Page 134 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)
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Some of the best examples of smart financial behavior can be found in an
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unlikely place: Las Vegas casinos.
Not among all players, of course. But a tiny group of blackjack players who
practice card counting can teach ordinary people something extraordinarily
important about managing money: the importance of room for error.
The fundamentals of blackjack card counting are simple:
No one can know with certainty what card the dealer will draw next.
But by tracking what cards have already been dealt you can calculate what
cards remain in the deck.
Doing so can tell you the odds of a particular card being drawn by the
dealer.
As a player, you bet more when the odds of getting a card you want are in
your favor and less when they are against you.
The mechanics of how this is done don’t matter here. What matters is that a
blackjack card counter knows they are playing a game of odds, not
certainties. In any particular hand they think they have a good chance of
being right, but know there’s a decent chance they’re wrong. It might sound
strange given their profession, but their strategy relies entirely on humility
—humility that they don’t know, and cannot know exactly what’s going to
happen next, so play their hand accordingly. The card counting system
