Kick it

Nov. 7th, 2005 01:18 pm
peterbirks: (Default)
(Warning - slight hints of grumpy old man mode to follow):

It was serendipitous that Big Dave wrote about the problem he had with running a poker-related operation — that he did not like most poker players. For, that very night, a fight broke out at Gutshot. One of the participants (well, alright, the bloke who started it) then apologised on the Gutshot forum, said that the two of them had shaken hands, and that he hoped that would be the end of it.

Where are we, in some sink estate pub where you could guarantee a brawl every weekend, but that was okay because a few hours later everyone would be good mates again? I've written several times that poker has, unfortunately, become the new football. A place that people go with their mates for a night out.

I fear that I may have been doing football a disservice.

Gutshot could be playing with its reputation here, as well as future attendance. I for one don't fancy the idea of attending a poker club where there is a vague chance that a fight will break out.

Now, tempers get frayed. And some people resort to violence. They aren't the people I would invite to dinner, or people I would dream of doing anything socially with, but I accept that they exist and, if they are producers, it would be silly to ban them. Fights have broken out in the Vic, Bellagio, and many other places where poker is played legally, simply because a certain proportion of society resorts to physical violence when they get annoyed. In that sense, I guess that I was naive to think that Gutshot would be any different.


Warren Buffett has bottled it. The archetypal "long view" man has (partially) crapped out of his short dollar position after it has cost Berkshire Hathaway about a billion bucks. This may or may not be related to the fact that hurricanes Katrina and Rita hit Berkshire for $2.99bn, which, even for Berkshire Hathaway and its cash pile of $20bn, is a little bit irritating.

As with stockmarkets, the time to make your move is when the last bear has thrown in the towel. Is this the time?

With ¥/$ at nearly 118, I think that it might be. There just isn't that much downside to that level (of course, I said that about oil when it broached $55, and I was wrong there, but I have a better feel for currencies than commodities)

Free Money

Aug. 16th, 2005 01:09 pm
peterbirks: (Default)
Never tell a chancellor of the exchequer that there is no such thing as a free lunch. For a start, it isn't true, either physically or metaphorically. Chancellors get free lunches all the time. Granted, many of them verge on inedibility (I've yet to find a hotel that can serve 1,000 people a decent meal), but you get what you pay for.

The same might be said of the popularity of your currency. In the third-greatest comeback in history (after England at Headingly in 1981 and Lazarus at Bethany in about 31 AD) sterling is once again becoming a currency of choice at foreign central banks. According to the IMF, 4.4% of the world's foreign currency reserves are in sterling, up 0.6% in the past four years. What this seemingly innocuous number hides is that the absolute size of the world's foreign currency reserves have gone up from $1.68tn to $3.73tn. That means that while in 2000 about £42.5bn was held abroad, now there is about £83.8bn. That works out at £8bn a year for five years, equal to £160 a year for every man, woman and child in the country. Not a massive sum, but it's not something to be sneezed at either. We all have had an extra three quid a week to spend because of the increased popularity of sterling as a reserve currency.

And, for Gordon Brown, this is indeed a free lunch. It helps to keep interest rates low (because foreigners are buying our gilts) and the economy moving.

But, as the UK found out to its cost from 1919 through to 1985, and as the US will find out to an even greater cost when its T-bonds cease to be the destination for every bit of other countries' loose change, there is a horrible downside potential. Because when countries start selling your currency, you are in a mess, and it's a mess you can do nothing about. We haven't actually sold these people anything, apart from a "promise to pay the bearer on demand". What we've done is borrowed consumption now in return for paying it back later. That's what America has been doing for the past 25 years. This kind of thing can go on for a lot longer than people expect, even longer than Warren Buffett expects. But that does not mean that it is never going to happen.

You can't really stop countries investing in your currency (and chancellors of the exchequer have an intrinsic self-interest in encouraging it), but what you should do is realize what is happening and plan accordingly. Spend that extra money on something which will last and which will be useful.

How about a massively revamped railway network and restored underground water system? After all, that's part of what the Victorians spent the first wave of extra money on.
peterbirks: (Default)
The strange thing about multi-tabling is that, even if you are paying attention to the players and their styles, you can suddenly find yourself $400 down at $5-$10 and say to yourself "hell, where did THAT all go?"

In a way that was what happened to me yesterday (except that by the end of 300 hands I was "only" $270 down). In one (very small) way, this is good. It means that I am concentrating on playing each hand properly, rather than on how much I am up or down. A few times last month I found myself several hundred dollars up and wondered to myself where it had come from.

But this time I was down, so I thought about where it had gone. My stats were interesting. I had 12 pairs in 300 hands (five short of the expected), but with a reasonable distribution of high and low, and the pairs were in profit on both tables (as they should be!). So, no clue there. Then I remembered three hands, one where with 98s I had seen a board of 6-9-9-4-2 and promptly lost to a pair of sixes. Another where my raise with KQ off in MP2 found a flop of QQ3, a turn of a 5 and a river of a 10 and I promptly lost to a player who cold-called a raise with QTs behind me. And a third where I played KJs aggressively, hit a King on the turn after a rag flop and promptly lost to another aggressive player with KTs who hit a ten on the river.

All three were $100+ swings and were "the way it goes". So, in a way, I had at least some explanation.

I also looked at my VPIP% and raising percentage and saw that at one table I had an almost laughable 28% VPIP$ and a raise percentage of 16%, over 150 hands. Now, unless I had suddenly become a semi-maniac without noticing, this meant that I had been getting a lot of those hands that I raise with, but which this time were going nowhere. Quite simply, I kept missing flops and my continuations got bitten off (more than 90% of the time by better hands rather than rebluffs, I hasten to add!) more than they usually do.

And this can happen. It can happen for a long long time.

So, not unhappy, despite my loss for the month now approaching $400.


Another humorous development over the past, well, five months, has been the precipitous decline of sterling against the dollar. As you may know, I have a semi-permanent "dollar hedge" in position to cover my dollar holdings. This is currently running at a hundred quid a cent (put into place at $1.86 and $1.84).

So, although I am sitting here watching the value of my dollar holdings (in sterling terms) rise nicely (last month's profit, for example, was £223 higher than it would have been last December), that doesn't make it any more comfortable when, over four days, I have to lob a grand into my Financial Spreads account to avoid suffering a margin call.

My current contracts expire in September and I was seriously considering "taking that grand back" from the US, but sterling appears to have bottomed out for the moment, recovering a few cents. Stan James seems to be a bit behind the times when it comes to adjusting their currency rates, so perhaps I should shift most of my dollar holdings there back into sterling.

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