Last year during the pandemic when social gatherings were banned I would, on occasion, play poker online. One Saturday evening, I sat down in my favorite chair, logged into my laptop, and registered for a $20 game, claiming the first seat on a table of 9. As I waited for 8 other players to join, I stepped away from my computer to make a cup of tea.
At some point between putting the kettle on and finding the tea I got distracted and it wasn't until an hour later that I had a bolt of realization about the forgotten game. It's frustrating when you make a wrong call in poker but losing $20 from failing to remember about the game felt far worse.
Even though I knew the game would be long finished, I returned to my laptop. As I opened my computer the screen refreshed but instead of seeing $20 less in my account, a banner filled the screen congratulating me on coming 3rd in the tournament. Instead of losing $20, I had won $40. Puzzled, I thought to myself "How could I win if I didn't play a hand? Surely it must be a mistake?"
In Robert Green's book 'Power', he writes: "As two competing sides battle, they become weaker and you become stronger." It dawned on me... I was able to rank 3rd by letting the other players fight against each other while I stood on the sidelines making tea!
We have been conditioned from a young age to believe that the more effort we put in, the more we get out. This belief was prompted during the industrial revolution when people worked mechanically. The idea helped to encourage a strong work ethic but it hides an important truth, that you can often get more by doing less.
Eric Falkenstei, an American financial economist highlights this point when he says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."
It takes a lot of work to become an expert but far less to avoid the most common mistakes of amateurs. You can sometimes even outperform the experts with less work, for example, if you passively invest in an index fund, you'll beat 90% of fund managers who actively invest.
In forgetting about the poker tournament I made a big mistake but in doing so it caused me to avoid a large number of smaller mistakes and taught me an important lesson: avoid the big mistakes and minimize the smaller ones by only pouncing on the opportunities that have the greatest chance of success.
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