Gambling and assessing risk versus reward....

I thought the discussion below about gambling and success was quite interesting....

Is there a relation between gambling and success?

I once read a book about how to win at social poker.... That is, the kind of occasion where you might get together with some friends on a regular basis for a night of friendly poker....

Anyhow, I don't gamble, but I nevertheless find gambling very interesting. This book talked about several types of gamblers....

One type of gambler was the social gambler. They just like getting together with friends, and gambling was just the excuse for a social gathering.....

Another type of gambler is the person who's in it for the excitement. They get a real adrenalin rush when they gamble. Perhaps it's the sense of danger, that you could win a lot or lose a lot which drives them to gamble. (I bet a lot of people who become addicted to gambling are these types....)

Another type of person is driven by ego. They like to show off, and gambling is one method they use to try to do so.... They like to make out like they are very professional at gambling, but in reality they may not be.... It's mostly an act.

And another type is the type who gambles to win. They don't enjoy gambling unless they win. These are the kinds who may go on to become professional gamblers.... They tend to choose gambling games where there is some skill involved, like poker or blackjack, and would be more likely to shun gambling games where it is pure chance, like the video poker machines....

(Stay with me.... There IS a point.)

Anyhow, another thing I've read is that in the book "How to be a Billionaire," the author, Martin S. Fridson speculates that there could be a connection between big success and gambling.... Here's what he writes:

On the specific issue of risk, the billionaires' interest in card games, particularly poker, is striking. During the cotton-planting days, before entering the oil business, H. L. Hunt was compelled to support his family with his poker winnings after losing two consecutive crops to floods. As an undergraduate at Columbia University, John Kluge's obsession with the game attracted unwelcome attention from the administration. By graduation in 1937, Kluge had accumulated $7,000 in winnings, equivalent to $80,000 in 1999 purchasing power.

Bill Gates, too, devoted a great deal of his time at college to playing poker before dropping out of Harvard. Carl Icahn raised his first investment stake by clearing $4,000 playing poker during six months of active duty in the United States Army, a stint that followed his graduation from Princeton. Similarly, poker winnings helped to bankroll Kirk Kerkorian's launch of a charter airline that he ultimately parlayed into a billion-dollar fortune. Warren Buffett's fraternity brothers at the Wharton School of the University of Pennsylvania remember him chiefly for playing bridge. He became proficient enough to play on the Corporate America team, a group of chief executive officers that took on such opponents as a team composed of members of the British Parliament.

(From "How To Be A Billionaire" by Martin S. Fridson, p. 21, published by John Wiley and Sons, 2000.)

Whether there really is a link or not, I don't know.... But if it is true, perhaps the recognition of the different types of gamblers might give us a clue.

I suspect it is the types who gamble to win who might go on to become big successes in business too.... NOT the other types of gamblers. And especially not the "problem gamblers" who just do it for the excitement....

So, maybe both "sides" are in a sense right. Problem gamblers rarely go on to become millionaires (and if they do, they tend to gamble it away). However, those who gamble to win, and have a mind for the skill involved in certain types of gambling, may go on to big success.... The connection could be that, through careful UNEMOTIONAL gambling, they have learned the skills they need to assess risk versus reward....

Any thoughts on this?

- Dien Rice