Rule Number 1: Always keep your family financially secure

Intro

I've been trying different types of investments for 9 years now. I've had a few things go right and a lot of things go really, really wrong. I'm going to slowly add things that I think I've learned over that time in the next few days (or weeks). It's sort of an open letter to my son as well, so some of it will seem personalized. Let me know if I'm really far off on any of it...

Rule Number 1: Always keep your family financially secure

You need to be prepared for any events that happen. Don't go along thinking life will be spent drinking champagne at cotillions and deciding whether to take the Bentley or Rolls Royce. It won't. Bad things happen, and they can (and will) happen to you.

On top of that, when things go bad, it's almost never a situation in which it a good time to divest assets. For instance, if you lost your job, the job market will likely be atrocious.

Why is that, you ask?

It probably means that your industry (and likely entire economy) is in a downturn. You will be stuck trying to find a job in a very tough job market, and your company won't give you much more than 6 weeks severance because they can't afford to. If the economy is suffering, then the stock market and real estate markets are suffering because people are buying less stuff and have less salary to buy new homes. That means that if you've been buying and holding stocks, you now have to sell your assets at the worst possible time. If you are holding real estate, that portfolio has also dropped, and you will have to sell into a buyers market. If you don't have a lot of equity already, you may end up taking a loss on your investments just to have cash to eat.

Knowing that, you need to have at least 1 years living expense for you and your family in your savings account and CDs before making any other investments. I'm not talking about 1 year of normal life, but a years worth of tough, eating ramen noodles every day while searching for a job money.

Another thing I want to share may seem counter intuitive.

"The richer you become, the less money (as a proportion) that you should have in high risk assets like the stock market."

Starting from nothing and being 31, I'm 85% invested in risky assets for two reasons:
1. I'm not really risking the stability of my life, because I'm a well paid slave anyway.
2. Unless I am fully invested, then I'm not really making any money anyway. (10% of 50,000 is only $5,000)

As I age, however, I'll scale that back tremendously. As I approach retirement and the kid's college years, I'll go into safe assets to ensure that I hold on to the money to pay for them.

If you are successful enough to get rich, you've taken all of the risk necessary to achieve your goal. You can get rates that beat inflation on a money market account if you have a large enough amount of capital. Preserve your capital safely and continue to run your business or whatever vehicle has made your rich. At that point, real estate investing or investing in the stock market are simply bonuses, and they should probably only be 20-30% of your portfolio. If those areas happen to be your business, keep your personal exposure low and use other people's money to continue to finance your real estate or stock transactions.

Finally, I want to point out that keeping your family secure means keeping the money under your watchful eye. Hedge funds for super wealthy and similar structured vehicles are all cons. Most of the hedge fund managers can't beat the S&P. If that's true, then you're better off being in SPY. You can sell it when you want, and you don't have to worry about being ripped off or incurring a high tax bill as they churn stocks. It's not about what the in crowd is doing, but getting and maintaining wealth. The best person to do that is YOU!

Fantasy Football Wrap Up & Lessons Learned

The fantasy season ended last week in both money leagues, and I ended up 2nd in both. I feel like a bit of a failure for winning neither, but there is so much randomness that it's hard to really be that upset with the result. I ended up losing 63.58-61.15 in the Yahoo! league primarily because TB got torched by San Diego as an indication.

Before I get into the discussion, here are my lessons learned

Lesson 1: Don't underestimate quarterback. Draft one in the late first or early second round. Draft one as your first backup player. Draft one late in the draft with high potential. Getting a QB that averages 2-3 touchdowns a game is a key to the game. GET A HIGH SCORING QB!

Lesson 2: Don't over value wide receiver. You can get good/great ones in the middle rounds. The consensus top 4 receivers (1st/2nd round grades) were Randy Moss, Braylon Edwards, Reggie Wayne, and Terrell Owens. You wouldn't have been happy with any of those players. Anquan Boldin average 10.4 ppg, but the next 15 average between 8.4 and 6. Boldin was the only one worthy of a 1st or 2nd round pick based on average, but he missed 3 games. Get one after your stud QB and RB.

Lesson 3: In the running back by committe era, you can find a running back. Draft one high (1st or second) and pick up some decent guys in the 4 round or so in the draft. If you get lucky with the decent guys, you'll probably be fine. If not, just be quick on the waiver wire in the first few weeks. For example, Deangelo Williams (6th round), Thomas Jones (3rd), Michael Turner(4th), Matt Forte (6th), Steve Slaton, and Pierre Thomas were all top 10 running backs.

Lesson 4: If a guy looks bad and if his offense looks bad, don't trade for him. Transversely, ask for too much if you draft a flier and he starts off hot, it's likely to continue.

Lesson 5: It's okay to draft a defense in the next to the last round, but you'd better pick a second one sooner than later. Your object is to find one that has great playoff matchups and plays an attacking, blitz happy style... which leads me to

Lesson 6: Never play a defense based on the amount of points they will surrender. You need an attacking defense. Even the most putrid offense will score 14 points. Picking a mediocre defense against a soft match up is a recipe for disaster. You're better off playing the a good defense with a tough matchup, because they will get pressure.

Lesson 7: Tight End doesn't matter. They are inconsistent and are generally seperated by 2 points per game. If you don't get a top 2 tight end, then just wait until the 3rd to last round. You may be better off not even picking a top tight end, and just waiting until the 3rd to last round anyway.

Here were the key trades that occurred during the season. I got suckered in the Warner deal as it turns out, but I was trying to offload him before he had his 7 fumble, 5 interception game. If I'd know the NFC West would've been that terrible, I wouldn't have made the deal. I won the Torain deal because he got hurt and the Harrison/Stinko trade was a wash.

Trades:
Traded Kurt Warner for Braylon Edwards after week 2 (Fanball)
Traded Marvin Harrison for Ocho Stinko just for kicks (Fanball)
Traded Ryan Torain for DeSean Jackson (Yahoo!)

Fanball (12 team) notes: I had a hell of a draft in this league. Vernon Davis was really the only player who was an outright bust. I dropped David Garrard, Chris Perry, and Crayton for non performance, but they were all bench players anyway.

Other interesting things...I had a spell in which I signed and played Ryan Torain and Peyton Hillis as running back starters since Bush and Jackson were down...I dropped an re-added Heller...Matt Prater was my kicker for most of the year, but I changed kickers like I change underwear...

Here's my final roster:

QB: Romo
RB: Steven Jackson
RB: Chris Johnson
WR: Anquan Boldin
WR: Roddy While
WR: Kevin Walter
TE: John Carlson
K: Garrett Hartley (picked up for last week at Detroit)
DEF: Tampa Bay

Bench
QB: Jeff Garcia
RB: Reggie Bush
RB: Carnell Williams
WR: DeSean Jackson
WR: Ocho Stinko
WR: Braylon Edwards
TE: Dustin Keller

Yahoo! (14 team) notes: I had a few bad picks, but this team was ravaged by injuries. "Ben", Selvin Young, and Todd Heap were all outright bust. Ben had no time to throw due to a depleted line, Young split carries three ways and was taken out once they entered the red zone, and Heap was stuck blocking for a rookie QB.

In week 1, I lost Burleson and Bennett for the season and Colston for 9 weeks. Throw in the fact that I lost Steven Jackson for a prolonged period of time, and it is amazing that I made it threw to place second. Aaron Rodgers, Chris Johnson, Megatron, and Tim Hightower absolutely carried me.

Other interesting things...Picking up Lance Moore was a gold mine as he played the Reggie Bush role after Bush got hurt...Matt Jones was on the team but I cut him before the cocaine suspension...I actually picked up and played Antwan Randle El(lol)...I added and dropped Antonio Bryant prematurely which was probably my worst move of the year

Here's my final roster:

QB: Rodgers
WR: Megatron
WR: Colston
RB: Chris Johnson
RB: Steven Jackson
W/R: DeSean Jackson (although Hightower played a whole lot)
TE: Carlson
K: Hartley
DEF: TB

Bench
QB: Ben
RB: Tim Hightower
RB: Maurice Morris
RB: Carnell Williams
WR: Lance Moore
K: Jay Feely
Def: Carolina

It hit me...

the other day like a ton of bricks. I'll never be a poker professional or be anything more than a slightly better than average player. I'm missing the most important thing: patience.

I was playing the other day, December 23rd to be exact, and I had a couple of sessions where I made $5 total. They were very, very well played. I probably only made one mistake between both sessions. The only real hand I got was QQ, but I made due with suited connectors and bluffs. There were some weakish players that I was able to push off hands and grind it out. I decided that I would multitable the next day, so that I could speed up the hands I was seeing. I just wanted to get some good, big hands in.

The next day, I do, in fact multi table. Things were going pretty mediocre. I still hadn't gotten any hands, but I was down only $5 between the two tables. Feeling bad because I wanted to win some money, I tilted and pushed one hand too far.

I had 36s, flop is 268 off, and I bet. He calls. Next off is an Ace. I checked, and he bets. Despite having a weak hand with no outs, I decide to reraise bluff all in. He insta-calls me with AK. I was representing trips or at least two pair, but I was stupid for thinking AT ALL. I should've folded my freaking hand and stopped playing loose aggressive.

Upon reflection, it hit me. There were 8 tight aggressive players at my .10/.25 table. I thought about leaving, but I thought I could outplay them. That's the dumbest thought I'd ever had, and I'm a pretty stupid mother f-er. What I was doing was throwing money away. I wasn't going to get paid for AA or KK, and I would have to enter the pot with a weaker hand than they would likely have and hope to get lucky with a big flop. Knowing things hadn't been going my way, I should've just left and got lunch.

Secondly, it hit me that the players at many of the Ironman players at FTP have the very same strategy.

1. Play AA, KK to the max
2. Play AK raising PF, fold flop unless unlikely to hit single opponent, Fold turn unless TPTK
3. Play QQ-22 for trips, higher pairs for value
4. Play as many tables at possible.

Playing 10 tables, they are seeing over 100 hands per 10 minutes. That means, they will see AA or KK every 10 minutes!

They aren't trying to outwit other players. They are simply pumping out volume. Knowing this, you can take a few blinds off of them, but generally, they will have the best hand when they enter a pot. It'll also be difficult to pick them off or blind them to death, because the hand groupings above represent 7% of all hands. They can mix in a few more hands like AQ and KQs from late position and appear to be active but tight.

These players are always on, and they are always at every table. I think it's the reason why it seems like the competition online is tougher than the competition in live action. In live action, you have to play what you are dealt, and only the most patient rock on earth would play that strategy.

Either way, I've got $30 left. I'm dropping down to the .05/.10 level, and I'm going to just play for entertainment. I've tried for years and been successful to an extent, but I guess it was always a matter of time before I failed at this. I fail at everything in life, so it shouldn't be a suprise.

I think I'm going to blog a series of my lessons learned in life so far over the next few weeks/months. Look out for that.

More frustration...Originally written December 15

Week two of my new poker style is not working out so well even though my sessions are more eventful. It has really boiled down to three hands that have made the difference. Ironically, I'm not sure how much the style mattered in these hands. In hands 2 and 3, they probably would've happened anyway.

Hand 1: I pick up J8s in late position. There is one early position call, and I decide to limp in. The player on the button raises the size of the pot. The early position player calls, and I decide to call as well. I'm getting pretty good odds (2.88:1 or 25% break even) and I have a hand that is fit or fold. It's also a deceptive hand meaning I could potentially make a lot of money with it.

Flop: The flop comes JJ3 with two hearts. The EP player checks, and I decide to play the hand fast. I don't want another heart to fall, and I figure that the late position player (VPIP: 9, PFR:6) probably has a strong hand here. He's so tight, he could be holding AA, KK, or QQ. He flat calls me. I'm now a little nervous, but I'm generally happy with the call. He's got some sort of hand, but not enough to raise with, and the flop likely didn't hit me.

Turn: The flop comes 9 of spade now giving both heart and spade flush draws. I'm not in love with the draws, and he's shown some potential to call. I put in a pot sized bet, and I think that will end the hand. He rereaises me to put me all in. I'm thinking what hands could he have:

Hands I beat that are posibble: AA, KK, QQ, TT
Hand that I lose to that are possible: 99, 33, AJ maybe KJ.

33: I don't think a player this tight raises 33 preflop. It's not in his playable hand range if he only in 9% of hands.

A bigger J: Mathematically, the odds he has the case Jack are 1-(46/47)*(45/46)=4.3% for one opponent, so roughly double that, 8%, for two opponents.

The pot is offering me 1:4.09 or 20% breakeven. Regardless of what he might hold, I've almost got to make the call, because I have ten outs (3 3s, 3 9s, 3 8s, and the case J), and mathematically I'm getting the price to call.

Of course, he turns over AJo. The river comes Ace and he wins with a full house. I'm not sure how I could have played this differently. Obviously folding the reraise seems smart in hindsight, but not at the time. Should I have checked the turn and kept the pot under control? There was an error here, but I'm not immediately sure where.

Hand 2: I'm in the big blind and I catch 48 of diamonds. This is not in my playable hand range, but I get a free look at the flop against four other players.

Flop: You guessed it 5T7 of diamonds. I have a flush and a one outer to a straight flush. It's a baby flush though, so there is no need to slow play. I bet $1, and I am reraised to $2 by the very next player. The player after him flat calls the raise, and it folds back around to me. Given the flop, I could be up against a lot of hands, and I'm not sure what to do.

I don't think there is a large probability that either of the other players has a flush right now, but I do remember getting out flushed before in the same situation. Nonetheless, I decide to raise the pot to get all the flush draws out. The original caller folds, and I am raised all-in by the remaining player.

There is nothing he could have but a flush, and I know I don't have him outflushed. I've only got 1 out, so I've got about a 4 percent chance of catching up. I wanted to fold here, but I thought it would be knitty, since I didn't percieve that there was a high percentage of times that he would have two suited cards along with me.

After this hand, I computed the amount of times that two players are dealt cards of the same suit preflop, so I wouldn't make this mistake again. It is the second time it's happened after all, so maybe I don't have a strong grasp of the odds. The odds are actually that another person will have the same two suits around 8% of the time. I guess I've been overplaying my hand in that spot, and I'll need to slow down.

Hand 3: I pick up KK and another guy has AA. I mean, at this point, it's kind of comical. I've played 32 hours at FTP consisting of 2,354 hands. I've had KK 20 times which is twice as many as you would expect. 4 of those times (20%) another player had AA. In addition, I've run into QQ and TT twice in that time, and I won neither hand and I've been outdrawn by Q9 offsuit.

It's to the point that I want to start laying down KK preflop anytime someone plays back at me even though I know that is stupid. I just want to stop getting KK for a while. I hate it and I have no confidence that it can win for me. I know that if it wasn't KK, it would be something else but I would honestly prefer something else at this point.

Action Marc Wilson

As I wrote a few weeks ago, I’d been struggling at the Poker tables, and I got down as much as a whopping $50. There were those situations where I did lose KK to AA preflop, and there was nothing I could do about that. I felt, however, that I wasn’t doing as well as I should session per session. I decided to study what was going on.

What I saw was actually what I thought I would see. I was playing very close to the Harrington cash game strategy in all sessions. At first, I thought this was good and I was just unlucky, but I began to rethink that notion primarily because of what I’d seen at the Full Tilt Deep stack tables. What I’d noticed is that the loose aggressive players seemed to be perpetual winners and the tight aggressive players were either breakeven or down. This began to make even more since when I remembered how tight the games can get and the notion that you should play opposite of the general table.

The behavior was exactly what I expected. There were a lot of uncontested preflop raises, and I never seemed to get action on my big hands (unless I was behind). Most players probably figured I was tight, and since I wasn’t playing many hands it was worth folding to me. The loose players were benefiting by picking up a lot of the folded blinds and by making big hands with the added bonus of them being well disguised. I figured it was worth it to me to research more to see if I could figure out the guidelines for loose aggressive play.

I first checked with Harrington to see what he said about loose aggressive play and what I found there was really not worth reading. He mentions it and gives an overview, but the section quite frankly left something to be desired…Yes, I did just criticize Harrington. I then searched the internet, and I really found nothing of use. There were a lot of overview type sites, but no one really had a developed strategy or hand chart. I figured at that point that I would just have to develop my own strategy with the pieces of overviews until I went to my shelf and reread my long dismissed copy of Doyle Brunson’s Super System.

As a tournament, sit and go, and low stakes cash game player, I’d always thought that his book was just a bunch of braggadocio with a few strategic insights. I’d leaned towards Harrington’s strategy much more detailed tight strategy which will win if you can consistently find loose tables. After rereading it, however, he described exactly what I’d been seeing at the FTP deep stack tables, and his entire strategy now made more sense than anything I’d ever read about the game.

I reread the No limit hold’em section of the book five times last week and made copious notes to make sure I executed properly once I got to the tables.

What was the result? First, it was much, much, more fun as I wasn’t doing a lot of sitting and folding. Many times, I would call in early position with a small pair but fold after a raise under Harrington’s paradigm. Eliminating that kept me in more hands giving me an opportunity to win. Secondly and more importantly, it was much more profitable. I was able to catch a lot of hands that no one expected me to have, so they were never really able to put me on a hand. It led to crying calls and bets into my really strong hands.

All that said, I think that I’m at the beginning of the journey to become a complete player. I now have two strategies (Brunson and Harrington) which I can employ in cash games as the table changes. I’ve seen a lot between all the tournaments and the cash games that I’ve played, and I’m beginning to get better at hand reading and realizing unprofitable situations. Hopefully, I can turn the corner and finally move past more than just being a profitable, pretty good, intermediate player. I know I’m still at $.10/$.25 and have a long, long way to go, but I’m feeling more optimistic that I’ll get to be one of the better players and make it to the higher levels.