When Winning Is Losing
Part of my motivation for discussing the “Living Undeterred” mindset stems from my desire to discuss areas of my life I am least proud of. In doing so I have come to appreciate the fact, as I help others I am also helping myself. One area of my life I don’t spend very much time discussing was the issue I had with gambling years ago. I have been advised by more than a few that this is a topic I should avoid. However, I shall remain, undeterred.
In my late 20’s and early 30’s, I was single and worked extremely hard in building my investment company from scratch. Most of the success I had was either plowed back into my company or I found ways to spend it on myself. My drinking and gambling increased as did my success in the investment industry. The allure and appeal to gambling seemed to satisfy an intensifying thirst for excitement and a hunger for competition. Gambling for me always had far less to do with money and much more to do with competing. That “rush” or “high” obtained by placing that winning bet, or the anger and frustrations to cover a loser. I felt like the proverbial hamster in the cage. The chase, the romance with paying a bookie in an alley, or hitting that last-second shot to win the bet. I had slowly become an addict.
My gambling started in college. Occasional bets on a baseball game turned into weeknights at the dog track. Yes, we had a live dog track betting in college. I was betting money I did not have at that time in my life however I kept asking myself, who was I really harming? We all have a “talker and a listener” inside our minds, conversations we have daily with ourselves. The real gift is getting the “talker” to dominate the conversation in a positive way.
The issue I had with gambling was easy, I was NEVER satisfied. There was no amount of money or bets I could possibly win. If I doubled, tripled, or quadrupled my money I always felt there was more. Why not win ALL the casino’s money? It was then I realized the true insanity this had become. Perhaps I was bored? With ADD it’s hard to imagine this occurring but then again being distracted constantly allowed me to never realy deal with these issues head on. When I drank and lost money my anger intensified to the point where it had adversely affected those I cared about the most. My worst times with my best friends were always in a casino and inevitably involved alcohol. As my interest in my career blossomed I came to realize there is a very fine line between gambling and investing, almost undetectable. This narrow line, to me, eventually revealed itself and became crystal clear. The difference between a gambler and an investor is and always will be, TIME. An investor has plenty of it, a gambler never enough.
Losses hurt more than wins feel good. This isn’t just a convenient saying this is a scientific fact. Loss aversion is an important concept associated with gambling and investing. It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gains. Prospect theory, also called loss-aversion theory, a psychological theory of decision-making under conditions of risk, was developed by psychologists Daniel Kahneman and Amos Tversky and originally wrote about it in 1979. A good example would be to consider owning ten stocks and eight made money. Most people would rather dwell on the two that didn’t and commit more negative emotional attachment to the losses than feel good about the eight that did well. We tend to gravitate to the negative aspects of life it would seem.
My “epiphany” moment came after I returned from yet another trip to Vegas empty-handed. A gambling friend of mine said the best thing I had ever heard and quite honestly spelled the end of my problem gambling from that point on in my life. He said, “you can never truly win in gambling, when you win you lose.” I interpreted this as when you win, it reinforces or validates that this is acceptable behavior and ultimately seduces you to bet again. Eventually, you will lose and the cycle repeats itself over and over and over. WHEN YOU WIN YOU ACTUALLY LOSE. Powerful stuff that for some reason really resonated with me. I have learned to use this powerful phrase to end my abuse of alcohol and has provided me a very healthy frame of reference in many aspects of my life. In life, it’s sometimes better to lose than to win.