Play the Percentages
Card counting is a strategy used by gamblers in blackjack to determine whether the next hand will give an advantage to the player or the casino. The gambler keeps a running count, tracking the cards as they come up to know when the decks are rich in 10’s & face cards. The player then increases and decreases his bets based on how stacked the decks are, amplifying winnings and diminishing losses. The card counter is playing the percentages to decrease the casino’s house edge, thereby increasing his probability of victory.
The “house edge” is the mathematical advantage the casino has as you play over time. It is the lowest in Blackjack, hovering at around 1%. That means that if you play infinitely with the correct strategy, the casino should win 51% of the time and the player should win 49% of the time. This minuscule advantage and the fact that most players don’t follow the correct strategy are what make the casino business so profitable.
Billions in profit are generated off only a 1% advantage.
The same strategic thinking behind card counting can be applied to your life and business. All of our decisions can be broken down to probabilities, the percentage likelihood that the desired outcome will occur. For example, if I buy this stock, I believe I will have a 50% chance of doubling my money or if I stop smoking my probability of getting lung cancer will diminish significantly. It is not an exact science, but generally we have some idea of the probability we will achieve our desired outcome. The only difference between life and gambling is that in life we often have a higher probability of success, far greater than the casino’s 1% Blackjack advantage.
In life, you can be the casino. The more well calculated risks you take over time, the more likely you will win.
But managing risk is only one part of a card counter’s strategy they also need manage resources. To keep playing over time you must have the resources to do so. For many our primary resource is money, but it can also be time, reputation, collaborators, technology, creativity, or any resource that contributes to your ability to take advantage of an opportunity. Like the counter, you should increase and decrease your bets based on your probability of success. If you think your probability of success is only 30%, that opportunity has a higher risk and you should allocate fewer resources. While if there is an action that has a 70% probability of success, you should allocate more resources. While the odds will hold true over time, you will experience losses. So make sure to conserve resources so you can continue to play in this infinite game.
And never forget that with every new hand you are dealt, the odds reset. Don’t let your emotional memory obscure that you are no more likely to fail or succeed based on the last chance you took. Just look for your next shot and take it.