What makes a smart gambler?

You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
Know when to run

— Kenny Rogers, The Gambler

You’ll have to pardon me if I lack a certain entrepreneurial spirit. After a few spectacular flame-outs I’ve lost my taste for risk for the time being. Given what has happened in our economy it would be hard to blame anyone for being a little gunshy right now.

In fact when I see people taking big chances I believe that I actually panic vicariously through them.

Risk is not merely a financial concept either…there are many types of risks. You risk your life whenever you get behind the wheel of a car. You risk your health whenever you eat an indulgent meal. You risk injury whenever you play a sport. And you risk your sanity when you enter a relationship of any kind on any level.

Some of these risks are unavoidable — or at least they are less risky than the alternative. For example, if you never get behind the wheel of a car then you might never get to work, and you stand a much greater risk of financial distress. So risk is also relative.

That brings me to a dilemma. How do you know when it’s worthwhile to take a big risk? Is it when you stand to receive an excellent payoff? Is it when you are confident that you can win? Is it when you become desperate and have nothing of value left to lose?

And if you’ve already taken the plunge, how do you know when to call it quits? Do you quit while you’re ahead? Do you give up when you’ve lost more than you can afford to lose? Do you stop when you realize you’ve become addicted to the intoxicating rush of it all?

Just as many investors are sitting on the sidelines and staying out of the stock market I am also trying to insulate myself from a risky environment.

3 thoughts on “What makes a smart gambler?”

  1. Daniel, you are a versatile writer on many subjects and seem very informed. Glad to name you as a cousin. Thanks for taking time to share your thoughts via such a creative blog.

  2. I suppose many of us have taken huge risks in adopting a religious belief system. The belief I see in common with most faiths is that life in the temporary must be put aside in favor of spending the biggest quantity of our time getting ready for eternity — when none of us truly knows what is out there. What’s beyond this life could very well be exactly as we believe it, but that’s almost like saying we know what the next 12 digits of Powerball’s winning numbers are. I would say “what’s out there” has as many options as we have when we buy a ticket before the drawing. Yet, with the odds being so overwhelmingly against our core belief being “right on the money,” we of faith find it so important to us that we are willing to die for it, which used to be the definition of religion. Now, however, religion is being defined by extremists as what charges and powers your faith enough to make you willing to be blown up for it as long as you blow up “infidels” in the process? To what extent are we willing to act on our faith … one that can’t be proved anymore than we can announce ourselves as the next winner of the highest jackpot in the land? Surely, there is enough humility in such a reality to grant some grace to others with differing opinions, but also enough bravery to realize a murdering enemy when we see one, so we are willing to defend ourselves against all odds from their insufficient capacity to reason.

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