Learn the rules before the exceptions
I found out a couple of nights ago that I am very bad at poker.
At its core, poker is a math game. You have differing probabilities of winning hands based on your cards, which cards have been flipped, and how many other players are still in. This level, which is unconditional, can be mapped out completely. You can know the unconditional probability of winning the hand down to the billioniths place. While we all kind of get that, for someone it seems like most casual players, myself certainly included, never spent significant time familiarizing ourselves with the actual probabilities of varying situations just given the data provided. Instead we try to “read” the table for cues and then what is fundamentally a math game with a social layer into a fundamentally social game with a math layer. This leads to bad results masked in noise, which is attributed to genius when in our favor and bad luck when not. Avoid that.
The same is true in speculative investment (which is most “investing” in my peer group). Market psychology may be helpful in guiding your attention, but at the end of the day if you can’t get a good estimate on true value for a security, you should not be buying it. It’s silly. It’s the equivalent of calling a bluff without checking your own cards — even if you’re right about them lying you might still lose the hand.
Worry about the polish after you’ve mastered the fundamentals.
