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Speaker 1: Pushkin.

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Speaker 2: Hey, it's Jacob. This week, I want to play for

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Speaker 2: you an episode from another podcast that Pushkin just launched.

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Speaker 2: It's a show called Risky Business and it's hosted by

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Speaker 2: Nate Silver and Maria Konikova. It's a show about making

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Speaker 2: better decisions. Both Nate and Maria are journalists and they

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Speaker 2: are also high stakes poker players, so they're bringing their

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Speaker 2: perspective both from their work in journalism and from the

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Speaker 2: poker table to help you think about risk and decision making.

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Speaker 2: On the show, they talk about everything from poker to

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Speaker 2: politics to making better choices in your own life. The

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Speaker 2: show is called Risky Business with Nate Silver and Maria Kanakova.

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Speaker 2: You can find it wherever, and I hope you like

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Speaker 2: it here it.

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Speaker 3: Is Welcome back to Risky Business, a show about making

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Speaker 3: better decisions. I'm Maria Kanakova and I'm Nate Silver. Today

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Speaker 3: we'll be talking about a few different things, starting with

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Speaker 3: justice Sonya so Toe Mayor and whether or not she

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Speaker 3: should retire.

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Speaker 4: And we'll talk about degenerate sports betting in the world

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Speaker 4: of professional athletes. A Major League Baseball player were suspended

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Speaker 4: for life last week for betting on his own team's games.

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Speaker 3: And talking about a different area of degeneracy. We're going

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Speaker 3: to be giving you a little taste of the world

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Speaker 3: of memestocks with the return of Roaring Kitty aka Keith

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Speaker 3: gill get a little bit into what that means for

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Speaker 3: the world of trading more broadly. So so Nate, There's

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Speaker 3: been a lot of talk, and we've talked about the

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Speaker 3: Supreme Court right now and what's going on with it.

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Speaker 3: Something that we haven't talked about is the fact that

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Speaker 3: one of the only liberal justices, Sonya so Tamayor, is

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Speaker 3: reaching a point where she is getting older. She's seventy

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Speaker 3: years old. She is not in great health, she has diabetes.

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Speaker 3: She often travels with a physician. And we're nearing the

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Speaker 3: end of the Biden and administration, and as you and

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Speaker 3: I have discussed on previous episodes, we don't know if

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Speaker 3: Biden is going to get re elected. We don't know

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Speaker 3: if the Democrats are going to stay in power. So

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Speaker 3: what does this mean for the Supreme Court? What does

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Speaker 3: this mean for Justice? So to Mayor, should she be

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Speaker 3: considering retiring right now while Biden can still definitely replace her.

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Speaker 4: So she is sixty nine, she turns seventy eight later

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Speaker 4: this month.

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Speaker 3: I'm sorry. I'm so sorry, Sonya. I aged you and

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Speaker 3: I and I apologize.

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Speaker 4: That's what we call a newspeg in the business. It's

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Speaker 4: almost her seventieth birthday. We're getting ahead of the news,

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Speaker 4: and therefore that's why we're partly why we're doing this now,

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Speaker 4: but also because we, as you said, Maria, maybe toward

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Speaker 4: the end of Biden's we are toward the end of

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Speaker 4: his first term in office, and maybe the end of

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Speaker 4: any terms in office. If the polls are right. Donald

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Speaker 4: Trump is a head right now, although it's close. If

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Speaker 4: Biden does prevail, Democrats could also lose the Senate. There

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Speaker 4: are Democratic held seats, for example, up in West Virginia

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Speaker 4: and Montana. In West Virginia, Joe Manchin has retired, so

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Speaker 4: that seat's like gone for sure. Montana, to a lesser extent,

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Speaker 4: Ohio are tough hoold for Democrats, So even if Biden

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Speaker 4: returns to the presidency, you might have an uncooperative Republican Senate.

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Speaker 4: So you asked, should she consider retiring, and the answer

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Speaker 4: she should not just consider. She should retire today. Go

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Speaker 4: take one of these university president jobs. Everybody is quitting

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Speaker 4: go be president of Yale or Harvard, or go, you know,

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Speaker 4: go make lots of money selling a book, go under

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Speaker 4: the World Series of Poker main event. I'm sure she's

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Speaker 4: a very candy poker player, but she should absolutely retire

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Speaker 4: if she actually cares about any of the values that

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Speaker 4: she purports to care about, these kind of liberal, progressive values.

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Speaker 4: Because she doesn't retire, then she very easily be replaced

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Speaker 4: by another conservative justice, leading to a seven to two

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Speaker 4: conservative majority.

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Speaker 3: And that is that's going to be difficult to overcome.

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Speaker 3: I mean, if we have a seven to two conservative majority,

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Speaker 3: it could be. I mean, I don't know how many

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Speaker 3: presidents is will need before the Supreme Court is more balanced.

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Speaker 1: Could be.

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Speaker 4: I mean, So it's it's not just that like the

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Speaker 4: Supreme Court would increase our conserns would increase their majority.

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Speaker 4: It's also that, like believe it or not, the Supreme

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Speaker 4: Court agrees on more issues than you might think. But

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Speaker 4: where that middle point falls is is important, right, the

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Speaker 4: fact that it does fall with the Barrett or a

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Speaker 4: Kavanaugh or on some issues, Justice Gorsic is a little

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Speaker 4: bit heterodox on some issues versus like an Alito or

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Speaker 4: something like that. Like that also has a material impact

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Speaker 4: as far as how far they.

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Speaker 1: Will go on certain issues.

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Speaker 3: I completely agree with you. Yeah, And I think that,

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Speaker 3: and I think that we should really look at the

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Speaker 3: past to kind of guide Justice Sotomayor's decision right now,

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Speaker 3: because I'm gonna I'm just gonna go ahead and say this,

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Speaker 3: and fellow female liberals are going to get really really

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Speaker 3: mad at me, but I am so fucking mad at

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Speaker 3: RBG that, like, for me, her entire legacy is tainted,

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Speaker 3: like the sheer hubris of not retiring when she could

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Speaker 3: have been replaced and of being like, no, I'm going

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Speaker 3: to live forever. I'm fucking RBG like, look at my

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Speaker 3: legacy like I'm invincible, and she, like her legacy is

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Speaker 3: Roe v. Wade being overturned. That's her legacy because if

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Speaker 3: she had retired early, we would have had an entirely

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Speaker 3: different court. And like I used to be like such

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Speaker 3: a you know, such an avid RBG fan, and I'm

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Speaker 3: not anymore because like, I think that with that one decision,

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Speaker 3: she's single handedly set woman back much further than she

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Speaker 3: ever advanced them. I said it. People are going to

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Speaker 3: get mad at me, but I think that that is

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Speaker 3: the truth and I am so pissed at her, like

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Speaker 3: from beyond the grave that I just I can rant forever.

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Speaker 4: No, I'm glad you said it. I mean, in the

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Speaker 4: Silver Bulletin post I wrote about sort of mayor said

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Speaker 4: that her retirement is a political IQ test, and that's

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Speaker 4: you know, that's a little bit of invective. She's I'm

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Speaker 4: sure a very smart woman. I'm not sure how smart.

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Speaker 4: Some of the kind of liberal political observers are frankly right,

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Speaker 4: because the excuses are dumb. Frankly just dumb. They'll say, well,

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Speaker 4: you can't force a Latina justice to retire, Well, sure

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Speaker 4: you can.

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Speaker 1: There are lots of qualified.

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Speaker 4: Latina associate justices and things like that could replace her.

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Speaker 4: If you believe that's an important thing to do, right

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Speaker 4: or if people say, oh, it's kind of like it's

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Speaker 4: ableless to worry about her diabetes, well I'm sorry. If

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Speaker 4: you write in the constitution that you have a lifetime

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Speaker 4: appointment to something, which, by the way, I think is

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Speaker 4: a bad idea.

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Speaker 1: I think she'd be limited toward eighteen.

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Speaker 4: Years or something like that. But if it's a lifetime appointment,

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Speaker 4: absolutely it's a public's responsibility online to consider, like the

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Speaker 4: health of the justices. It plays out strategically, but historically

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Speaker 4: justices wait to time their retirements for partisan reasons, right

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Speaker 4: they want to be replaced by the same party that

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Speaker 4: appointed them in the first place. So that's not new.

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Speaker 1: You know.

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Speaker 4: Justice Kennedy, for example, who was more moderate, did so

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Speaker 4: under Trump when he had some time to go. So look,

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Speaker 4: maybe some of Mayor is not a believer in the

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Speaker 4: polls that show Biden trailing, and.

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Speaker 1: Again that is close.

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Speaker 4: The issue is just as much, if not more, about

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Speaker 4: the Senate in the long term, where in the Senate,

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Speaker 4: North Dakota has as many senators as California despite having

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Speaker 4: what it is, you know, one fortieth of the population

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Speaker 4: or things like that. Currently in the Trumpian coalition, the

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Speaker 4: GOP does better among rural voters, white rural voters in particular,

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Speaker 4: and they are overrepresented by quite a lot in the Senate.

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Speaker 1: So look, if the.

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Speaker 4: GOP gets attacked together, they would have potentially a relatively

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Speaker 4: durable advantage to the Senate. I do think I kind

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Speaker 4: of once you go out more than five or ten years,

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Speaker 4: it kind of becomes a fuzzy crystal ball. But the

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Speaker 4: basic math is that, like you don't know, what's going

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Speaker 4: to happen in terms of medium term political future. You're

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Speaker 4: about to turn seventy years old, you have diabetes, like,

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Speaker 4: and like, I don't know, Like, by the way, why

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Speaker 4: is the ego involved here? Like it just kind of weirdly,

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Speaker 4: it's weirdly stubborn. It makes me think less of people

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Speaker 4: who seek out power, I suppose.

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Speaker 3: Yeah, absolutely, I totally agree. And by the way, an

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Speaker 3: important point that you're making that you didn't make explicit

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Speaker 3: is that it matters not just who wins the presidency

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Speaker 3: but what the majority is in the Senate. Because let's

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Speaker 3: not forget the Garland disaster where Obama tried to appoint

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Speaker 3: him and the Senate just literally blocked the hearings and

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Speaker 3: Garland didn't even get a chance to be considered. And

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Speaker 3: that's something that can happen.

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Speaker 4: I mean, it reminds me a little bit of like,

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Speaker 4: you know, sometimes the failure to make a change is

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Speaker 4: the biggest risk, right, It's like, well, why would I

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Speaker 4: disrupt the status quota when I have this job? You know,

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Speaker 4: seventy years old is not that old for a woman

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Speaker 4: who presumably has good health care, even if she has diabetes.

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Speaker 4: But like, sometimes the status quo is the riskier is

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Speaker 4: the riskier path?

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Speaker 1: Right?

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Speaker 4: You know right now that she can be replaced by

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Speaker 4: another liberal justice. Democrats in the Senate, even the Joe

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Speaker 4: Manchins of the world, have been very loyal to Biden

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Speaker 4: on judicial appointments. You don't know anything beyond what happens

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Speaker 4: in November. And by the way, in terms of like

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Speaker 4: pure political tactics to have a big fight of a

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Speaker 4: Supreme Court, this is an issue where Democrats now are

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Speaker 4: more charged up and talk about abortion rights and things

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Speaker 4: like that. I'm sure whoever is nominated it would be

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Speaker 4: subject to lots of abuse from Republican commentators. This would

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Speaker 4: also be I think a good way to rile up

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Speaker 4: democrats generate more enthusiasm, which is a bit flagging for

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Speaker 4: Biden right now.

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Speaker 1: But I don't know.

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Speaker 4: People are like, well, you shouldn't think of politics in

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Speaker 4: terms of expected value.

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Speaker 1: It's should, yes, you should.

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Speaker 3: By the way, everyone who says it's not a game,

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Speaker 3: like did you look up? Did you see what the

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Speaker 3: Senate tried to do? Right? They're trying to figure out

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Speaker 3: how do I how do I game it?

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Speaker 1: Right?

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Speaker 3: Like they are, This is gamesmanship. This is exactly what

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Speaker 3: gamesmanship is to try to figure out how do I

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Speaker 3: gain an edge, how do I use the rules to

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Speaker 3: try to do what I want, even though the intention

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Speaker 3: is not that right. I understand what the spirit of

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Speaker 3: the Constitution is and I don't give a fuck. I'm

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Speaker 3: just going to do like what I can within the

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Speaker 3: rules so that we win. And I think that it's

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Speaker 3: absolutely a game in that respect, and it brings out

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Speaker 3: the types of people I've written before about kind of

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Speaker 3: the difference between sportsmanship and gamesmanship, and the Republicans are

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Speaker 3: definitely much more into gamesmanship, and the Democrats are trying

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Speaker 3: to take the higher sportsmanlike road, and that ain't working

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Speaker 3: out so well when the other people are are better gamesmen.

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Speaker 1: Yeah, you know.

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Speaker 4: The White House has also not said anything about this,

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Speaker 4: in part because they have a candidate who is eighty

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Speaker 4: one years old, an Aldea. People are being too old

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Speaker 4: for office is a big no no topic that they

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Speaker 4: don't want to get into. But also, like some of

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Speaker 4: it comes down to identity politics. I think it's fair

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Speaker 4: to say I personally think if you kind of take

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Speaker 4: progressive politics seriously, the notion that like having someone who

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Speaker 4: represents the group, I think that's substantively smaller impact than

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Speaker 4: like six three versus seven to two or down the line,

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Speaker 4: who knows seven two verses eight one, or five to

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Speaker 4: four versus six three or something like that. But this

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Speaker 4: is why I don't really find people who are into politics.

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Speaker 4: I don't really they're not by crowd, really right, because

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Speaker 4: this is a this is such a no brainer.

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Speaker 1: This is not close.

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Speaker 4: Whereas we talked about Biden the other week, like by

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Speaker 4: retiring it's kind of a really tough either way, that's

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Speaker 4: really close. This is not close.

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Speaker 1: Now, this is like absolute no brainer.

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Speaker 3: Totally agree with you. And by the way, I learned

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Speaker 3: the hard way, Like when you were saying I think

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Speaker 3: a really important point is that you know, seeking the

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Speaker 3: status quo kind of saying like, oh, like this is

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Speaker 3: the this is the safer way to do it is

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Speaker 3: oftentimes not safer.

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Speaker 1: Right.

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Speaker 3: I learned this the hard way when I started playing poker.

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Speaker 3: That like, if you try to do nothing, that's also

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Speaker 3: very much in action, right, that is, that is very

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Speaker 3: much a choice, that is very much doing something, and

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Speaker 3: it's doing something that's not optimal and you're not doing

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Speaker 3: it for the right reasons. And that's what's happening right now.

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Speaker 3: So like, get your ass in gear, actually look at

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Speaker 3: the incentives, look at the future, and try to figure out.

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Speaker 3: I think this is also really important what risks are

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Speaker 3: worth it and what risks aren't because there is so

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Speaker 3: much uncertainty here. We don't know what the percentages are

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Speaker 3: because there is this uncertainty about you know, who's going

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Speaker 3: to win the presidency, who is going to win the Senate?

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Speaker 3: Is that risk worth it? And I think in this

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Speaker 3: particular case, it's just a slam dunk. No, it absolutely

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Speaker 3: is not.

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Speaker 1: We'll be right back.

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Speaker 4: Last week, Major League Baseball suspended San Diego Padres shortstop

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Speaker 4: Tikipeda Marcano permanently for allegedly having bet on baseball games

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Speaker 4: while a member of the Pittsburgh Pirates. It also suspended

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Speaker 4: four other players, of who are now in the minor

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Speaker 4: leagues for a year for betting on games not involving

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Speaker 4: their teams. So there's been a lot of gambling scandal

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Speaker 4: news coming out of baseball and other sports slightly of course,

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Speaker 4: earlier this year, maybe the best player in the world,

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Speaker 4: shohe Otane, his former interpreter and BFF.

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Speaker 3: Potentially a potentially former BFF.

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Speaker 4: TWA if I committed seventeen million dollars of wirefraud involving

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Speaker 4: your account, Maria, would we still be friends?

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Speaker 3: Absolutely, Nate, I would forgive. You're in a heartbeat, because

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Speaker 3: that would mean that I somehow had seventeen million dollars.

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Speaker 1: There you go, if you you know, what's seventeen million?

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Speaker 4: If you signed a fifty.

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Speaker 3: Between friends, what's seventeen between? What's minus? Isn't it? But

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Speaker 3: as you were saying, Mizahara clued guilty, right, he.

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Speaker 4: Pled guilty, and Major League Baseball closed the investigation, which

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Speaker 4: I know. I actually still a couple of questions about

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Speaker 4: Otani's involvement that will communiately never hear anything about ever again.

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Speaker 4: But yeah, So this is the first suspension for gambling

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Speaker 4: at related reasons since Pete Rose, who also was alleged

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Speaker 4: to have bet on his own team. Now, Marcano, from

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Speaker 4: what I read, has not planned to appeal, at least

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Speaker 4: not for right now. In fairness to him, there is

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Speaker 4: a somewhat mitigating circumstance, which is that when he was

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Speaker 4: making these bets, he was injured, not actively playing for

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Speaker 4: the Pirates. But still, the theory of the case is

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Speaker 4: that even if you're betting on your own team. You

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Speaker 4: still have inside information that's valuable. Right if you know

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Speaker 4: that a certain player is healthy and therefore likely to play,

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Speaker 4: Right if you know that the team was up all

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Speaker 4: night at the strip club, maybe you'd choose not to

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Speaker 4: bet that game, for example. So, and this is like

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Speaker 4: literally a rule posted in every Major League Baseball clubhouse.

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Speaker 4: You bet on games involving your own team, you are

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Speaker 4: suspended for life. It is one of the least ambuist

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Speaker 4: rules in all of Baseball's rule book.

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Speaker 3: Yeah, and I think that it's a rule that makes

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Speaker 3: complete sense, right, because if you're betting on your own

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Speaker 3: team or providing information, I mean that is like, that's

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Speaker 3: a different kind of inside baseball, right, that is not

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Speaker 3: the good kind. And I think that when we see

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Speaker 3: suspensions like this, I think it's really important. As the

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Speaker 3: ubiquity of sports betting goes up, as we have these

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Speaker 3: apps everywhere, as it's possible to do all these crazy

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Speaker 3: parlay bets, as it's possible to bet while events are

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Speaker 3: actually going on, all of these new capabilities that haven't

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Speaker 3: existed in the past, I think it's incredibly important to

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Speaker 3: be strict about this. By the way, I also think

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Speaker 3: it's kind of hilarious in a way. Hilarious might be

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Speaker 3: the wrong word. But how bad Marcano still was. I mean,

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Speaker 3: I think he won just over four percent.

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Speaker 1: Well that's a little So this is.

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Speaker 3: Something that there's spin involved here.

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Speaker 4: I mean, so peason he's winning four percent of his

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Speaker 4: bets is because he's beending multi leg parlays, right, see,

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Speaker 4: but on the pirates to win, and you bet on

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Speaker 4: five other teams to win, and therefore, you know, take

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Speaker 4: like two to the fifth power if they're all fifty

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Speaker 4: to fifty bets, and so so he's doing multi team

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Speaker 4: parlays where you usually lose, but like when you win,

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Speaker 4: you win a lot. So the four percent is kind

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Speaker 4: of misleading. That might be the expected value in terms

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Speaker 4: of how often he's supposed to win. There is one irony, though,

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Speaker 4: which is that like he was apparently using one of

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Speaker 4: the legal sports books that like tipped off major League Baseball.

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Speaker 4: So yeah, these guys, will you know, squeal on you

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Speaker 4: if you're a Major League Baseball player you decide to

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Speaker 4: bet on games. They are they have incentives though, to

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Speaker 4: be concerned about about action that could compromise their deal

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Speaker 4: with the leagues. They have concerns about game integrity two.

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Speaker 4: In some ways, I've been surprised there hasn't been even

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Speaker 4: more of a backlash. But look, if you're a major

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Speaker 4: League Baseball player, my advice to you is do not

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Speaker 4: use like DraftKings or fan duel or a partner that's

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Speaker 4: in bed with Major League Baseball. Right use some offshore

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Speaker 4: illegal betting website. There's less likelihood of being detected.

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Speaker 3: Like Epei Mezuhara did for seventeen million dollars.

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Speaker 4: Yeah, at least at least Epe gave himself a chance, right.

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Speaker 4: Epe was smart enough to know you're not going to

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Speaker 4: fucking bet on fan duel, then you're drawing dead.

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Speaker 3: By the way it is, I think it's interesting to

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Speaker 3: note when I was saying that it's it's crucial that

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Speaker 3: people are being caught, that the four players who were

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Speaker 3: suspended for a year, they all bet just a few

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Speaker 3: hundred dollars, right like that was. They didn't make big bets,

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Speaker 3: they made tiny bets, and they were still suspended. So

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Speaker 3: I think that that's actually a really important hardline to

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Speaker 3: draw that it doesn't have to be in the millions,

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Speaker 3: it doesn't have to be in the hundreds of thousands.

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Speaker 3: This was like one hundred bucks, two hundred bucks, you know,

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Speaker 3: four hundred bucks.

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Speaker 4: Yeah, and uh, you know, Marcano's bets were larger. The

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Speaker 4: total some low six figures. But you know, I doubt

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Speaker 4: that he is betting to make a profit, right. I mean,

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Speaker 4: you take a bunch of competitive young men in any industry,

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Speaker 4: there's a lot of DJM, as we would call it,

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Speaker 4: a lot of degeneracy and things like poker. High six

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Speaker 4: poker games are often played on the back of team

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Speaker 4: planes and things like that.

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Speaker 1: These people are.

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Speaker 4: Around a lot of money all the time. The rookies

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Speaker 4: are not making that much, but they're around people who

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Speaker 4: are making lots and lots and lots of money.

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Speaker 1: You know.

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Speaker 4: The one case where there really was some kind of

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Speaker 4: expected value for the person making the bets was the

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Speaker 4: NBA player John tay Porter, who was apparently had been

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Speaker 4: dealt in somehow to individual player parlays where why people

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Speaker 4: were betting on this obscure player named John tay Porter

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Speaker 4: is hard to know, but he basically intentionally tanked the game, right.

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Speaker 4: He would intentionally make up a fake injury, allegedly, he

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Speaker 4: would intentionally like not hustle after rebounds, allegedly so that

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Speaker 4: his betters would achieve the under on like how many

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Speaker 4: points that John tay Porter would receive, and that was

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Speaker 4: very suspicious. I mean, I think the NBA got lucky

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Speaker 4: that that scandal broke at about the same time as

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Speaker 4: the Otani scandal broke, because that actually affected directly affected

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Speaker 4: game integrity, and that's like a kind of deeper level

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Speaker 4: of hell, I think than what Marcano did.

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Speaker 3: I totally agree with you, and I'm really glad I

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Speaker 3: was going to bring johntay Porter because I think that

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Speaker 3: what is going on there is actually the bigger issue,

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Speaker 3: because it's amazing that he was caught, and if you

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Speaker 3: think about the fact that I think the much bigger

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Speaker 3: issue isn't players like betting themselves because they'll get caught right,

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Speaker 3: like you'll figure it out, But players giving other betters

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Speaker 3: inside information and then actually affecting outcomes when they're in

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Speaker 3: the games. That's much more difficult to police, especially if

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Speaker 3: you're smart about it. Right, all of a sudden, if

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Speaker 3: you see millions on this obscure player who's then pulling

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Speaker 3: off some crazy shit that you know that you are

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Speaker 3: thinking of, like what in the world that's a red flag?

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Speaker 3: But imagine you're smarter about it, right, Imagine you're actually

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Speaker 3: someone who kind is a better cheater, who kind of

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Speaker 3: stays under the radar, who manages to do it a

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Speaker 3: little bit less blatantly, less often fakes you know, doesn't

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Speaker 3: fake injuries quite as much, doesn't throw games in quite

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Speaker 3: as obvious a way, but does it anyway. And that

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Speaker 3: to me is the much bigger and much scarier issue,

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Speaker 3: because that can really affect game integrity, It can affect

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Speaker 3: the entire kind of gaming community because it just goes

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Speaker 3: against the heart of why people play games, why people

401
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Speaker 3: watch games, you know, what this is all about. And

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Speaker 3: I think that that's the much bigger thing we should

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Speaker 3: be thinking about.

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Speaker 4: Yeah, betting on individual accomplishments raises this risk a lot,

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Speaker 4: Like you should not be taking that much action on

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Speaker 4: anything involving John tay Porter, right, Like, who the fuck

407
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Speaker 4: is going to bet that unless they have some type

408
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Speaker 4: of inside angle. I mean, I wasn't like a Summer

409
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Speaker 4: League game in Las Vegas about a year ago. Now

410
00:21:12,076 --> 00:21:14,076
Speaker 4: Summer League coincides with the end of the World Series

411
00:21:14,076 --> 00:21:17,676
Speaker 4: of Poker and watching the game and see like some

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Speaker 4: team executive two rows in front of me and giant

413
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Speaker 4: font on his cell phone is typing about how the

414
00:21:26,076 --> 00:21:29,516
Speaker 4: New York Mexican a trade for og Ananobi which didn't

415
00:21:29,516 --> 00:21:33,396
Speaker 4: happen then but did actually happen several months later. If

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Speaker 4: I having not really it's not really inside information, I

417
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Speaker 4: mean a public area of a stadium, right, But like

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Speaker 4: information has a way of slipping out about injuries, about fatigue,

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Speaker 4: you know, about like I know, you know, some people

420
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Speaker 4: will hang around tennis tournaments, for example, and see which

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Speaker 4: player is having like a cheating scandal with his girlfriend

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Speaker 4: or or looks like they're coming in hungover and things

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Speaker 4: like that. You know, information has.

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Speaker 1: A way of getting out.

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Speaker 4: And to limit your liability by focusing on more major

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00:22:02,676 --> 00:22:06,956
Speaker 4: and more robust wagering categories would be prudent, but you know,

427
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Speaker 4: but look, it's a money grab. The long term sustainability

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Speaker 4: of any of this, I think is not as assumed

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Speaker 4: as some of the big sports betting companies would would

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Speaker 4: right in their stock market and their ten k's and

431
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Speaker 4: things like that. So but you know, at the very

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Speaker 4: least they are smart enough to partner with the leagues

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Speaker 4: when they detect activity that underminess gain and integrity, to

434
00:22:28,756 --> 00:22:32,196
Speaker 4: at least tip them off to snitch on their customers.

435
00:22:32,436 --> 00:22:34,316
Speaker 3: No, absolutely, And I think we're not just talking about

436
00:22:34,396 --> 00:22:37,156
Speaker 3: US sports betting, US sportsbook. This is happening in sports

437
00:22:37,196 --> 00:22:39,636
Speaker 3: all over the world, and some of the worst are

438
00:22:39,676 --> 00:22:42,396
Speaker 3: actually in Europe and in places where there are lots

439
00:22:42,396 --> 00:22:44,996
Speaker 3: of athletes who are not paid very well. And a

440
00:22:44,996 --> 00:22:49,196
Speaker 3: lot of times they're young, right, they're teenagers. They're still

441
00:22:49,196 --> 00:22:52,236
Speaker 3: developing their sense of self, their sense of kind of

442
00:22:52,316 --> 00:22:55,196
Speaker 3: right and wrong and kind of gray areas and long

443
00:22:55,316 --> 00:22:58,796
Speaker 3: term consequences isn't fully developed. Because, by the way, if

444
00:22:58,836 --> 00:23:01,276
Speaker 3: you're like a seventeen year old guy, your prefrontal cortex

445
00:23:01,316 --> 00:23:04,676
Speaker 3: ain't fully developed yet. Your ability to kind of think

446
00:23:04,716 --> 00:23:07,876
Speaker 3: through long term decisions isn't fully developed. And if someone says,

447
00:23:07,916 --> 00:23:10,076
Speaker 3: do you want to make you know, a quick ten grand?

448
00:23:10,196 --> 00:23:13,116
Speaker 3: A quick you know quick this, You're like, okay, you know,

449
00:23:13,276 --> 00:23:15,596
Speaker 3: this might not be a bad idea. All I have

450
00:23:15,676 --> 00:23:17,996
Speaker 3: to do is, you know, if I'm a tennis player,

451
00:23:18,036 --> 00:23:20,956
Speaker 3: I just serve a little bit off right, just one time.

452
00:23:21,036 --> 00:23:23,996
Speaker 3: That's all it takes. I just lose one point. What's

453
00:23:23,996 --> 00:23:26,796
Speaker 3: one point? You know? I just do this a few times,

454
00:23:26,836 --> 00:23:29,236
Speaker 3: and all of a sudden I have money and you

455
00:23:29,316 --> 00:23:32,396
Speaker 3: don't think, wait, if I'm caught, there goes my career

456
00:23:32,436 --> 00:23:34,636
Speaker 3: and there goes kind of any chance I have of

457
00:23:34,676 --> 00:23:37,476
Speaker 3: all these future earnings. You just don't make that math.

458
00:23:37,556 --> 00:23:41,196
Speaker 3: You're thinking much more in the moment. You're thinking much

459
00:23:41,316 --> 00:23:45,276
Speaker 3: more immediate gratification as opposed to kind of long term

460
00:23:45,316 --> 00:23:48,476
Speaker 3: expected value. And I think that that is something that

461
00:23:48,596 --> 00:23:50,636
Speaker 3: people just need to be aware of, need to be

462
00:23:50,636 --> 00:23:53,156
Speaker 3: aware who the vulnerable players are. And I think that

463
00:23:53,196 --> 00:23:55,716
Speaker 3: teams need to guard against that, need to train against that,

464
00:23:56,116 --> 00:23:58,476
Speaker 3: need to kind of talk to them and explicitly say

465
00:23:58,476 --> 00:24:01,116
Speaker 3: what the long term consequences are and remind them of it.

466
00:24:01,196 --> 00:24:03,316
Speaker 3: I know you said in baseball, you know it can't

467
00:24:03,356 --> 00:24:08,156
Speaker 3: be more explicit, but still like have more reminders, constantly,

468
00:24:08,196 --> 00:24:10,916
Speaker 3: have these reminders of like this is what you don't

469
00:24:10,916 --> 00:24:12,716
Speaker 3: want to do or else it's going to be bad.

470
00:24:12,996 --> 00:24:16,276
Speaker 4: But in an environment that like encourages gambling, where there's

471
00:24:16,276 --> 00:24:18,596
Speaker 4: like draft kings or fan duel or caesars ads on

472
00:24:18,676 --> 00:24:22,236
Speaker 4: the outfield wall and poker games in the team plane,

473
00:24:22,996 --> 00:24:25,956
Speaker 4: you're and never going to have some of this with

474
00:24:25,956 --> 00:24:29,796
Speaker 4: with rich young men and not fully formed pre prefrontal cortexes.

475
00:24:29,796 --> 00:24:33,636
Speaker 3: What is it called yep prefrontal cortex. Okay, yeah, yeah, no,

476
00:24:33,756 --> 00:24:36,596
Speaker 3: I think that's I think that's exactly right. And if

477
00:24:36,596 --> 00:24:38,916
Speaker 3: we if we want to give kind of a nod

478
00:24:38,956 --> 00:24:42,116
Speaker 3: to the next layer, which is the Musuhara of it,

479
00:24:42,196 --> 00:24:45,516
Speaker 3: all right, that you have you have also these situations

480
00:24:45,556 --> 00:24:49,556
Speaker 3: where even if someone like Otani isn't cheating directly, isn't

481
00:24:49,596 --> 00:24:53,196
Speaker 3: isn't sports betting, there are incentives for people close to

482
00:24:53,596 --> 00:24:56,316
Speaker 3: these individuals to try to take advantage.

483
00:24:56,716 --> 00:24:59,636
Speaker 4: Major League Baseball seem pretty excited about being able to

484
00:24:59,636 --> 00:25:02,156
Speaker 4: wrap up that investigation. I mean, there's still a question

485
00:25:02,276 --> 00:25:07,836
Speaker 4: about why didn't Otani notice seventeen million dollars missing from

486
00:25:07,876 --> 00:25:09,116
Speaker 4: his account?

487
00:25:09,316 --> 00:25:11,996
Speaker 1: Like, that's a pretty fucking good question. I think it is.

488
00:25:12,236 --> 00:25:13,956
Speaker 3: It is, and we don't know, right, and but I

489
00:25:13,996 --> 00:25:17,476
Speaker 3: think that it's important to just throw those questions out

490
00:25:17,476 --> 00:25:22,116
Speaker 3: there because it is. Even though as someone who has

491
00:25:22,156 --> 00:25:24,636
Speaker 3: seen a lot of victims of con artists, I'm very

492
00:25:24,676 --> 00:25:27,436
Speaker 3: sympathetic to Otani if we look at it as a

493
00:25:27,676 --> 00:25:31,836
Speaker 3: typical con situation that he was potentially conned my Musahara,

494
00:25:31,916 --> 00:25:35,196
Speaker 3: you know, charmed by him. That Musahara is the one

495
00:25:35,236 --> 00:25:37,156
Speaker 3: who had access to his bank accounts, got all the

496
00:25:37,156 --> 00:25:39,596
Speaker 3: alerts et cetera, et cetera, et cetera. Like you can

497
00:25:39,636 --> 00:25:43,156
Speaker 3: make excuses up to a point, but as you say,

498
00:25:43,236 --> 00:25:48,156
Speaker 3: seventeen million dollars is a big number for anyone, and

499
00:25:48,236 --> 00:25:51,676
Speaker 3: so you have to then ask, like was he knowingly

500
00:25:51,716 --> 00:25:55,196
Speaker 3: looking the other way? Was he involved? Like what was

501
00:25:55,276 --> 00:25:57,676
Speaker 3: going on? And I think these are questions that should

502
00:25:57,716 --> 00:26:00,196
Speaker 3: be asked, but that won't be asked because the incentives

503
00:26:00,196 --> 00:26:04,716
Speaker 3: are completely misaligned here because nobody wants Otani to be

504
00:26:04,876 --> 00:26:07,916
Speaker 3: involved because he's the star, and we want the star

505
00:26:08,036 --> 00:26:11,516
Speaker 3: to keep being an untarnished star, and we want this

506
00:26:11,596 --> 00:26:13,596
Speaker 3: other guy to take the fall. And I do I

507
00:26:13,636 --> 00:26:15,596
Speaker 3: do agree with you though that there are still some

508
00:26:15,716 --> 00:26:18,516
Speaker 3: question marks, and unfortunately, I think that all we can

509
00:26:18,556 --> 00:26:20,836
Speaker 3: do is speculate. We're never going to know, But I

510
00:26:20,876 --> 00:26:22,956
Speaker 3: want to be careful and not to just say, oh,

511
00:26:22,996 --> 00:26:25,636
Speaker 3: like this is a problem of modern sports books, because like,

512
00:26:25,716 --> 00:26:29,316
Speaker 3: let's not forget you know, the Chicago Black Sox, like

513
00:26:29,436 --> 00:26:31,676
Speaker 3: shit like this has been going on in sports for

514
00:26:31,716 --> 00:26:36,996
Speaker 3: a very very long time before fan dual or DraftKings

515
00:26:37,076 --> 00:26:39,556
Speaker 3: or any of these things, and so these are kind

516
00:26:39,596 --> 00:26:42,716
Speaker 3: of these are problems and deep kind of issues of

517
00:26:43,116 --> 00:26:46,436
Speaker 3: humanity that I think are never going to quite go

518
00:26:46,476 --> 00:26:48,276
Speaker 3: away no matter what the regulations say.

519
00:26:48,796 --> 00:26:51,716
Speaker 4: Yeah, look, there are two categories. One is there may

520
00:26:51,716 --> 00:26:54,556
Speaker 4: be cases where it is in your financial interest to

521
00:26:54,676 --> 00:26:57,556
Speaker 4: throw a game, right, one preventative measure is just paying

522
00:26:57,556 --> 00:27:00,636
Speaker 4: everybody really well, including the umpires by the way, where

523
00:27:00,636 --> 00:27:03,636
Speaker 4: it's kind of on the surface irrational for you to

524
00:27:03,716 --> 00:27:07,476
Speaker 4: gamble at that point, although sometimes people gamble for irrational reasons.

525
00:27:07,476 --> 00:27:08,956
Speaker 4: For me, one thing you always remind me of is

526
00:27:08,956 --> 00:27:12,196
Speaker 4: that like most con artists are not motivated strictly by money.

527
00:27:12,316 --> 00:27:15,756
Speaker 3: Yes, absolutely true. Something I also remind you of, Nate,

528
00:27:15,836 --> 00:27:18,716
Speaker 3: is that even though most con artists are not motivated

529
00:27:18,716 --> 00:27:21,876
Speaker 3: by money, most people are not con artists. And so

530
00:27:21,956 --> 00:27:24,236
Speaker 3: I think that that's a more hopeful way to end

531
00:27:24,276 --> 00:27:28,076
Speaker 3: this segment. That most athletes are also, you know, not

532
00:27:28,156 --> 00:27:32,076
Speaker 3: degenerate gamblers, not con artists, and going to be in

533
00:27:32,156 --> 00:27:34,356
Speaker 3: the sport for the right reason. They want to excel,

534
00:27:34,596 --> 00:27:36,476
Speaker 3: they want to do well, they don't want to throw

535
00:27:36,516 --> 00:27:57,956
Speaker 3: the game. We'll be back in a minute. So recently

536
00:27:58,556 --> 00:28:01,756
Speaker 3: we've seen a resurgence of a stock that we haven't

537
00:28:01,796 --> 00:28:04,356
Speaker 3: heard talked about for a few years now, game Stop

538
00:28:04,916 --> 00:28:11,196
Speaker 3: because Roaring Kitty aka Keith Gill is back. And for

539
00:28:11,236 --> 00:28:14,676
Speaker 3: those of you who followed the game Stop short squeeze

540
00:28:15,036 --> 00:28:19,636
Speaker 3: several years ago, Roaring Kitty was kind of the big

541
00:28:19,716 --> 00:28:23,756
Speaker 3: force that had game Stop just go on an unprecedented

542
00:28:23,916 --> 00:28:27,516
Speaker 3: run and put some very famous hedge funds out of

543
00:28:27,556 --> 00:28:31,956
Speaker 3: business and ended up, you know, having this just insane

544
00:28:32,076 --> 00:28:35,876
Speaker 3: impact on the markets. And then Keith Gill Roaring Kitty

545
00:28:35,916 --> 00:28:39,916
Speaker 3: went silent, and a few weeks ago, all of a sudden,

546
00:28:39,956 --> 00:28:43,236
Speaker 3: for the first time, this dormant account started posting memes

547
00:28:43,796 --> 00:28:48,836
Speaker 3: and what happened. Game Stop is back, Baby. The stock

548
00:28:49,036 --> 00:28:53,356
Speaker 3: just went through the roof once again, and Roaring Kitty

549
00:28:53,396 --> 00:28:57,636
Speaker 3: has since made more posts and shown his own holdings,

550
00:28:57,676 --> 00:29:02,476
Speaker 3: including over one hundred million in game Stop stock. And

551
00:29:02,996 --> 00:29:06,156
Speaker 3: the markets are reacting, and game Stop is reacting, the

552
00:29:06,236 --> 00:29:09,116
Speaker 3: SEC is reacting, lots of players are reacting to this

553
00:29:09,436 --> 00:29:13,116
Speaker 3: and trying to figure out what's going on. Is it legal?

554
00:29:13,236 --> 00:29:15,756
Speaker 3: Kind of what are the repercussions of this? Nate, is

555
00:29:15,756 --> 00:29:17,116
Speaker 3: this something that you've been following?

556
00:29:18,556 --> 00:29:21,276
Speaker 4: I wrote about GameStop a little bit in my book

557
00:29:22,596 --> 00:29:26,276
Speaker 4: from the standpoint of game theory. Actually, so, Maria, maybe

558
00:29:26,276 --> 00:29:28,716
Speaker 4: we should actually talk about some of the game theory

559
00:29:28,756 --> 00:29:31,516
Speaker 4: behind shit coins and meme stocks.

560
00:29:31,756 --> 00:29:33,556
Speaker 3: Yeah, I think that's a great idea, Nate, because I

561
00:29:33,556 --> 00:29:36,036
Speaker 3: do think that that's central to this conversation.

562
00:29:36,436 --> 00:29:40,796
Speaker 4: And the meming part of it me is actually very

563
00:29:40,836 --> 00:29:43,956
Speaker 4: central to how the game theory works, believe it or not.

564
00:29:44,196 --> 00:29:48,316
Speaker 4: Like to simplify a bit, typically, what you have is,

565
00:29:48,396 --> 00:29:52,236
Speaker 4: let's say you have like an overvalued asset. In principle,

566
00:29:52,796 --> 00:29:57,036
Speaker 4: people who own that asset could sort of literally conspire

567
00:29:57,236 --> 00:30:00,596
Speaker 4: or collude to keep the asset at an artificial value.

568
00:30:00,636 --> 00:30:04,076
Speaker 4: As long as nobody sells, right, then it maintains at

569
00:30:04,156 --> 00:30:06,996
Speaker 4: least nominally its value, or maybe it keeps going up

570
00:30:07,036 --> 00:30:08,916
Speaker 4: if everyone is being like total hold on for dear

571
00:30:08,956 --> 00:30:11,276
Speaker 4: life and wants to kind of boost the asset further.

572
00:30:11,716 --> 00:30:14,236
Speaker 4: So the problem with that is that like you have,

573
00:30:14,676 --> 00:30:18,596
Speaker 4: in game theory terms, a prisoner's dilemma where every party.

574
00:30:18,316 --> 00:30:21,516
Speaker 1: Has a strong incentive to defect.

575
00:30:21,756 --> 00:30:27,756
Speaker 4: Right if game Stop is priced at fifty dollars when

576
00:30:27,836 --> 00:30:31,196
Speaker 4: the fundamentals price should be two dollars or something like that,

577
00:30:31,276 --> 00:30:34,916
Speaker 4: a share, you really have a strong incentive to get

578
00:30:34,916 --> 00:30:37,756
Speaker 4: out while you can and take your profits. That could

579
00:30:37,756 --> 00:30:43,556
Speaker 4: trigger a collapse in the share price. However, due to

580
00:30:43,596 --> 00:30:46,996
Speaker 4: the power of means a sort of coordination is possible

581
00:30:47,156 --> 00:30:50,516
Speaker 4: in the prisoner's dilemma. This is what happens when Maria,

582
00:30:50,596 --> 00:30:54,596
Speaker 4: let's say you and I commit a crime and we're

583
00:30:54,636 --> 00:30:57,516
Speaker 4: in separate jail, says, I don't know what's the most

584
00:30:57,556 --> 00:30:58,836
Speaker 4: likely crime we were to commit.

585
00:30:59,756 --> 00:31:01,476
Speaker 3: I don't want to speculate on this night. You and

586
00:31:01,516 --> 00:31:04,876
Speaker 3: I are complete. Maybe we're not going any crimes ever,

587
00:31:05,236 --> 00:31:06,396
Speaker 3: So let's.

588
00:31:06,236 --> 00:31:10,196
Speaker 4: Say we kidnapped Justice sonya sort of mayor okay, okay,

589
00:31:10,236 --> 00:31:13,316
Speaker 4: that would be a pretty serious crimes. But let's say

590
00:31:13,316 --> 00:31:15,836
Speaker 4: the government is having trouble proving it, and therefore we

591
00:31:15,876 --> 00:31:18,916
Speaker 4: are in separate prison cells, and the government says, well,

592
00:31:19,916 --> 00:31:23,796
Speaker 4: you can confess to the crime and get a lower sentence,

593
00:31:23,876 --> 00:31:26,956
Speaker 4: or you can remain silent, and we'll see what happens.

594
00:31:27,036 --> 00:31:30,836
Speaker 4: Right now, if neither of us were to confess the

595
00:31:30,836 --> 00:31:33,316
Speaker 4: way this works, we would kind of get like a

596
00:31:33,396 --> 00:31:35,556
Speaker 4: slap on the risk because the government can't really prove

597
00:31:35,596 --> 00:31:38,556
Speaker 4: its case. But the game theory is such that not

598
00:31:38,636 --> 00:31:41,796
Speaker 4: being able to coordinate on our strategy, we both wind

599
00:31:41,876 --> 00:31:44,476
Speaker 4: up stitching on one another and wind up getting a

600
00:31:44,516 --> 00:31:47,476
Speaker 4: worse sentence as a result. It's kind of the very simplified,

601
00:31:47,516 --> 00:31:50,956
Speaker 4: podcast friendly version of the prisoner's dilemma if we could

602
00:31:51,036 --> 00:31:54,836
Speaker 4: coordinate though. I went to a Prediction markets conference this

603
00:31:54,876 --> 00:31:58,276
Speaker 4: weekend in California where a guy had a T shirt

604
00:31:58,276 --> 00:32:01,916
Speaker 4: on saying I cooperate in the Prisoner's dilemma, meaning that

605
00:32:01,996 --> 00:32:03,716
Speaker 4: if we can single to one another, that we are

606
00:32:03,716 --> 00:32:07,316
Speaker 4: cooperating and this is great. Yeah, this is what happens

607
00:32:07,596 --> 00:32:10,916
Speaker 4: in situations like the internet. Right, if you're like, we're

608
00:32:10,956 --> 00:32:13,276
Speaker 4: all of this together against a stupid hedge fund, against

609
00:32:13,316 --> 00:32:16,796
Speaker 4: Wall Street and inherently a stock like AMC Theaters or

610
00:32:16,876 --> 00:32:19,196
Speaker 4: game Stop is like, it's kind of a joke, right,

611
00:32:19,236 --> 00:32:22,556
Speaker 4: These are like kind of Blockbuster video dinosaur companies.

612
00:32:22,756 --> 00:32:23,676
Speaker 1: It's kind of funny.

613
00:32:23,676 --> 00:32:27,396
Speaker 4: And the fact that like that through Matt Levine, the

614
00:32:27,596 --> 00:32:30,996
Speaker 4: economics writer for Bloomberg, calls it the meme theory of value.

615
00:32:31,156 --> 00:32:34,316
Speaker 4: You are kind of literally creating something out of nothing.

616
00:32:34,716 --> 00:32:36,916
Speaker 3: Yeah. So I think that we have some bigger questions

617
00:32:36,916 --> 00:32:40,236
Speaker 3: here though, that are like much bigger than Roaring Kitty

618
00:32:40,556 --> 00:32:43,396
Speaker 3: and is more about like the roaring kitties of the world. Right,

619
00:32:43,436 --> 00:32:45,876
Speaker 3: so this you know, what happened in twenty twenty one,

620
00:32:46,196 --> 00:32:49,476
Speaker 3: totally unprecedented. What's happening right now shows that this is

621
00:32:49,476 --> 00:32:53,596
Speaker 3: a thing that might actually not be so one off, right,

622
00:32:53,636 --> 00:32:56,956
Speaker 3: It might actually be repeating, and we might be in

623
00:32:56,996 --> 00:32:59,956
Speaker 3: a position where kind of meme stocks, shit coins, these

624
00:32:59,996 --> 00:33:02,956
Speaker 3: types of things really do have an impact on the

625
00:33:02,956 --> 00:33:07,636
Speaker 3: broader financial markets that we see these degrees of irrationality

626
00:33:07,756 --> 00:33:11,276
Speaker 3: or is it irrational that are playing out in the

627
00:33:11,276 --> 00:33:14,516
Speaker 3: broader stock market, where people in kind of the traditional

628
00:33:14,716 --> 00:33:17,796
Speaker 3: market analysis are going to have to look at this

629
00:33:17,876 --> 00:33:20,676
Speaker 3: differently and try to figure out has the world changed?

630
00:33:20,996 --> 00:33:22,836
Speaker 3: Do we need to change how we think about this?

631
00:33:23,196 --> 00:33:24,796
Speaker 3: You know, do we need to change where we think

632
00:33:24,836 --> 00:33:27,716
Speaker 3: the dumb money is or how it operates, or whether

633
00:33:27,756 --> 00:33:30,436
Speaker 3: it's actually dumb? And I think that these are really

634
00:33:30,476 --> 00:33:34,396
Speaker 3: important questions, especially as crypto becomes a much bigger world

635
00:33:34,756 --> 00:33:40,116
Speaker 3: and memes are the universal language. In some ways, these

636
00:33:40,116 --> 00:33:42,276
Speaker 3: are things that just did not exist in the stock

637
00:33:42,316 --> 00:33:44,516
Speaker 3: market or in the financial markets in the past.

638
00:33:45,116 --> 00:33:46,996
Speaker 4: Yeah, look, it's a little bit of a blow to

639
00:33:47,076 --> 00:33:52,076
Speaker 4: kind of efficient market hypothesis. Clearly, stocks like AMC or

640
00:33:52,196 --> 00:33:55,276
Speaker 4: GameStop are unmorried from any notion of kind of the

641
00:33:55,316 --> 00:33:58,356
Speaker 4: fundamental values. Although with that said, like a lot of

642
00:33:58,396 --> 00:34:01,276
Speaker 4: things are kind of in the eye of a beholder.

643
00:34:02,196 --> 00:34:03,276
Speaker 1: You know why.

644
00:34:03,076 --> 00:34:05,836
Speaker 4: Everyone thinks that, like a Picasso or a or a

645
00:34:05,916 --> 00:34:08,516
Speaker 4: Keith Herring or whatever else. You know, why are those

646
00:34:08,596 --> 00:34:11,156
Speaker 4: works of our valuable? I mean, often I think they

647
00:34:11,156 --> 00:34:15,036
Speaker 4: do have esthetic value, but it's inherently kind of subjective.

648
00:34:15,236 --> 00:34:17,476
Speaker 4: It speaks to, I think the kind of maybe inherent

649
00:34:18,156 --> 00:34:21,396
Speaker 4: unpredictability of the modern world. It speaks a little bit

650
00:34:21,436 --> 00:34:25,116
Speaker 4: to like the way that these kind of faceless, leaderless

651
00:34:25,316 --> 00:34:27,436
Speaker 4: internet mobs, because royn Kitty is not like.

652
00:34:27,476 --> 00:34:29,476
Speaker 1: Using explicit instructions.

653
00:34:29,476 --> 00:34:32,916
Speaker 4: He's just kind of communicating through through memes and vibes

654
00:34:32,916 --> 00:34:35,956
Speaker 4: and people kind of infer what he's saying, and it

655
00:34:36,036 --> 00:34:37,876
Speaker 4: kind of starts to chain a momentum that kind of

656
00:34:38,156 --> 00:34:41,036
Speaker 4: can sustain itself for some period of time. And can

657
00:34:41,076 --> 00:34:42,716
Speaker 4: you time it well enough that you kind.

658
00:34:42,596 --> 00:34:44,516
Speaker 1: Of get out before the bubble inevitably bursts?

659
00:34:45,316 --> 00:34:48,676
Speaker 3: Yeah? And is this something that is going to be replicable? Right?

660
00:34:49,116 --> 00:34:51,836
Speaker 3: I think that I think that that's another question because

661
00:34:52,076 --> 00:34:54,196
Speaker 3: I think other people have tried to be Roaring Kitty

662
00:34:54,516 --> 00:34:57,996
Speaker 3: and have failed. But I do think that, you know,

663
00:34:58,076 --> 00:35:01,716
Speaker 3: there is irrationality in the stock markets in general, and

664
00:35:01,796 --> 00:35:05,396
Speaker 3: always has been one of my favorite quotes from Daniel Konneman,

665
00:35:05,436 --> 00:35:09,636
Speaker 3: who won the Nobel Prize in Economics for his work

666
00:35:09,676 --> 00:35:13,396
Speaker 3: on kind of biases and irrationality. He consulted for a

667
00:35:13,396 --> 00:35:15,716
Speaker 3: bunch of hedge funds and he came to the conclusion

668
00:35:16,236 --> 00:35:20,316
Speaker 3: that basically traders were gambling. They were not playing poker.

669
00:35:21,076 --> 00:35:23,796
Speaker 3: And he said that poker players are you know, much more,

670
00:35:23,916 --> 00:35:26,796
Speaker 3: much more rational and can actually, you know, you can

671
00:35:26,836 --> 00:35:28,956
Speaker 3: figure out who the winning players are, where the edge is,

672
00:35:28,996 --> 00:35:31,596
Speaker 3: et cetera. Gambling. If you're just gambling in a casino,

673
00:35:31,676 --> 00:35:33,356
Speaker 3: you can't. And he said, what you guys are doing

674
00:35:33,436 --> 00:35:35,916
Speaker 3: is gambling. And no one listened to him, and they

675
00:35:35,916 --> 00:35:38,676
Speaker 3: thought that he was, you know, just full of it,

676
00:35:39,076 --> 00:35:41,756
Speaker 3: and so they didn't take any of his recommendations to heart.

677
00:35:42,636 --> 00:35:44,716
Speaker 3: And but I think that that's a really kind of

678
00:35:44,836 --> 00:35:49,716
Speaker 3: important insight that this is not necessarily counter to how

679
00:35:49,756 --> 00:35:51,836
Speaker 3: a lot of decision making in the stock markets has

680
00:35:51,876 --> 00:35:55,516
Speaker 3: worked in the past. It's just a new element, a

681
00:35:55,556 --> 00:35:58,356
Speaker 3: new world, and kind of putting some of the stuff

682
00:35:58,396 --> 00:36:00,556
Speaker 3: on steroids, right, blowing it up in a way that

683
00:36:00,596 --> 00:36:03,796
Speaker 3: it hasn't been blown up before, and potentially kind of

684
00:36:04,196 --> 00:36:06,236
Speaker 3: making that exponentially more powerful.

685
00:36:06,796 --> 00:36:10,276
Speaker 4: Maria, I'm not I'm not one to like dispute too

686
00:36:10,356 --> 00:36:12,356
Speaker 4: much the late Daniel Conneman.

687
00:36:12,476 --> 00:36:15,316
Speaker 3: Right, Well, that's why that's why I consulted, right, Okay,

688
00:36:15,716 --> 00:36:18,076
Speaker 3: that's why I couched my views with Danny Connoman, right,

689
00:36:18,076 --> 00:36:19,956
Speaker 3: because I know that you can disagree with me, but

690
00:36:20,036 --> 00:36:23,116
Speaker 3: he's he's harder to disagree with. Please continue.

691
00:36:24,836 --> 00:36:28,076
Speaker 4: I don't know, like I, when you have like the

692
00:36:28,236 --> 00:36:34,516
Speaker 4: practice of like actual traders betting millions of dollars versus academics,

693
00:36:34,636 --> 00:36:39,396
Speaker 4: even academics as smart as Daniel Conneman, I'm not sure

694
00:36:39,396 --> 00:36:43,316
Speaker 4: I take the academic side. I think it's really easy

695
00:36:43,316 --> 00:36:46,436
Speaker 4: to like come to some theoical conclusion when you don't

696
00:36:46,476 --> 00:36:50,756
Speaker 4: have skin in the game that might not be robust necessarily.

697
00:36:51,036 --> 00:36:53,436
Speaker 4: I talked to a guy named John Coates for my book,

698
00:36:53,436 --> 00:36:58,036
Speaker 4: who is a former trader turned neuroscientists, and he actually

699
00:36:58,036 --> 00:36:59,796
Speaker 4: thought when he was working on desks at Wall Street

700
00:36:59,836 --> 00:37:02,836
Speaker 4: that the traders didn't take enough risk. It's hard to

701
00:37:02,836 --> 00:37:05,956
Speaker 4: get people to be properly, properly risk adjusted until they

702
00:37:06,036 --> 00:37:07,596
Speaker 4: kind of had a winning streak. Then they got all

703
00:37:07,636 --> 00:37:10,396
Speaker 4: this testosteron anotherchemicals run around the brain and come like

704
00:37:10,436 --> 00:37:13,276
Speaker 4: feral animals and go kind of crazy, right, And that's

705
00:37:13,356 --> 00:37:17,676
Speaker 4: kind of what can cause bubbles. But yeah, look, I

706
00:37:17,676 --> 00:37:21,916
Speaker 4: mean because there's kind of two forms of efficient market hypothesis, right.

707
00:37:21,916 --> 00:37:26,036
Speaker 4: There's kind of like the hard form that, yes, stocks

708
00:37:26,076 --> 00:37:32,076
Speaker 4: actually do represent a probabilistic discounted projection of future corporate earnings,

709
00:37:32,476 --> 00:37:34,596
Speaker 4: Like that's clearly not true when it comes to something

710
00:37:34,676 --> 00:37:39,116
Speaker 4: like game stop. The softer form is just that, Okay,

711
00:37:39,476 --> 00:37:41,876
Speaker 4: you think you can beat the market, go ahead and try.

712
00:37:42,316 --> 00:37:45,916
Speaker 4: You might understand that like, yes, gamestopers over valued, but

713
00:37:45,996 --> 00:37:48,956
Speaker 4: good luck in trying to time exactly kind of win

714
00:37:48,996 --> 00:37:50,636
Speaker 4: that bubble bursts.

715
00:37:50,996 --> 00:37:55,556
Speaker 3: Yeah, and I think that the bigger point here when

716
00:37:55,556 --> 00:37:58,436
Speaker 3: you said that anyone can try, And something that I

717
00:37:58,436 --> 00:38:00,716
Speaker 3: think Conoman was trying to get at is that, of

718
00:38:00,796 --> 00:38:02,996
Speaker 3: course there are traders and there are certain investors who

719
00:38:02,996 --> 00:38:05,396
Speaker 3: can beat the markets, right, there are people who are

720
00:38:05,756 --> 00:38:08,316
Speaker 3: very good at this, who kind of understand, who analyze well,

721
00:38:08,356 --> 00:38:11,276
Speaker 3: who have the right data, right approach, whatever it is.

722
00:38:12,636 --> 00:38:16,116
Speaker 3: But that's not true for the majority. But if you

723
00:38:16,156 --> 00:38:19,476
Speaker 3: talk to anyone individual, they always think that they're the

724
00:38:19,516 --> 00:38:22,156
Speaker 3: ones who are who are actually more rational and can

725
00:38:22,236 --> 00:38:24,836
Speaker 3: beat the markets and are making better decisions. And I

726
00:38:24,876 --> 00:38:28,556
Speaker 3: think that that's just an overall human flaw.

727
00:38:29,476 --> 00:38:31,716
Speaker 4: Yeah, Look, if ten percent of people in the world

728
00:38:31,716 --> 00:38:34,076
Speaker 4: are the truly rational ones, there's no guarantee that you're

729
00:38:34,076 --> 00:38:36,916
Speaker 4: in the ten percent. The correlation, like self perception and

730
00:38:36,956 --> 00:38:40,436
Speaker 4: reality is probably probably fairly discordant sometimes.

731
00:38:40,876 --> 00:38:43,436
Speaker 3: Yeah, and I think that that's just something that's very

732
00:38:43,476 --> 00:38:46,556
Speaker 3: important to remember, whether you're a roaring kitty, whether you're

733
00:38:46,556 --> 00:38:50,076
Speaker 3: one of the portfolio managers who is on the other

734
00:38:50,196 --> 00:38:54,476
Speaker 3: side and short game stop, or whether you're someone who's

735
00:38:54,476 --> 00:38:57,276
Speaker 3: just an outside observer thinking how do I get in

736
00:38:57,316 --> 00:39:08,036
Speaker 3: on this in the future and make a killing. You

737
00:39:08,116 --> 00:39:11,516
Speaker 3: and I have to totally switched positions this week, Knate,

738
00:39:11,676 --> 00:39:14,516
Speaker 3: because last week when we were recording, I was in

739
00:39:14,556 --> 00:39:17,076
Speaker 3: New Haven about to go to Ireland and you were

740
00:39:17,196 --> 00:39:19,956
Speaker 3: deep in the World Series. And now I am finally

741
00:39:19,996 --> 00:39:23,156
Speaker 3: back in Vegas and you are back in New York City,

742
00:39:23,436 --> 00:39:28,556
Speaker 3: so we have swapped. And unfortunately I'm not making a

743
00:39:28,556 --> 00:39:30,676
Speaker 3: deep run. I've played exactly one event since I've been

744
00:39:30,716 --> 00:39:34,716
Speaker 3: back and I busted. So that didn't that didn't go

745
00:39:34,716 --> 00:39:37,796
Speaker 3: according to plan, and I'll play again today. But you

746
00:39:37,996 --> 00:39:40,796
Speaker 3: managed to go deep in a second event that was

747
00:39:40,956 --> 00:39:45,436
Speaker 3: not the event that we were talking about, So congratulations.

748
00:39:44,756 --> 00:39:47,516
Speaker 4: Thank you, although it ended in a very disappointing way.

749
00:39:47,556 --> 00:39:49,396
Speaker 4: This was that five thousand dollars in a limit hold

750
00:39:49,436 --> 00:39:50,636
Speaker 4: them event number sixteen.

751
00:39:51,476 --> 00:39:52,396
Speaker 3: That's a big deal name.

752
00:39:52,516 --> 00:39:54,836
Speaker 4: I finished in eighteenth place out of eight hundred and

753
00:39:54,836 --> 00:39:55,676
Speaker 4: something runners.

754
00:39:55,796 --> 00:39:58,316
Speaker 3: However, congratulations, thank you, Maria.

755
00:39:58,756 --> 00:40:02,116
Speaker 4: I still am mildly heartbroken about it because.

756
00:40:02,236 --> 00:40:04,476
Speaker 3: You wont dolences congratulate.

757
00:40:04,516 --> 00:40:09,836
Speaker 4: Adolence is like the most common poker emotion basically, so

758
00:40:09,876 --> 00:40:13,236
Speaker 4: I kind of lost on a bad beat, which I'm

759
00:40:13,236 --> 00:40:15,516
Speaker 4: not gonna dwell on. I saw your new substack post

760
00:40:15,556 --> 00:40:18,596
Speaker 4: Marie about like players complaining about bad beats. But basically

761
00:40:18,636 --> 00:40:22,276
Speaker 4: I had pocket fives against jack ten offsuit on a

762
00:40:22,316 --> 00:40:26,436
Speaker 4: board of jack ten five, So I had a set.

763
00:40:26,676 --> 00:40:28,876
Speaker 4: My opponent had the kind of next best time that

764
00:40:28,956 --> 00:40:32,316
Speaker 4: isn't a set, which is jack ten for two pair. Unfortunately,

765
00:40:32,396 --> 00:40:34,876
Speaker 4: a jacket on the turn, and so this dude, by

766
00:40:34,916 --> 00:40:37,796
Speaker 4: the way, won the fucking event. I think I deserved

767
00:40:37,916 --> 00:40:39,076
Speaker 4: like half his prize pool.

768
00:40:39,116 --> 00:40:41,116
Speaker 1: Basically, it was an.

769
00:40:40,996 --> 00:40:43,316
Speaker 3: Awesome Nate, by the way, if it worked that way,

770
00:40:43,436 --> 00:40:44,716
Speaker 3: that would be a great role.

771
00:40:44,836 --> 00:40:46,916
Speaker 4: You like tag the chips that you have equity in.

772
00:40:47,716 --> 00:40:49,516
Speaker 4: I'm not complaining about this past.

773
00:40:49,556 --> 00:40:52,956
Speaker 3: Year, Yes, you are just just acknowledged that you're complaining

774
00:40:52,996 --> 00:40:54,276
Speaker 3: about the bad beat and move on.

775
00:40:54,876 --> 00:40:57,076
Speaker 4: We cover important news the worlds. There is a poker

776
00:40:57,076 --> 00:40:59,636
Speaker 4: and part of the news is that a player who

777
00:40:59,636 --> 00:41:01,516
Speaker 4: had a lot of chips was eliminated in eighteenth place,

778
00:41:01,836 --> 00:41:08,476
Speaker 4: you know, conveying the news, all right, hows my reporting

779
00:41:08,556 --> 00:41:12,636
Speaker 4: suggests player got very lucky at several earlier points in

780
00:41:12,716 --> 00:41:15,276
Speaker 4: this tournament. For example, this player had pocket queens all

781
00:41:15,316 --> 00:41:18,916
Speaker 4: against all against aces and and the queen's won. This

782
00:41:18,996 --> 00:41:22,476
Speaker 4: player had pocket tens almost all all in against pocket

783
00:41:23,076 --> 00:41:25,076
Speaker 4: kings and the tens one for example.

784
00:41:25,516 --> 00:41:32,836
Speaker 3: So player mister Nathaniel Silver got got ridiculously lucky to

785
00:41:32,916 --> 00:41:36,396
Speaker 3: even get to the point where his set could be cracked.

786
00:41:36,636 --> 00:41:40,076
Speaker 3: All right, So so let's reframe that as god beats

787
00:41:40,076 --> 00:41:43,316
Speaker 3: are good now, but you did you did bust in

788
00:41:43,436 --> 00:41:45,436
Speaker 3: unfortunate circumstances.

789
00:41:45,756 --> 00:41:48,956
Speaker 4: Uh, Maria, what about what about Europe? How's the series

790
00:41:48,956 --> 00:41:49,396
Speaker 4: gone for you?

791
00:41:49,436 --> 00:41:49,716
Speaker 1: So far?

792
00:41:49,836 --> 00:41:50,836
Speaker 3: My update sucks?

793
00:41:51,316 --> 00:41:57,076
Speaker 4: Oh no? Are you are you over? I?

794
00:41:57,316 --> 00:42:00,796
Speaker 3: Well no, my first event I won the ten k bounties,

795
00:42:00,836 --> 00:42:06,676
Speaker 3: so it's pretty good. Yeah, so together, but otherwise zero cashes.

796
00:42:07,276 --> 00:42:11,196
Speaker 4: It's the line between successes and is soaked in in poker,

797
00:42:11,236 --> 00:42:13,356
Speaker 4: by the way, because like the first week into it,

798
00:42:13,396 --> 00:42:16,236
Speaker 4: I had like one mini cash out of and like, no,

799
00:42:16,316 --> 00:42:17,996
Speaker 4: it's like, oh, I'm having a really great world series.

800
00:42:18,276 --> 00:42:20,556
Speaker 4: You know, it's all pretty fucking arbitrary, and it all

801
00:42:20,596 --> 00:42:22,436
Speaker 4: it all. I mean, it doesn't necessarily even out. It's

802
00:42:22,476 --> 00:42:24,956
Speaker 4: like the Gambler's fallacy. But like over long rain.

803
00:42:25,116 --> 00:42:27,036
Speaker 3: Thanks for reading my substeck Natee.

804
00:42:29,756 --> 00:42:32,356
Speaker 4: Read Maria subsec she needs revenue now to make up

805
00:42:32,356 --> 00:42:33,276
Speaker 4: for her poker losses.

806
00:42:33,276 --> 00:42:37,236
Speaker 3: Folks, Yes, because the my update sucks is because the

807
00:42:37,236 --> 00:42:39,596
Speaker 3: one event I played was a twenty five thousand dollars

808
00:42:39,636 --> 00:42:41,796
Speaker 3: by an event and I did not cash in it.

809
00:42:42,116 --> 00:42:44,396
Speaker 3: So I went from being flat for the World Series

810
00:42:44,436 --> 00:42:46,796
Speaker 3: to being down twenty five thousand dollars.

811
00:42:47,516 --> 00:42:50,796
Speaker 4: Maybe if you concentrated more on the poker or not

812
00:42:50,876 --> 00:42:53,076
Speaker 4: your newsletter, Maria, you wouldn't have busted out.

813
00:42:53,316 --> 00:42:55,356
Speaker 3: But I feel like I own it, owe it to

814
00:42:55,436 --> 00:42:57,396
Speaker 3: my fans, and my newsletter is about all the things

815
00:42:57,476 --> 00:42:59,436
Speaker 3: I did wrong or other people did wrong, so that

816
00:42:59,476 --> 00:43:02,036
Speaker 3: I played better, And today is the day we change

817
00:43:02,116 --> 00:43:04,316
Speaker 3: all of that so that next week when we're recording,

818
00:43:04,516 --> 00:43:07,636
Speaker 3: we can talk about my deep run. How's that for optimism.

819
00:43:07,876 --> 00:43:21,076
Speaker 3: It's a deal, all right, let's do it. That's it

820
00:43:21,156 --> 00:43:24,716
Speaker 3: for today. We have already been getting some listener questions,

821
00:43:24,756 --> 00:43:28,116
Speaker 3: which is amazing. Please keep them coming. We want to

822
00:43:28,116 --> 00:43:30,436
Speaker 3: hear from you, and we will be addressing some of

823
00:43:30,436 --> 00:43:34,436
Speaker 3: the questions in segments on our podcast going forward. We

824
00:43:34,556 --> 00:43:37,156
Speaker 3: even have an email address for you to use. Now

825
00:43:37,356 --> 00:43:43,956
Speaker 3: it's just Risky Business one word at pushkin dot fm.

826
00:43:42,956 --> 00:43:44,956
Speaker 4: And don't forget to rate and review the show. We

827
00:43:44,996 --> 00:43:46,356
Speaker 4: will not tell you which day and the gift, but

828
00:43:46,396 --> 00:43:48,676
Speaker 4: you can probably infer which ones we like more.

829
00:43:50,316 --> 00:43:53,476
Speaker 3: Risky Business is hosted by me Maria Kanakova and me

830
00:43:53,716 --> 00:43:57,156
Speaker 3: Mate Silver. The show is a co production of Pushkin

831
00:43:57,236 --> 00:44:01,796
Speaker 3: Industries and iHeartMedia. This episode was produced by Isabelle Carter.

832
00:44:02,156 --> 00:44:06,036
Speaker 3: Our associate producer is Gabriel Hunter Chang. Our executive producer

833
00:44:06,076 --> 00:44:06,956
Speaker 3: is Jacob Goldstein.

834
00:44:07,196 --> 00:44:09,596
Speaker 4: And if you want to listen to an ad free version,

835
00:44:09,596 --> 00:44:12,236
Speaker 4: signed up for Pushkin Plus for six thirty nine a month.

836
00:44:12,476 --> 00:44:15,476
Speaker 4: You get access to ad free listening. Thanks for tuning in.