Great read - Article by Mike Caro

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Luck matters in Poker
Mostly Because Your Opponents Think So

I don’t allow my students to be superstitious. The next hand always is based on a nearly random shuffle of cards, favoring no one in particular. No matter what has happened in the past, the next deal always means a brand-new start for you. The cards don’t remember who won the last hand. But even if they did remember, they probably would be too lazy to gang up on you. It takes too much effort. The cards don’t conspire to favor certain players or to aggravate others. But streaks do exist. I can use powerful computer algorithms to deal cards for billions of hands. Then what? Well, then you can look at those hands and see things that will amaze you! You’ll suffer a hundred hands in a row without winning a pot. You’ll win with three full houses in a row. You name it, you’ll see it.

The Way it Should Be

But this is all natural. This is what’s supposed to happen. This is the way it should be. Streaks are normal, not something to be surprised about. If you flip a coin 20 times and it comes out tails, tails, tails, heads, tails, tails, heads, tails, heads, heads, heads, heads, heads, heads, tails, heads, tails, tails, tails, heads – that’s nothing amazing. There were six heads in a row, but so what? If the sequence came heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, heads, tails, that’s peculiar. Each sequence is equally rare (just over a million to one against, in fact), but sequences with recognizable patterns suggest that something might be interfering with random events. There might be a bias – not necessarily, but maybe. There also may be a bias when you see long streaks, but probably not. Always remember that streaks are natural, something you need to learn to live through. If you don’t, you will be unprepared to win at poker.

Luck has influence, but the longer you play poker, the weaker its influence. And the big secret is that the more you act as if forces other than fair and random distribution of cards determine your fate, the worse you’ll do. If the game is honest, there are no mysterious forces to fear.

But your opponents will fall victim to the illusion of luck – and that’s good.
You just need to figure out how to take advantage, and I’m here to help you. The following is taken from the 33rd in my series of Tuesday Session classroom lectures at Mike Caro University of Poker, Gaming, and Life Strategy. The lecture was held on May 18, 1999. This is from the handout that accompanied the lecture, and it has been specially enhanced.
The title of the lecture was …

Using the Illusion of Luck to Win Money

I have witnessed the longest streak in poker history. So, nothing you tell me about good luck or bad luck is going to impress me. I saw a woman in the 1970s go years as a “card rack.” But there’s nothing supernatural about this. Luck just happens. There is no force behind it except the power of probability and “probability storms” that have the illusion of supernatural power. Trust probability to do the right thing. Eventually, it will.
1.
The woman was named Sumi. There is no doubt that she got much better than average cards in key situations for two years running. That doesn’t mean that she got big hands all the time, but clearly, she had so many unusually big hands in key situations that she came to believe that this was the norm. She also tended to risk an extra raise very frequently. This magic combination of very aggressive play, her obvious expectation that good cards would come, and the fact that they did come in a history-making streak meant that she had tremendous power over her opponents. This was the single event that did the most to convince me how powerful a weapon good luck can be in the minds of opponents. This is why I often have stated that it’s much better to declare that you’re lucky than to let opponents know that you’re running badly. If opponents truly believe you’re lucky, you actually can see the fear in their eyes.

Conceptually, luck is the most powerful element of profit. But not your luck. It’s everyone’s luck – yours and your opponents’ – that influences the way players will react. You can tap into their reactions to luck to make much profit. But don’t trick yourself into thinking that luck is earning the money for you. You’re earning the money because you understand the absurdity of putting faith in luck. And your opponents are losing the money because they do not understand this.

2.
There is no guarantee that the cards will break even in poker in your lifetime. But if you have skill and you make each decision matter, you’ll probably win even without your “fair share” of luck.

3.
Even in life itself, things don’t break even. Some people waste away in hospitals and others prance down pretty paths. In poker, it’s possible for two break-even players to sit in the same $75-$150 game for a year. One might win $150,000. One might lose $150,000. It will be all dumb luck, but which one do you think will be giving the lessons? Which one will be taking the lessons?

Even if the cards do break even, other elements may not. Some of these other elements are: (1) whether you are able to find the best games; (2) the size of the games you’re playing when you get your best and biggest cards; (3) getting backing for games beyond your bankroll; and (4) being in the right place when the “producer” comes to town to unload $10 million.

4.
Good luck has great influence on your foes. They lose by calling more often with weak hands, because they can’t believe what they’re seeing. (Also, there’s not as much discredit in being beaten by someone on a winning streak, so the weak calls won’t be scrutinized if they lose.) They lose by not betting or raising with winning hands, because they’re intimidated. If you think opponents stay out of your way when they think you’re running well, you need to re-examine this. You need to make continual value bets and raises when you’re conspicuously lucky. Opponents will call more. They also will be less likely to maximize their advantage by raising when they have quality hands. Both of these factors play heavily in your favor and dictate that you should go into high gear and bet and raise with small advantages. You’ve probably heard that so-and-so “knows how to play a rush.” Well, now you know what that means. Nothing more.

5.
Opponents tend to call more liberally whether they’re on a winning streak or a losing streak. On a winning streak, they think that luck is with them and they should stretch their calling to take advantage. On a losing streak, they just don’t care.

6.
This means that you should value bet less often into opponents who are conspicuously lucky or conspicuously unlucky.

7.
Streaks can be seen only in the rear-view mirror. They always are things that already have happened. They never have any influence on what the next cards will be.

8.
Bet more liberally when winning; bet less liberally when losing. When you’re winning, most opponents are too intimidated to try tricky responses to your bets. They’ll usually call when weak and often won’t raise when strong. But when you’re losing, opponents are inspired. They play better against you. They raise for value when you least expect it. For this reason, value bets simply don’t work as well – and often don’t work at all – when you’re losing.

9.
Players who are complaining about their bad luck seldom bluff. So, seldom call. They would rather just show their bad hands and ask, “See what I mean?”

10.
Never complain about your bad luck. Opponents won’t be sympathetic. They’ll be inspired. And they’ll play better. Simply deny that you’re experiencing bad luck.
That’s the road to profit. – MC