability of becoming president is indeed around 1-in-10, I would make a ton of money if we could play out this bet thousands of times. Maybe we can in parallel universes, who knows?
But here’s the thing: we can’t play out the bet more than once in this universe. So in all likelihood, I’m going to lose $500. My expected value might be through the roof, but the most likely outcome is to lose money.
I think this is one of the problems with viewing decisions purely in terms of EV; yes, EV matters—and it matters a lot—but there needs to be some sort of adjusting for the probability of things actually happening. If I had only $500 to my name and made this bet thinking Trump was 75-to-1, would that have been smart? EV says yes, but in reality, I’d argue no because I’d go broke over 98 percent of the time.
If you’re betting on low-frequency events with any sort of regularity, you need to be very mindful of your risk of ruin and how you can overcome inevitable long stretches of losing. Investor and author Nassim Nicholas Taleb has summed up his antifragile investment strategy as follows: “You have a very small probability of making money. But if you’re right, you’ll never see a public plane again.”
I like that. But to never see a public plane again, you have to stay in the game long enough to actually realize your edge. You have to balance EV with probabilities when you’re banking on outliers.
I do believe there is money to be made as a contrarian DFS player. But the entire idea of going against the grain means sometimes fading obvious values—the high-percentage plays—in favor of a lineup with a lower probability of cashing (but, hopefully, a higher chance of winning).
To give you an idea of what the life of a contrarian tournament player is like, consider that I took in over half of all the money I made this past MLB season in the first five days. It was a sick run and could have been a lot better, too. Shortly after that, I proceeded to lose money 15 days in a row. FIFTEEN DAYS!
So to say there are differences between cash-game players and GPP players is an understatement. And there are even a ton of differences in how “chalk” tournament players and contrarian players should approach the game.
As I was thinking about my Trump bet and how it relates to contrarian DFS play and low-frequency bets, I thought it would be cool to write down some characteristics I think are essential if you want to be an antifragile tournament player.
Conservative Money Management
Being contrarian is an aggressive style of play because you’re trying to take advantage of opponent mistakes in order to win GPPs—not just cash in them. It’s truly an all-or-nothing approach, which means the cash rate of contrarian players is typically lower than that for chalk players.
Because of that, contrarian players need to be careful with their bankrolls. Like I said, I lost money for 15 consecutive days at one point. If I were playing even what most consider a moderate percentage of my bankroll each day, I could have gone bankrupt during that period.
Whereas cash players can have 10 percent of their bankroll in play at any given time, I’d argue that number should be closer to 1 or 2 percent for contrarian GPP players.
In betting on low-frequency events, you have to get used to losing. Contrarian players lose money more often than they make it. That’s fine, because we’re not paid out in the frequency of our winnings, but you do need to be psychologically okay with losing money more often than you profit.
Antifragile players need to have confidence in their methods. When you stack the Twins over the Rockies in MLB or use a Blake Bortles/Allen Robinson combination in NFL, you’re not going to cash as frequently as the chalk. It can be tough to deal with during a cold streak; how can I lose every day for two weeks and still be confident what I’m doing is going to be profitable?
An Understanding of Public Perception
Since the idea behind antifragility is to benefit in the face of chaos—to profit when others do poorly—it is of course imperative to understand public opinion. Where will the crowd move, and where are they either wrong or overconfident?
Remember, we don’t need to out-predict everyone else; we just need to figure out where they’re overrating the likelihood of a specific events occurring. If Player X is in 40 percent of lineups but should be in 20 percent based on his value and Player Y is in 3 percent but should be in 10 percent, Player Y is the superior tournament play, even though Player X is the better value and more likely to increase your lineup’s point total.
We don’t win by maximizing points; we win by scoring more points than other players. Put yourself in a position to win by scoring as few points as necessary.
And don’t forget to #Vote4Trump in 2016!
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