Speaker 1: Pushkin. Hey everyone, welcome back to Risky Business, a show
Speaker 1: about making better decisions. I'm Maria Kanikova and.
Speaker 2: I'm Nate Silver. Today we have a lot to get into.
Speaker 2: We are literally hours away and across the street from
Speaker 2: the World Chairs of Poker.
Speaker 3: We'll talk about that.
Speaker 1: We'll also be talking about some huge news in the cryptosphere.
Speaker 1: The approval of the eth ETFs and crypto is something
Speaker 1: that is very firmly in the realm of Risky Business,
Speaker 1: even though we haven't talked about it yet on the show.
Speaker 2: And finally, inspired by an unexpected detour, I took to Buffalo,
Speaker 2: New York on the way into Las Vegas. We'll talk
Speaker 2: about new rules by the Department of Presportation governing compensation
Speaker 2: ref your flight is late and how that might affect
Speaker 2: the risk taking behavior of both passengers and airlines.
Speaker 1: Yes, I'm looking forward to that one night, because my
Speaker 1: flight was also very very late.
Speaker 3: You did not end up in Buffalo.
Speaker 1: I did not end up in Buffalo.
Speaker 3: Name and Buffalo, Maria.
Speaker 4: Okay, Okay, Buffalo.
Speaker 1: You win this one, and I look forward to getting
Speaker 1: into it. At the end of the show. Let's begin, though,
Speaker 1: with the fact that we both got here So we
Speaker 1: are both in fabulous Las Vegas for the opening of
Speaker 1: the World Series of Poker, and we are taping this
Speaker 1: on Tuesday, May twenty eighth, which is literally the opening
Speaker 1: day of the World Series, and you and I will
Speaker 1: both be playing the first opening event, which is a
Speaker 1: five thousand dollars players Championship, which is exciting and I mean,
Speaker 1: I'm excited. Are you excited?
Speaker 2: Night, Yeah, I've never actually been here for the exact
Speaker 2: start of the World Series before. It's it's a lot
Speaker 2: better than the end, right we were there till the
Speaker 2: bitter end last year. The end is kind of depressing.
Speaker 2: They're like literally tearing the building down. The beginning, everyone's
Speaker 2: bank rolls are full, everybody he's in a good mood.
Speaker 2: This is a new event this year to start out
Speaker 2: with a five K. Usually it's something smaller. I'll be
Speaker 2: curious to see what type of field it draws. Usually
Speaker 2: five K is like high enough that the amateur players
Speaker 2: are a little bit just waited by it. But it's
Speaker 2: the first time bank rolls, it's the first event. I
Speaker 2: think some of the pros from Europe are taking their
Speaker 2: time and getting here, so it might be a pretty
Speaker 2: good field.
Speaker 3: We will see.
Speaker 1: Yeah, So for anyone who wants to join us this summer,
Speaker 1: or anyone who is just thinking about doing the World
Speaker 1: Series or something that is kind of this sort of
Speaker 1: marathon experience where you have to keep making good, risky
Speaker 1: decisions over and over and over. It doesn't even have
Speaker 1: to be poker. Nate and I have both come up
Speaker 1: with our top three tips for dealing with a situation
Speaker 1: like this, and we're going to be talking about it
Speaker 1: in the context of the World Series, but I do
Speaker 1: want to always keep in mind that it can be
Speaker 1: abstracted to other decision making situations. And we don't know
Speaker 1: each other's top tips. So I'm going to start, and
Speaker 1: you know, we're going to go one at a time
Speaker 1: and throw out one tip and these are actually in
Speaker 1: our order of importance, and react and see whether we're
Speaker 1: thinking about this in the same way or in very
Speaker 1: different ways. It would be very fun either way. And
Speaker 1: like I said, we have no idea what the other
Speaker 1: person is going to say, although I have more idea
Speaker 1: than Nate, because Nate did have a list of his
Speaker 1: top twenty one tips for the World Series on his newsletter,
Speaker 1: so there's that. But he's seen nothing from me, But
Speaker 1: actually I wrote a book about it, so maybe he
Speaker 1: has some idea too. All Right, my top tip would
Speaker 1: be number one, take care of yourself. People are here
Speaker 1: to play poker and they get super excited. I'm really excited,
Speaker 1: and they forget the basics like get exercise, get sleep,
Speaker 1: and eat good food and buy good food. I don't
Speaker 1: mean like food that you're going to be like, oh yeah,
Speaker 1: this is delicious. I mean actually nourishing food that's good
Speaker 1: for your brain, good for you decision making, and there's
Speaker 1: a lot of science on this. All of these things
Speaker 1: matter when you're trying to make good decisions. If you
Speaker 1: haven't slept well, your decision making capacity is going to
Speaker 1: go downhill. If you've been inside all day, if you
Speaker 1: haven't been moving, if you haven't exercised, if you haven't
Speaker 1: gotten that blood flow going, your decision making capacity is
Speaker 1: going to go downhill. If you're eating crap, your decision
Speaker 1: making capacity once again is going to go downhill. There's
Speaker 1: even a funny study, it's one of my kind of
Speaker 1: pet favorite psych studies because it's so ridiculous, that shows
Speaker 1: that your risk taking propensities become less than optimal when
Speaker 1: you have to go to the bathroom if you have
Speaker 1: to pee, you actually start evaluating risks incorrectly. Mind and
Speaker 1: body are intimately connected. Decision making ability is intimately related
Speaker 1: to how we're physically feeling. And so I want to
Speaker 1: urge people to not forget about that. You just want
Speaker 1: to go out, you want to play everything, Like I
Speaker 1: will not be going out for drinks. I'm sorry, Please
Speaker 1: do not take this person after an event. I'm going
Speaker 1: to be going straight to bed because I think that
Speaker 1: these things are incredibly important. So, Nate, what do you think.
Speaker 2: I am not promising that I won't get drinks after
Speaker 2: an event sometimes here and there. But look, I played
Speaker 2: some online events yesterday and what happened is because of
Speaker 2: this flight thing we'll talk about later on right, my
Speaker 2: schedule got very messed up over the weekend. Basically I
Speaker 2: haven't like eaten very much, and I was playing some
Speaker 2: online tournaments and was like fucking starving and like, and
Speaker 2: I'm like, hangar tilt.
Speaker 1: Hangary is actually a thing and has been studied in psychology.
Speaker 2: It wasn't even like irrational. It's like, I really need
Speaker 2: some fucking food. I want to double up or go
Speaker 2: home because I didn't really manage my eating schedule properly. Yeah, no,
Speaker 2: it's Look, it's a seven week event. If you're here
Speaker 2: for four days or a week or something, you maybe
Speaker 2: can like burn the candle at both ends a little
Speaker 2: bit more.
Speaker 3: But remember the most.
Speaker 2: High stakes decisions that you make are later on in
Speaker 2: an event. You can play a beautiful poker on day one,
Speaker 2: day two. If you make your goal, I'll make you
Speaker 2: to day three or something. And then you start to
Speaker 2: get hanger tilt or or exhaustion tilt or whatever else,
Speaker 2: then then it's really negative ev right, even if you're
Speaker 2: like plus if to make the money. If you if
Speaker 2: you blow it and I've seen so many guys blow
Speaker 2: it on day three, day four of events, then you're flushing.
Speaker 3: Your money down the toilet. So yeah, look, I'm not judgmental.
Speaker 2: If you're somebody who has a routine that involves different things,
Speaker 2: and that's fine. If you eat more calories or less,
Speaker 2: or you drink or you don't or whatever, I'm not
Speaker 2: here to I'm not here to judge. But it requires
Speaker 2: a lot of time and concentration, and that has cumulative
Speaker 2: effects with the course of the event. So every decision
Speaker 2: you make away from the table effects in some way,
Speaker 2: you're your decision.
Speaker 3: At the table.
Speaker 1: So it sounds n like you agree with my number
Speaker 1: one tip.
Speaker 2: You have you since I have so many good tips
Speaker 2: for me, I have twenty one and I can't. They're
Speaker 2: like my babies, you can't, but have you read they're
Speaker 2: equally good. And one of the important things in poker
Speaker 2: is you have to sometimes randomize when you're indifferent between
Speaker 2: good options. So I'm going to have you randomly pick
Speaker 2: between one and twenty one. If it's like one of
Speaker 2: the worst tier of the twenty one, then I'll veto it, right,
Speaker 2: give me a number from one to twenty one.
Speaker 1: Okay, Well, I actually have no idea what number any
Speaker 1: of your tips are because I read that when it
Speaker 1: came out, which was now a few weeks ago. All right,
Speaker 1: let's go with number six.
Speaker 2: Six six is like that's a logistics thing for how
Speaker 2: you get your money to the world series.
Speaker 3: Could be a different one, come.
Speaker 1: On, all right, So sometimes, oh, this is actually a
Speaker 1: really really good point. When you truly randomize at the
Speaker 1: poker table, you have to do what your randomization tells you. So,
Speaker 1: by the way, randomization at the poker table means if
Speaker 1: there's a decision that you take X percent of the time,
Speaker 1: say twenty percent of the time, and one that you
Speaker 1: take eighty percent of the time. You can actually randomize
Speaker 1: and say, okay, if I have a number, you know,
Speaker 1: from zero to one hundred, if it's below twenty, then
Speaker 1: I take the twenty percent decision, and if it's above twenty,
Speaker 1: I take the eighty percent decision. But if you roll fifteen,
Speaker 1: you have to do that. And sometimes you're like, you know, what,
Speaker 1: fuck you randomize are? I'm just going to do what
Speaker 1: I want to do. I call, or I raise, or
Speaker 1: I do this. That's not why you randomize, So Nate,
Speaker 1: if we're truly randomizing, this is not why you randomize.
Speaker 1: If you truly think that every single one of your
Speaker 1: tips is equally valid, then your number one tip is
Speaker 1: going to be about how to register.
Speaker 3: Furtherwise, I'm sorry, I told you that in advance. I
Speaker 3: was part of the strategy. This is my one veto.
Speaker 4: PI.
Speaker 1: Okay, fine, this is your one veto. I just I'm
Speaker 1: going on records saying that I objecked all right. Tip
Speaker 1: number thirteen.
Speaker 2: This is a good one. Expect to come home with
Speaker 2: less money than you started with. I was talking with
Speaker 2: one of our mutual friends a couple of years ago.
Speaker 2: I won't name him because it was a dinner conversation.
Speaker 2: Maybe you were there, I forget, right, So is someone
Speaker 2: who'll be regarded as one of the probably top ten
Speaker 2: poker players, turn the poker players of all time, right,
Speaker 2: And he's like, yeah, I had a losing summer. And
Speaker 2: that's usually how it works if you run the math.
Speaker 2: So this is for a player who's playing lots of events,
Speaker 2: almost all the events varius till the misk events too.
Speaker 2: But even if you're a player with a large edge,
Speaker 2: having say fifty entries over a six week tournament or
Speaker 2: seven week tournament, the mess says that, like, because so
Speaker 2: much of the money is constentrat in getting final tables
Speaker 2: in first place, you're probably going to lose money of
Speaker 2: the course of a series. And if you're coming in
Speaker 2: for three weeks like I am, over two stretches this
Speaker 2: year even more likely. In fact, according to some simulations
Speaker 2: I've ran from my book, over a full year two
Speaker 2: hundred entries in live poker tournaments, a winning player is
Speaker 2: still almost fifty fifty to.
Speaker 3: Have a losing year.
Speaker 2: So coming in looking at the opportunity. If I may
Speaker 2: do great, it may go well, but like it's often
Speaker 2: going to be twelve bullets as a term poker players
Speaker 2: use slightly violent term for an entry new tournament, right,
Speaker 2: it might be twelve, fifteen, seventeen bullets no cashes. It
Speaker 2: might be twenty three bullets, two minimum cashes. That's how
Speaker 2: poker works. That's a lot of time, but most of
Speaker 2: the time.
Speaker 1: Frankly, I think that's actually a really good tip, and
Speaker 1: I think that that's a really important tip for life
Speaker 1: that in when you do something where you take risks,
Speaker 1: you have to think and plan accordingly and realize that
Speaker 1: it might go not your way. And so I'm actually
Speaker 1: going to fast forward to my tip number three because
Speaker 1: it's very related to this, and then we can go
Speaker 1: back to tip number two, which is keeping your bank
Speaker 1: roll management strict. So what I mean by that is
Speaker 1: when you come out here, or when you're making any
Speaker 1: sort of decision when you're going to be spending money,
Speaker 1: plan out ahead of time your entire bank roll and
Speaker 1: stick to it. So my first ever summer out here
Speaker 1: in Vegas for the World Series, I didn't do that
Speaker 1: because you know, I was bright eyed and bushy tailed.
Speaker 1: I was researching my book and I got caught up
Speaker 1: in it. There's this event called the Colossus, or as
Speaker 1: I like to call it, not affectionately after that summer,
Speaker 1: the colass Hole, because it has a million possible re
Speaker 1: entries and it's a very low price point. I think
Speaker 1: it was like five hundred or six hundred dollars, which
Speaker 1: for the World Series that's kind of as about about
Speaker 1: as low as it gets. But you can enter it
Speaker 1: ten times or twelve times, I don't even remember. And
Speaker 1: I remember playing and busting and playing and busting, and
Speaker 1: I think I only had two bullets budgeted for this event.
Speaker 1: And I kept going because everyone around me was like, Oh,
Speaker 1: this event is such great value. You really have to
Speaker 1: re enter.
Speaker 3: It's amazing.
Speaker 1: And I was like, yeah, you're right, it's great value.
Speaker 1: I have to re enter. And do you know what
Speaker 1: I was the great value. I didn't know what I
Speaker 1: was doing that summer. I did not play well like
Speaker 1: I had just kind of I was just learning the game.
Speaker 1: I went way over my head. They correctly got me
Speaker 1: to re enter, and then they took my money again
Speaker 1: and again, and that was a really expensive and really
Speaker 1: important lesson for me that when you're emotional, when you're
Speaker 1: kind of in the heat of the moment, it's easy
Speaker 1: to get caught up and say, what's an extra five
Speaker 1: hundred bucks when I've already budgeted ten thousand. No, your
Speaker 1: budget has to be strict, your bankroll has to be strict.
Speaker 1: And this is true of any risky decision that you take,
Speaker 1: whether you're a trader or whether you know it doesn't
Speaker 1: really matter. Otherwise you're going to go broke and that's
Speaker 1: not a fun feeling. I think this is actually quite
Speaker 1: related to your tip number one.
Speaker 2: I mean, look, it does depend kind of whether you
Speaker 2: see yourself as a professional or an amateur, and we
Speaker 2: probably do have some people in that audience are here
Speaker 2: as recreational players. It's a little bit different. I still
Speaker 2: don't like to play any event where I think I'm
Speaker 2: negative EV negative expected value, or if I do, I
Speaker 2: want to play the cheaper events, right, I will enter
Speaker 2: some mixed game event for ver, say fifteen hundred dollars,
Speaker 2: or maybe I'm negative ten percent ROI I'm not going
Speaker 2: to enter some ten thousand dollars tournament return on investment, right,
Speaker 2: And this is disputed kind of how much money an
Speaker 2: ROI is for a good or decent player, but plausibly,
Speaker 2: if you enter, like say a one thousand dollars event
Speaker 2: with a very soft field, your expected value in that
Speaker 2: event might be a few hundred bucks. I think some
Speaker 2: people is optimistic, but I think for like, for like
Speaker 2: good tournament pros and even good amateurs, those fields are
Speaker 2: so soft where your ev expected value might be three
Speaker 2: hundred dollars for one thousand dollars entry. But if it's
Speaker 2: below zero, if if you play the tournament a million times,
Speaker 2: I lose money on average. You know, even if I
Speaker 2: can afford to take that loss, I just psychologically something
Speaker 2: about that feels like it's burning money. Unless it's a
Speaker 2: game I'm trying to learn more, when it's an investment
Speaker 2: in the long term.
Speaker 1: I think that's a I think that's a great point.
Speaker 1: So Nate, I'm gonna do play the lottery again. Write
Speaker 1: one to twenty one. Let's go with twenty one.
Speaker 2: So your skill set is worth thinking about early in
Speaker 2: the main event, but don't get carried away in another setting.
Speaker 2: So this means, let's say you come in, and let's
Speaker 2: say we come in and we find the field of
Speaker 2: our dreams, right, it's all recreational players. Some of the
Speaker 2: pros aren't here yet. It's a very soft tournament. People
Speaker 2: can I think go too far sometimes in saying well,
Speaker 2: I have a skill edge relter to the field. The
Speaker 2: fact is that if you have, for example, if you're
Speaker 2: able to get a fifty five forty five coin flip
Speaker 2: so called situation, so you win fifty five percent of
Speaker 2: your flips, that's actually very very very good. If you're
Speaker 2: a professional gambler, a sports better who won fifty five
Speaker 2: percent of his or her bets consistently would beat the
Speaker 2: books and be on their way to being a very
Speaker 2: successful person at their craft. Now, if you're playing the
Speaker 2: main event, which will happen in seven weeks time, we'll
Speaker 2: have more segments on it. That's the one exception that's
Speaker 2: where you only at one entry. It's a ten thousand
Speaker 2: dollars entry. So it's like there's not like some alternative
Speaker 2: way to spend your time and your money that's equally good.
Speaker 2: And the field is so soft re alter to the
Speaker 2: buying level that I think you actually might want to
Speaker 2: be like a little bit more risk averse on day
Speaker 2: one and day two. But generally speaking, gambling is about
Speaker 2: pushing small edges. Don't underestimate your opponents either, even though
Speaker 2: there are more weak opponents at the World Series in
Speaker 2: the most venues. So it's like, yeah, you have to
Speaker 2: take risks to win a poker tournament.
Speaker 1: I got, I got nothing to add to that night.
Speaker 1: I think you have to take risk because a really
Speaker 1: really good UH is a good summation of a something
Speaker 1: that's super important and something that I need to learn
Speaker 1: from because I am someone who has consistently struggled with
Speaker 1: taking enough risks. That's counter to my personality. I'm more
Speaker 1: of a risk averse person, and I've really really worked
Speaker 1: hard to kind of work on that side, because you
Speaker 1: do have to take the correct risks based on the situation,
Speaker 1: based on the odds, based on the math and the percentages,
Speaker 1: not based on how you're feeling, which actually goes to
Speaker 1: my tip two. You know, going back in time since
Speaker 1: we al recovered tip three, this is my final tip,
Speaker 1: which is mental game and working on your mental game.
Speaker 1: So what I mean by that is that when you're
Speaker 1: playing poker, when you're in a decision making environment that's
Speaker 1: extremely high stress and high pressure, and where you're going
Speaker 1: to get tired because even if you've gotten beautiful rest
Speaker 1: and all of this, you're playing twelve thirteen hour days.
Speaker 1: This is a really long time to be thinking hard
Speaker 1: and making good decisions. You're going to get cognitively depleted.
Speaker 1: You're going to get emotional. There will be moments where
Speaker 1: you get angry because someone pissed you off. There will
Speaker 1: be moments when you are upset because you lost a
Speaker 1: big hand. There's moments when you're going to be elated
Speaker 1: because you won a big hand. And all of those
Speaker 1: things are going to mean that you are tilting. Tilting
Speaker 1: means putting emotion into your game instead of just doing
Speaker 1: the logical rational decision. And my advice to you is
Speaker 1: to sit down and figure out, okay, what makes you tilt,
Speaker 1: how do you tilt, and then to respond accordingly in
Speaker 1: the moment. I always say it's better to take a break,
Speaker 1: to actually physically get up from the table, take a lap.
Speaker 1: You might miss a hand, but you're not going to
Speaker 1: misplay that hand right, and it will help you cool off.
Speaker 1: It will help you actually physically remove yourself from that situation.
Speaker 1: Whatever you need to do to detilt, be aware of
Speaker 1: it and do it, and there's no shame in it.
Speaker 1: Everyone tilts. And this is something that distinguishes the truly
Speaker 1: great players from the ones who are just mathematically very
Speaker 1: good is their mental game, their ability to thrive under pressure.
Speaker 1: So that's my final tip, and I think it's a
Speaker 1: very important one.
Speaker 3: Maria, we're in the lightning around here. I need one
Speaker 3: more number. Roll at Roulett Wheel. Let's let's hope for
Speaker 3: a good one.
Speaker 1: All right, let's do number five.
Speaker 2: It's okay, I'll spin this into something better than it is.
Speaker 2: I'm bluffing a little bit here. It's poker after five
Speaker 2: is as we are both doing, stay within walking distance
Speaker 2: of the World Series of Poker. The broader lesson here
Speaker 2: is that you really want to minimize distractions.
Speaker 3: You do not want to have the worry.
Speaker 2: About fighting through traffic or finding a parking space. The
Speaker 2: hotels are actually quite nice here, as is Maria's apartment
Speaker 2: by the way. But like once you get in deep
Speaker 2: in an event, right, you were on the clock for
Speaker 2: twelve hours a day. Let's say that you want to
Speaker 2: sleep seven hours. Let's say you want to eat something
Speaker 2: in the morning. Let's say you want to work out.
Speaker 2: Let's say you want to have a little bit of
Speaker 2: study time right. You know, let's say you need an
Speaker 2: hour to wind round and have a drink at you
Speaker 2: in the evening, which you often do if if you've
Speaker 2: had a long day, right all the sudden, you have
Speaker 2: committed like twenty four twenty five hours already, so the
Speaker 2: last thing you want to do is have to worry
Speaker 2: about like a long commute to the cute air and
Speaker 2: b you bought forty minutes out of town where you
Speaker 2: can't find any grocery store it's open later, or anything
Speaker 2: like that. I've even had things where if I made
Speaker 2: like day three of an event, I got a different
Speaker 2: hotel room closer to that venue, because at that point,
Speaker 2: even like an extra hour of sleep is worth an
Speaker 2: awful lot.
Speaker 4: Great.
Speaker 1: Well, Nate, I hope that you are staying close to
Speaker 1: the hotel this time, and I am so excited to
Speaker 1: see you in a few hours and play our first
Speaker 1: event together during this world series.
Speaker 3: I'm already registered, Maria, so I did so much.
Speaker 4: Okay, let's do it, so.
Speaker 3: Maria.
Speaker 2: Last Thursday, the twenty third, the SEC approved an ETF
Speaker 2: application for Ethereum. We have a variety of listeners who
Speaker 2: are ranged from I'm sure very crypto knowledgeable to thinking
Speaker 2: this is all Greek to them. Can you kind of
Speaker 2: explain down the middle pathway or our media and listener
Speaker 2: what happened and why this is significant.
Speaker 4: Yeah.
Speaker 1: Absolutely, So. First of all, an ETF is an exchange
Speaker 1: traded fund, so that means that it's a fund where
Speaker 1: you pool securities and then you can trade that pool
Speaker 1: of securities like stocks, and so what this means is
Speaker 1: that you know, people can participate in that broad pool
Speaker 1: of stocks without actually having to pick every single one themselves.
Speaker 1: So it's a huge it's a big deal in the
Speaker 1: financial markets. Last year there started to be rumblings that
Speaker 1: Bitcoin and Ether, which are kind of the two biggest cryptocurrencies,
Speaker 1: we're going to get ETFs of their own, and that
Speaker 1: ended up happening this past January with Bitcoin, So that
Speaker 1: was the first ETF that was actually approved in the
Speaker 1: crypto space, which was absolutely just huge, huge news because suddenly,
Speaker 1: you know, mom and pop, Joe next door, people who
Speaker 1: don't really know much about crypto might have been a
Speaker 1: little too risk averse to kind of trade bitcoin or
Speaker 1: buy bitcoin directly. Now in their retirement accounts and all
Speaker 1: of these different things in their investments, they can actually
Speaker 1: just get the ETF and they can feel like they're
Speaker 1: participating in this cryptocurrency, in this movement by buying it.
Speaker 1: And so then everyone was really excited and was like, oh, wow,
Speaker 1: are you going to approve ETH? And it seemed like
Speaker 1: the answer was going to be no. And it seemed
Speaker 1: like the answer was going to be no for a
Speaker 1: number of reasons, not least of all because the Democrats,
Speaker 1: especially after what happened with Sam Bank, Womin Freed, and
Speaker 1: that whole fiasco, have been very kind of crypto skeptical
Speaker 1: and have really shied away from entering that world. In
Speaker 1: the SEC has not been very friendly to the crypto space.
Speaker 1: So people thought that the chances of approval for ETH
Speaker 1: we're going to be incredibly low, and then last week
Speaker 1: that changed. On Thursday, the approval actually went through. We
Speaker 1: went from basically, this ain't happening to holy shit, it
Speaker 1: just happened in four days. And so maybe we just
Speaker 1: jump ahead and talk a little bit about the significance
Speaker 1: of the approval in broader political context, because obviously, you know,
Speaker 1: I'll just kind of nod to the fact that there's
Speaker 1: obviously financial it's very important for the financial markets, and
Speaker 1: we've talked about that, but now I think the crucial
Speaker 1: question is why now, right, why did we go from
Speaker 1: twenty five percent to seventy five percent to boom where
Speaker 1: people who really know this area were like, it's never happening,
Speaker 1: it ain't happening. Then we're like, holy shit, you know
Speaker 1: it happened. And I think that a lot of that
Speaker 1: does boil down to politics and nate to the points
Speaker 1: that you were making. Who is the audience of crypto,
Speaker 1: who are they voting for? And how do they see
Speaker 1: you if you oppose crypto currencies because a lot of
Speaker 1: people in crypto are what's called single issue voters. Right,
Speaker 1: if you're pro crypto, they're going to vote for you.
Speaker 1: If you're seen as anti crypto, they ain't going to
Speaker 1: vote for you. And this is true of the president,
Speaker 1: it's true of senators, it's true of Republicans.
Speaker 2: Yeah, we look, Another factor is timing. We're now a
Speaker 2: year and a half removed from FTX blowing up. Whether
Speaker 2: you blame crypto per se for Sam Mekmin free, it's
Speaker 2: a longer discussion I think we have time for right now.
Speaker 2: But look, if Silicon Valley thinks they can make money
Speaker 2: off this and Wall Street things, they could make money
Speaker 2: off this, and the people who care more about crypto
Speaker 2: might be swing voters, gettable votes war and the people
Speaker 2: who are moralistic about it or whatnot. Then you know, look,
Speaker 2: in the end, we actually are a pretty risk taking country,
Speaker 2: the United States, And it's hard to bottle that up,
Speaker 2: especially if both parties kind of sense that this is
Speaker 2: some emerging group of voters. I mean, it's still relatively small, right,
Speaker 2: I don't want to exaggerate. I mean, if you made
Speaker 2: a list of the twenty most important issues in the election,
Speaker 2: crypto might be somewhere between seventeen and like not on
Speaker 2: the list, Right, let's not exaggerate too much. But as
Speaker 2: you're fighting for scarce real estate, these disaffected younger voters
Speaker 2: who are not super into like watching cable news or
Speaker 2: things like that, are actually voters who may be gettable
Speaker 2: for either campaign. And so so I can see why
Speaker 2: they're trying to think about that square on the chessboard
Speaker 2: a little bit.
Speaker 1: So, Nate, we were talking earlier today about poker and
Speaker 1: about the importance of small edges and that you you know,
Speaker 1: if you're a gambler, if you're a risk taker, if
Speaker 1: you're any sort of decision maker. If you have an edge,
Speaker 1: even if it's, you know, a two percent edge, you
Speaker 1: need to take that edge right because over time that's
Speaker 1: actually going to be important. I think that that's a
Speaker 1: really crucial point when we're talking about something like crypto here,
Speaker 1: because as we've already talked about, I think every single
Speaker 1: week of the Risky Business podcast, this is going to
Speaker 1: be a close election no matter what. Right, the two
Speaker 1: candidates right now, Trump and Biden are neck and neck,
Speaker 1: and these small percentages might end up mattering, especially in
Speaker 1: swing states. And so if we look at the crypto
Speaker 1: voting block and we say, okay, you know, there are
Speaker 1: a lot of people who are voting for whom this
Speaker 1: is very important, and it seems like if we're anti crypto,
Speaker 1: we might lose some votes but not gain any votes.
Speaker 1: But if we're pro crypto, we're probably not going to
Speaker 1: lose any votes because you know, people don't care enough,
Speaker 1: but we might gain votes from that. You know, younger
Speaker 1: swath of the population that does that does actually care
Speaker 1: about that, And that's a that's an important calculus one
Speaker 1: you're a politician.
Speaker 2: Yeah, look, Trump also has demonstrated a willingness to go
Speaker 2: and ask for anybody's vote. He was in the Bronx
Speaker 2: the other day New York is not a swing state,
Speaker 2: but trying to signal his support for young African American men,
Speaker 2: which his group. He has gained among in the polls,
Speaker 2: way behind, but better than he had been in previous years.
Speaker 2: He was at the Libertarian nominating convention over the weekend,
Speaker 2: where he was booed, but did pledge to nominate a
Speaker 2: Libertarian to his cabinet, which is kind of an actual
Speaker 2: and actual thing, right, if you'd like a libertarian Treasury
Speaker 2: Secretary of something that's like actually pretty significant. But Trump,
Speaker 2: as a real estate developer, has always understood that an
Speaker 2: underdeveloped parcel of real estate is worth taking. That's often
Speaker 2: a plus ROI plus EV investment. Right, Here's this like
Speaker 2: blended piece of real estate where actually the fundamentals aren't
Speaker 2: so bad and maybe you can fix it up and
Speaker 2: make a profit on it. And I'm not going to
Speaker 2: comment on domin Donald Trump's like real estate portfolio management
Speaker 2: skills necessarily, but that instinct, I think is actually one
Speaker 2: of the things I think I would give the most
Speaker 2: compliments on as a politician that Trump like understood the
Speaker 2: landscape was changing in twenty sixteen, the traditional GOP coalition
Speaker 2: was losing. He would build a new coalition. And you
Speaker 2: know why isn't Biden also speaking at the Libertarian conference
Speaker 2: and saying because none of these candidates, including by the way,
Speaker 2: RFK Junior, who at some point had a flirtation with libertarians,
Speaker 2: none of these candids are good for libertarians, like whatsoever? Right,
Speaker 2: but like, but Biden should say, look, we're better on
Speaker 2: reproductive rights. Right, We're better on freedom of the press,
Speaker 2: and make some people about free speech. And Biden seems
Speaker 2: a little bit risk averse to try to reach out
Speaker 2: to new groups. Maybe he's afraid of getting booed. And
Speaker 2: I'm not sure if Trump one of the news clips
Speaker 2: from the weekend, but he is trying to go after
Speaker 2: that one in one hundred or one and even one
Speaker 2: thousand voter that could make a difference if the elections
Speaker 2: have been as close as they were in the past
Speaker 2: two cycles.
Speaker 1: Yeah, and I think that this is a very positive
Speaker 1: development actually for the for the Biden campaign because it
Speaker 1: does even even though he is more risk averse, I
Speaker 1: think that this does signal that they are paying attention
Speaker 1: and they are starting to do kind of what needs
Speaker 1: to be done to get those votes that they need
Speaker 1: to get. And so, Nate, you know, we were talking earlier,
Speaker 1: this earlier about what we were going to talk about today,
Speaker 1: and you said, you know, let's not do a politics segment.
Speaker 1: So I said, let's do a cryptocurrency segment. And it
Speaker 1: turns out that in an election year, you know, everything
Speaker 1: becomes a politics segment to a certain extent, because I
Speaker 1: do not think we would be talking about this. I
Speaker 1: do not think the e ETF would have been approved
Speaker 1: if we were not in an election year, and if
Speaker 1: that didn't kind of light the fire under politicians under
Speaker 1: Biden to actually do things that might be distasteful to
Speaker 1: them on some level, might be more of a risk
Speaker 1: than they would otherwise want to take, but that they
Speaker 1: are now willing to take because it's an election. So Nate,
Speaker 1: everything is about the election. So Nate, as as we
Speaker 1: mentioned earlier, we're both in Las Vegas, and I think
Speaker 1: we both feel incredibly lucky to be here because our
Speaker 1: flight experiences this Memorial Day weekend were anything but smooth.
Speaker 1: So I, for one, found myself sitting in LaGuardia Airport
Speaker 1: and getting an alert that my flight was going to
Speaker 1: be you know, delayed first by an hour, then two hours,
Speaker 1: then two and a half hours, and finally two hours
Speaker 1: and fifty five minutes. And at that point we started,
Speaker 1: you know, we started boarding, and it ended up being
Speaker 1: delayed by three and a half hours, but by that
Speaker 1: point everyone was on the plane and it was just
Speaker 1: it was just a nightmare and not something that I
Speaker 1: was very happy with. So I'm happy to have made
Speaker 1: it here, but I know that you have had a
Speaker 1: less than stellar flight experience as well. And I think
Speaker 1: also you know, the fact that our final official delay
Speaker 1: was two hours and fifty five minutes before it was
Speaker 1: pushed while everyone was on the plane also has some significance.
Speaker 2: Yeah, I was flying from Westchester County Airport HPN. I
Speaker 2: think it is the call sign, and you can't fly
Speaker 2: direct to Vegas from there, but you can connect either
Speaker 2: choice of Atlanta or Detroit. Thing from Michigan. I chose
Speaker 2: Detroit had a much longer connection time. I don't trust
Speaker 2: thirty nine minutes in Atlanta, and I got that American
Speaker 2: Express car where you get sky lounge. Jackson, I'm like,
Speaker 2: you know, so we're circling in and like it's starting
Speaker 2: to take a while I'm like, weren't we supposed to
Speaker 2: have landed half an hour ago? Maybe I'm just like
Speaker 2: kind of misremembering things. Right, We keep circling, and then
Speaker 2: we get the pilot comes on right and he's like, well, folks,
Speaker 2: I mean, like you know from the tona's voice, it's
Speaker 2: going to be a really bad well folks.
Speaker 3: Right, He's like, we're running.
Speaker 2: We're running out a few we have to land in
Speaker 2: fucking He didn't say fucking, we have to land in Buffalo.
Speaker 2: So we're going back where we thought we were in Detroit,
Speaker 2: and this is really bad.
Speaker 3: I had things where I had to be.
Speaker 2: Like on the ground somewhere business calls, online poker, stupid crap.
Speaker 3: I had to be like on the ground on Monday.
Speaker 3: I couldn't be flying on Monday.
Speaker 2: Basically, I could have really scrambled the whole trip, maybe
Speaker 2: including this podcast potentially on the ground.
Speaker 3: There's kind of like you know, Lord of the Fly
Speaker 3: or not really.
Speaker 2: It's actually the pilot basically came and said we can
Speaker 2: be plane ba if we be playing. There's a lot
Speaker 2: more paperwork, and so let's take a vote basically, and
Speaker 2: people are like, yeah, let's stay on, except for one guy.
Speaker 3: They had to warner them. They have to tell them.
Speaker 2: We want you to know, sir, you may have to
Speaker 2: be in Buffalo, New York for up to twenty four hours.
Speaker 2: You know, here's a liability waiver in case something happens
Speaker 2: to you. We do make it back to Detroit, and then,
Speaker 2: because the whole rest of the flights have also been
Speaker 2: scrambled by this midwestern thunderstorm, my original flight is also
Speaker 2: three hours late.
Speaker 3: So I get into Vegas at like one point thirty
Speaker 3: in the morning.
Speaker 2: So all, well, that ends well, I suppose, But apropos
Speaker 2: of this, there are some new government regulations that would
Speaker 2: have covered I think, both of our situations.
Speaker 3: So this is was released last week by.
Speaker 2: The federal By Mayor Pete, our Department of Transportation issued
Speaker 2: a whole new set of rules last week governing compensation
Speaker 2: for passengers under a variety of circumstances. For example, a
Speaker 2: domestic flight delayed by three plus hours or an international
Speaker 2: flight six plus hours, if there's an extra connection like
Speaker 2: my flight to Buffalo, or you land a different airport
Speaker 2: because of a diversion, if your bags aren't delivered in
Speaker 2: twelve hours. Discovers the guarantees you can get compensation in
Speaker 2: a transparent way and with cash, not just some mileage
Speaker 2: credit that you may or not be able to use
Speaker 2: later on. So it's an effort to kind of streamline
Speaker 2: and standardize punishments to airlines compensation to passengers when you
Speaker 2: have a.
Speaker 3: Really annoying flight delay.
Speaker 2: So let me be a first first reaction to that, by
Speaker 2: the way, is like part of a Biden administration series
Speaker 2: of on junk fees or non transparent fees.
Speaker 1: Yeah no, I mean part of me says, you know, hallelujah, good,
Speaker 1: like we need to hold airlines accountable. But some of
Speaker 1: these things, like I can see the argument that, Okay,
Speaker 1: you know it might not be great for like smaller
Speaker 1: airlines blah blah blah, but honestly, airlines haven't given a
Speaker 1: fuck about us for so long and have tried to
Speaker 1: kind of push their edges. You know, you have fees
Speaker 1: for all your checked bags, you have no lug room,
Speaker 1: like they try to just cram you on the plane.
Speaker 1: They have terrible customer service most of the time. So
Speaker 1: I say, like, yay, yay these rules, and like I
Speaker 1: don't check baggage because it gets lost all the time.
Speaker 1: Like yes, please compensate me if if I have to
Speaker 1: check it and you lose it. Like this seems like
Speaker 1: something on an emotional level. And I know here we're
Speaker 1: all about rational and logical risk taking and decision making,
Speaker 1: but this is something airline travel is something that people
Speaker 1: react to emotionally. I'm emotional about it, and good, I'm happy.
Speaker 1: I want the airlines to have to pay for when
Speaker 1: they actually do this, because you know, as a as
Speaker 1: a consumer, when big corporations try to take advantage of me,
Speaker 1: that doesn't feel good. And so I do think that
Speaker 1: I'm acknowledging that I'm coming from this from an incorrect
Speaker 1: decision making framework, but the hedonic value is actually a
Speaker 1: big part of my expected value here.
Speaker 2: So I'm going to come in it from like an
Speaker 2: economist standpoint where in some ways to have regulations can
Speaker 2: actually be beneficial to the industry from a game theory standpoint,
Speaker 2: So let me get it. Kind of give you an example,
Speaker 2: which is if you got to like an online dating profile, right,
Speaker 2: and you look at different men who are trying to
Speaker 2: maybe exaggerate favorably their height or their age or other
Speaker 2: things other features about them. Right, I love that other
Speaker 2: features you want to with what's kind of a prisoner's dilemma,
Speaker 2: believe it or not, where let's say everyone exaggerates their
Speaker 2: height by two inches and you have the same incentive
Speaker 2: to do it, unless you're may be so tall that
Speaker 2: like six or four versus six six doesn't matter all
Speaker 2: that much. By the way NBA players do this, maybe
Speaker 2: an inch or so as well. But the point is
Speaker 2: that you know, passengers know that when they book an
Speaker 2: airline ticket or even more. It's worse with hotels, by
Speaker 2: the way, with the resort fees where the hell they
Speaker 2: call them. They know there are a lot of like
Speaker 2: extra add on fees, and therefore, if you want to
Speaker 2: like let's say we're a hotel that has like all
Speaker 2: in pricing, there's no hidden fees, well it's still going
Speaker 2: to appear more expensive on Expedia or whatnot. So to
Speaker 2: have like standards that regulate what fees are included or
Speaker 2: kind of what compensation you get if you're late might
Speaker 2: actually be okay and lead to more transparency for consumers
Speaker 2: in general and have less dead weight loss is the
Speaker 2: economics term. With that said, this will be kind of
Speaker 2: priced into the cost of a ticket if every time
Speaker 2: you fly there's a one percent chance of a circumstance
Speaker 2: that would cause the airline to have to pay out
Speaker 2: a thousand dollars fine or something. Then adds ten dollars
Speaker 2: in expected value, and therefore it's kind of like a
Speaker 2: piece of insurance.
Speaker 3: Bundled with the ticket.
Speaker 2: But I look, the only critique I have other than
Speaker 2: that's not free money, right, it will get priced in,
Speaker 2: is could this create perverse incentives toward the airlines doing
Speaker 2: things that are unsafe in an effort to avoid these
Speaker 2: these large fees.
Speaker 1: Potentially, Yeah, that's actually something that I hadn't thought about,
Speaker 1: and that would be really problematic. I would hope that
Speaker 1: that doesn't happen, because the first time that a plane
Speaker 1: crashes where something goes terribly wrong because they cut a corner,
Speaker 1: the cost of that is so incredibly high to the airline,
Speaker 1: to the image, to the perception that I hoped that
Speaker 1: they wouldn't do that. That said, you know, we hoped
Speaker 1: that Boeing wouldn't do some of the things they did,
Speaker 1: So sometimes that decision making calculus is also a little
Speaker 1: bit different. But I'm glad that kind of the games
Speaker 1: theory of this also aligns with my own emotional desire
Speaker 1: to have these things not happen. One interesting thing, I
Speaker 1: thought you were actually going to go somewhere with the
Speaker 1: perverse incentives, you know, the two hours and fifty five minutes.
Speaker 1: Basically like that point when you see that delay, like,
Speaker 1: as a consumer, I should now be like, Okay, there's
Speaker 1: no way it's two hours and fifty five minutes. This
Speaker 1: is actually going to be delayed by more than three hours.
Speaker 1: And they're trying to like they're trying to keep me
Speaker 1: here so that I don't cancel and don't claim my refund.
Speaker 2: And then it's like it's like two hours two fifty eight, right,
Speaker 2: and they're like everyone's got to get seated now or
Speaker 2: else we're gonna hit the three hours. Oh shit, I
Speaker 2: have in a bathroom emergency. I have to go right now, right,
Speaker 2: and everyone, you make everyone I play in one thousand bucks. Right,
Speaker 2: we go into a local casino in Buffalo or whatever,
Speaker 2: and you know, have a great time.
Speaker 1: That's a good that's a good that's a good outcome.
Speaker 1: Is there a local casino in Buffalo night?
Speaker 2: I was looking this up. There was, uh, there was
Speaker 2: casino Niagara. I was not sure whether I bought my
Speaker 2: passport or not right, but potentially I could have wound
Speaker 2: up in Niagara Falls, Canada playing some one two I
Speaker 2: don't know, you know, one two limit nine.
Speaker 3: Or the fuck they have in Niagara Falls.
Speaker 1: So that makes me so happy. I'm so glad that
Speaker 1: as you were being diverted to Buffalo in this horrible situation,
Speaker 1: where your mind goes is is there a casino nearby?
Speaker 1: We haven't really talked about this, but I think that
Speaker 1: I affectionately think of Nate as you know, my one
Speaker 1: of my most djeny friends, and djen is short for
Speaker 1: a degenerate gambler, and it's a term of great affection
Speaker 1: in this particular case. And you know, people have more
Speaker 1: or less degen in them, which also I think has
Speaker 1: to do with appetite for risk, and Nate you as
Speaker 1: as the dgen that I know in love. I'm so
Speaker 1: glad that you were looking up casinos. I would have
Speaker 1: been looking up if I had been stuck there, I
Speaker 1: would have been like, eater hit list, Buffalo, Is there
Speaker 1: anywhere good to eat? Or am I going to be just.
Speaker 2: Completely one famous Buffalo anchor bar I think it's called
Speaker 2: And having not been to Buffalo maybe since I was
Speaker 2: like eight or whatever, Right, anchor bar Cassino, Niagara, get
Speaker 2: the six am earliest possible delta flight to Detroit, and
Speaker 2: from there we have options. Once you're in Detroit, it's
Speaker 2: you know, it's a real airport, and then the world's
Speaker 2: your oyster. But we had a whole game plan in case,
Speaker 2: in case the flight never left Buffalo again.
Speaker 1: So so Nate, let's just kind of sum this up. Obviously,
Speaker 1: nobody likes to be delayed, right, nobody. Nobody likes this,
Speaker 1: this kind of stuff to happen. And it seems that
Speaker 1: we agree for for even though we're coming from different angles.
Speaker 1: I'm coming from a very emotional tilted angle and you're
Speaker 1: coming from the correct risk taking game theoretic framework angle
Speaker 1: that there are a lot of good things that can
Speaker 1: come from these regulations. What does this mean just for
Speaker 1: us as decision makers on a on a broader.
Speaker 2: Level, Maybe it means you can be like a little
Speaker 2: bit more risk taking with your travel plans because you
Speaker 2: do get compensated in some way. You may get made
Speaker 2: partially whole if if you're if you're late or at
Speaker 2: the margin. I mean, look, I still think people are
Speaker 2: actually much too willing to to make connecting flights.
Speaker 3: I think paying a premium.
Speaker 2: For direct flight is worth it now because it says
Speaker 2: you time, but because like it's just like literally two
Speaker 2: x less likely will have a problem getting to your
Speaker 2: destination if you have one flight instead of two. Right, So,
Speaker 2: but at the margin, now you can take riskier options,
Speaker 2: I suppose if you don't mind the cash compensation in
Speaker 2: terms of flying out of an airport that has more
Speaker 2: delays or making a connection when you wouldn't otherwise. So
Speaker 2: at the margin, if you're a real ev maximizer for
Speaker 2: flight stuff, than it affects your plans a little bit.
Speaker 1: Well. I appreciate that, Nate. But as for me personally,
Speaker 1: if there's any chance of me ending up in Buffalo,
Speaker 1: I think I'm going to play it safe.
Speaker 2: I hope we have some Buffalonian listeners will who will
Speaker 2: understand that I am pro Buffalo and Marie's anti Buffalo.
Speaker 2: I would have enjoyed Anchor Bar, would have Enjoyedino Niagar.
Speaker 2: If there were a Sabers game, I would have gone,
Speaker 2: I'm sure, so I'm you know, Bill's game would be thrilled.
Speaker 3: So I'm pro Buffalo, all right.
Speaker 1: But we don't have to be in Buffalo. Right now,
Speaker 1: we're in Las Vegas and we we have to end
Speaker 1: this podcast here because we are both running out to
Speaker 1: play our first event for which we're both registered, and
Speaker 1: we're so excited.
Speaker 3: In fact, we're going to Paris.
Speaker 2: But the Paris Las Vegas Awesome Hotel is just you know,
Speaker 2: to play.
Speaker 3: In the at number one of the two thousand and
Speaker 3: twenty four Worlds. Heis at poker, absolutely night, Let's do it.
Speaker 1: I will see you there and I will see you
Speaker 1: at dinner where we will both have heaps and heaps
Speaker 1: and heaps of chips.
Speaker 3: Talk to you, s Maria.
Speaker 1: Risky Business is hosted by me Maria Kannakova and me
Speaker 1: Nate Silver. The show is a co production of Pushkin
Speaker 1: Industries in iHeartMedia. This episode was produced by Isabelle Carter.
Speaker 1: Our associate producer is Gabriel Hunter Chang. Our executive producer
Speaker 1: is Jacob Goldstein.
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Speaker 4: Spike at all by way,