Business Lessons from Blackjack --Part 1

So as I’m seeing red across the cryptoverse over the past couple of weeks, coupled with the barrage of terrified, “should I sell??” messages from some recently-invested friends, co-workers, and the mail man, I figured that now was as good a time as ever to tell a story. This is part 1 of probably 3, because it’s too long for one post imo.

As I indicated in my intro post, one of the more interesting aspects of my life involved some time spent as an Advantage Player (AP). Simply put, Advantage Playing (or Advantage Gambling) refers to legal methods, in contrast to cheating in casinos, used to gain an advantage while gambling. For a more detailed description, 888 Casino Blog offers this description:

Advantage play is the act of legally exploiting procedural or structural weaknesses in some aspect of casino games or operations in a way that generates an edge over the casino. Advantage players (APs) play table games, side bets, slot machines and video poker. They take advantage of promotions, loss rebates, casino hosts and marketing. They look for casinos that misunderstand or have incorrectly implemented the rules of new games. They seek out dealers who are error prone. They manipulate the elements of games to create situations where errors are more likely to occur. They disassemble automatic shufflers and exploit the most subtle of weaknesses. They find casinos that use cards with minor defects in their designs and exploit these irregularities. They operate alone and in teams. They relentlessly scout. They are well-funded with huge bankrolls. They communicate efficiently. They will travel anywhere at any time.

Unlike the description, I did not start out my AP/Card Counting career “well-funded with huge bankrolls”. At all. In fact, technically I shouldn’t have even been operating the levels I did, but that’s for another story. Basically, I started with a very minimal investment and grew it into something that ended up influencing every future investment I have done since. I’ll make another post about my adventures as an AP, but what I can tell you now is that it had long, unpredictable hours. A lot of travel. A lot of sleepless nights. A lot of inquiries from my friends about whether or not I was a drug dealer (I wasn’t), and more disappointing moments than I can remember. In short, it was a grind…and shy of a few epic nights, it’s nothing like the movies.

Despite all of that, the AP life taught me some valuable lessons about money, investing, and how to maintain a clear head despite the emotions that try to take over. In some form or fashion, I have applied these learnings to every business venture I’ve done since then. For everyone here on Steemit, I’ve decided to share part 1 of my rough notes that I wrote on the subject:

• Make calculated, logical business choices.

AP is about exploiting advantages, mathematically or otherwise. When you make an investment, your due diligence should be thorough and anticipate all possible outcomes. This will help you form your strategy, which should only be adjusted with sound business sense—not emotion. With crypto, make it a point to see beyond all the hype and exponential percentage increases. Research everything you can about what you're looking to invest in, and always use multiple sources to gain the full context. As always, you shouldn't invest what you can't afford to lose.

• Don’t let emotions get the best of you/keep a clear head.

As an AP, it’s extremely easy to fall into the thrill of those huge wins (look up a movie about blackjack that I refuse to name here). Same with the losses. When you see your chips disappearing round after round, even the strongest players feel that sinking pit in their stomach. Know yourself, and never underestimate how powerful emotions like greed and fear can be.

This can clearly apply to crypto, as many who are new to it are learning the words “FUD” and “panic sell” the hard way. If you bought to hold, then follow that strategy unless a business case is made that you should not (a catastrophic event that would justify a sell, a better opportunity emerges, etc.) Ask yourself if you are investing in something out of greed alone, or if you have good reason to take a calculated risk based on research and reasonable future potential. Conversely, ask yourself if you’re selling something because you’re afraid of an unknown outcome (“I should sell now before it dips any lower”).

• Respect money.

When I first started AP, I didn’t realize how easy it was to get consumed in the joys of positive variance (basically when the cards work in your favor and you win). I had an extremely good run over a few weeks, and like the movies would depict…I did not necessarily spend that money wisely. I was young, had never made so much money in my life, and nowhere near that quickly. I partied with models and other celebrities, bought stupid shit (like the pair of Bvlgari sunglasses that I’ve only kept as a reminder of what NOT to do with earnings), and definitely spent above my means because it felt like I was invincible. Think of Wolf of Wall Street and you’ll get an idea of how I regarded the money I was making at the time.

That all changed in literally one night (and the next afternoon), where I quickly learned to respect the fact that you can lose money faster than you can make it. After that, rather than splurging after a successful run, I found better ways to invest my earnings (real estate, new ventures, etc.) and it definitely paid off. Rather than variance, I now make the majority of my money from a consistent stream of income across multiple sources. It has served as a launch pad for any future endeavors I may wish to undertake. It also pays the bills, which is nice too.

A lot of people have been attracted to the exponential increases in Crypto over the past few months. Many have even talked to me about how it’s “easy money” and simply throwing money at low-valued altcoins will probably yield thousands of dollars in no time. Some people I know have already cashed out some of their gains, splurged, and are getting back into it expecting a rinse and repeat situation.

For obvious reasons, this is not a good idea. If you followed the first point I wrote, you’ll do your due diligence on any crypto you plan to invest in; weighing all the pros and cons objectively in order to make a good business case for your investment. Once you do that, following the second point will guide you through the variance you’ll experience in crypto; some days will be great, some days will suck. You have to have strong hands and stick with the plan regardless of how the price is moving, and only adjust when there is a good business case to do so. Then there's the third point of not taking your gains for granted, keeping in mind a point I'll discuss later: you haven't actually made any money until it's in your pocket. Be smart with what you do earn with crypto, and put it into something that will elevate your financial health…

...and that’s not likely to be a Lamborghini (tempting as that may be).

Okay, well that all I got for part 1! Thank you for taking the time to read this, and if you found it enjoyable or useful in any way please like and upvote! I'm looking forward to posting the next part of this, and hope you all have a great--and successful--week!

Take care,
-kfx