It's a Great Party. But... Part 1

The poker explosion has created an incredible party. We're having fun and winning heavily because so many new players are throwing away their money. I wish the party would go on forever, but all parties end.



The supply of new players is certainly limited, but nobody knows what the limits are. Will another million or five million people start playing? Or, just a few hundred thousand? Or, even fewer?



Poker is very "fashionable" now, causing many faddish people to start playing. When it goes out of fashion – as it certainly will – the number of beginners will shrink drastically.



The poker economy needs a continuous supply of new players. Without their contributions, the good players can't make a profit, and the games will dry up. In fact, just a few years ago, many casinos closed their poker rooms.



You must accept that this party will end and start preparing now for the future. If you just act like a drunken reveler, blithely enjoying the party and ignoring reality, you may end up with a painful hangover.



Darwin was Right

He proved that competition gets continuously tougher. Conditions constantly change, and some animals and plants can't adapt well enough to survive. In fact, more species have become extinct than now exist. Because the weak die before they can breed, the survivors are much tougher competitors for food and mates.



Poker evolves in the same way. Every month, some weak players go broke or quit for other reasons. Some others learn how to play well enough to stop losing. If they are not replaced by new players, the games will inevitably become much tougher. It's Darwinian evolution in action, the survival of the fittest.



The current party has obscured poker's evolution. The games are so soft now – compared to just a few years ago – that most people don't realize how much poker has evolved. But let's look at the long-term picture.



When I started playing in the '50s, Card Player didn't exist, nor were there any other serious magazines. But now you can get free advice from great players every two weeks. Many new books have appeared, and they are far better than the "classics," such as The Education of a Poker Player, Oswald Jacoby on Poker, and Scarne's Guide to Modern Poker. Those books were the best of their time, but their advice was primitive. If you followed their advice today, you would get slaughtered.



Computer simulations have provided a kind of information that you couldn't get until the 1990s. Their hard data proved that some of the old-timers' ideas were just plain wrong.



The Poker Explosion and Technology

As a result of those two factors, the pace of change and evolutionary pressures have dramatically escalated:

· The games are much softer.

• You can play many more hands per hour online than in live games.

• The learning curve is much steeper.

The Games Are Much Softer: Because so many terrible players are giving away their money, you may think that evolutionary pressures have disappeared, but the softer games just change the way evolution operates. For example, because business is so good, some places have greatly increased their charges. Despite those charges, even mediocre players are winning because the games are so soft. However, when the games get tougher, those higher charges will make it much harder to win.



You Can Play Many More Hands Per Hour Online Than In Live Games: The games are much faster, and many people multitable. Some young people have played more hands in a few years than the old-timers played in their entire lives.

The Learning Curve Is Much Steeper: Just playing more hands will steepen the learning curve, and today's players have immeasurably more information and advice than poker players have ever had.

· There is an unprecedented supply of new books, DVDs, and videos.

· There are seminars every month.

· More people are paying for coaching.

· Online forums provide a wide variety of information and advice.

· Computer programs supply online players with information that never previously existed. Some people are "mining" the data, learning what works and doesn't work in tens of thousands of real-money hands. Their research will certainly add to poker theory. For the first time in history, some people will know the answers to many contentious questions.



Because of all of these factors, some players – especially very young ones – are developing their knowledge and skills extremely rapidly. A few of them have moved into the top ranks of professionals at an age that was almost unthinkable just a few years ago.

Evolution During Good Times

Many people are winning now only because the games are so soft, but they don't know it. They think they play well and expect to keep winning forever. They are dead wrong.



Our current situation resembles one that has occurred thousands of times in nature. Instead of getting tougher, our situation has gotten much easier, but evolution never stops. Ask a biologist, "What happens when an animal's living conditions suddenly improve?" He will tell you that the population will increase enormously. For example, if an animal is introduced into a new environment without its natural enemies, it will flourish. Life will be so easy that later generations don't develop necessary survival qualities, including the ability to resist certain diseases. In hard times, the weakest creatures die before they breed, but when life gets easy, the weak ones multiply, and their genetic defects become widely distributed. Then, overpopulation will create its own problems, such as a lack of food, and the weaker ones will starve or die from diseases caused by overpopulation. It takes a demanding environment to create tough animals.



The same pattern has occurred recently in poker. Because the games are so easy, the number of winners has increased enormously, and many of them don't play that well. They have huge holes in their games, the crude equivalent of an animal's genetic defects. Even severely flawed players can beat very soft games.



This principle has always been true, as I learned when I moved to Las Vegas before the poker explosion. Many winning players there were weak-tight, but you couldn't win by playing that way in Atlantic City.



Many Atlantic City tourists had developed their games from 10 or more previous visits, but many Las Vegas tourists had little or no casino experience. In addition, if they had a "gambling budget" for their trip, they might not care whether they lost it at poker, craps, roulette, or the slots. Since they played abysmally, even weak-tight players could win, and some Las Vegas regulars never developed other skills.



The same general process has occurred in many industries, especially on Wall Street. Whenever the market booms, some people get rich, complacent, and sloppy. They spend money too freely, and they don't work hard enough. Why economize or work hard when money seems to be falling from the sky?



Then, the market drops, and the sloppiest, most extravagant people go broke. It has happened again and again, but many people don't learn. The next time the market goes through its cycle, you will see the same foolish reactions.



Every Wall Street boom also produced a few young people who violated the old rules and did spectacularly well. Perhaps they were brilliant or perhaps they were just lucky, but they claimed to have a new system for beating the market. The dot-com craze was an extreme example: Some people, especially young ones, made huge fortunes by investing in stocks with no assets or earnings. These hotshots insisted that assets, earnings, and all the other normal investment criteria were irrelevant; all you needed was a great concept and a lot of hype. Because they believed that nonsense, many people took serious losses.



We're seeing similar drivel in poker. Some people are learning absurd strategies from heavily edited TV shows. A few tournament stars are very young and have extremely unorthodox styles. Some of them are very, very good, but others will end up just like the hotshot portfolio managers who insisted that the time-tested investment strategies were obsolete. Ten years from now, people will ask, "Whatever happened to whatshisname?"



My next column will discuss what you should do today to prepare for the tougher times we will face when the party ends.