Anyway, Grantland has a great article – The Oral History of the 2003 World Series of Poker.   This was the WSOP that triggered the poker boom, after amateur Chris Moneymaker took home the bracelet and the $2.5 MM first prize.

The article is a tremendous read.   Here are some tidbits (not contiguous – these are excerpts):

Moneymaker: I would normally keep a couple thousand dollars in my PokerStars account. I started with $200, I believe it was, and then I would get up to $2,000, $2,500, cash out. In April ’03, I had 60 bucks in my PokerStars account. I remember I’d cashed out more than I wanted to pay some bills, and then I started a pretty terrible poker run. I sat down to play an 18-player sit-and-go,⁴ and back then, PokerStars didn’t have it broken down all nice and neat like they do now. The satellites and the cash tournaments were all grouped together. I saw that there was a $39 sit-and-go with 17 of 18 seats filled, and I just clicked on it really fast to try and get the last seat. I just jumped in and started playing. It turned out it was a satellite where the winner earned entry into another satellite where the top three finishers would get a seat in the World Series of Poker main event. To be honest, I didn’t know it was a satellite. If I knew I never would have played it.”

Moneymaker: I won the first satellite, then I made it down to the final table in the final satellite, and I was one of the chip leaders. The top three got seats in the World Series plus $1,000 spending money. Fourth place paid $8,000 cash. My friend Bruce [Peery] was watching me play from another computer, and he saw me starting to lose chips. He called me up and said, “What are you doing?” And I said, “I’m trying to get fourth place.” And he’s like, “Dude, don’t do that. Take the dang seat! You’ll never get to play in that tournament ever again.” But I said, “Why do I want to play against the best in the world? I play as a hobby. I’m playing for my house.” But Bruce convinced me to go after the seat after promising me $5,000⁵ in exchange for half my action. So I went ahead and won the seat.”

Dalla: At the end of Day 1, I’ve got the chip-count slips, and there are people all over the world waiting for this information. There’s this huge pile of slips, and I’ve got to type up the chip counts, one by one. You’d write, “Doyle Brunson, Las Vegas, Nevada, 23,300.” I had to do that for all 385 players that survived the day. And I come across this slip — for his name, it said, “Chris Moneymaker.” So I’m thinking Chris is his first name and Moneymaker is his nickname. Chris “Moneymaker” Jones. My first reaction was, “Who is this joker?” If you go back and look at the official end–of–Day 1 chip counts, I put “Chris Unknown” or something. I would not even honor the man by writing “Moneymaker.” So the next day comes and I find Chris Moneymaker. And I said, “Are you Chris? What’s your real last name?” He said, “Moneymaker.” And I’m like, “No, no, what’s your real last name?” And of course, this man has heard this his entire life. So he handed me his driver’s license. And I look at it and all I could do was say, “I’m sorry, I didn’t know that.”

Lederer: Look, he got lucky. He moved in with eights against Humberto and hit his two-outer. But that also scares the shit out of you when you hear about that hand, because he’s capable of anything. And another thing I have to say about Moneymaker is that he was mentally tough. Dan Harrington once told me that one of the most important things you do in a poker tournament is you try and identify the guy at the table at that moment who wants to leave. For some people, that’s right at the beginning of the tournament. Just the pressure of being in the main event is making them so uncomfortable that they want to get out of there. Whatever stage you’re at in the tournament, usually there’s someone who’s at the point where if he goes broke, it’s not so bad because he’s out of the pressure cooker. I was always waiting for that to happen to Moneymaker, and it never did. He wasn’t the greatest player, but he was tough as nails and he was unpredictable.

Boyd: I was playing with Moneymaker on Day 4. I got a pretty good tell on him. He was the kind of player who, if you checked to him, he was going to bet. All the time. And he had something, it was almost like out of a Hollywood movie, where he would flare his nostrils when he was weak. It was like a bunny, man. So I was like, This is going to be so easy. All I gotta do is check to him and let him bet, and I’ll just look at his nostrils, and if they start flaring, I’ll come over the top of him. And that’s what I did in our big famous hand.

Harrington: I’ve played a lot of different games, chess, backgammon, whatever, where you had to put in long, grueling hours. If you get down near the end, where victory depends on you being alert, I could dig down and get something out of myself to give that final push. Well, at that final table, I dug down, and there was nothing there. I hit the wall. Here’s how bad it was: When it got down to me, Sammy, and Chris, I wanted to bet 75,000, which was the right bet for that situation. I sat there and I couldn’t calculate how to make the bet. I had a whole bunch of 25,000 chips in front of me, and I could not figure out how to get to 75,000. It was an insurmountable problem.

Harrington: I couldn’t come up with a coherent strategy. When it was just the three of us left, Sam Farha was sleeping at the table, I was dead on my feet, and there’s Chris Moneymaker over there bouncing around like this was the greatest thing since sliced bread.

Harrington: After I busted in third place, ESPN asked me for a prediction, and I told them, “No one over 40 is ever going to win this tournament again.” It’s become an endurance contest. The next year, I was at the final table again. I was sitting next to a younger player. He nudged me and said: “I know you tell everyone how brutal it is on you to get down to this point in the tournament, you don’t have the energy. Well I’m 28, and it’s brutal on me, too.”

Moneymaker: The stress really kicked in when I saw the money. So I started thinking maybe Sam and I need to talk about a deal here. I said to Sammy, “Let’s leave the table and go to the bathroom.” So we walked into the bathroom and I said, “You want to split the money evenly and play for the bracelet?” Sammy’s response was, “Instead, we can put it all together — the $2.5 million and the $1.3 million — and play for the whole thing.” Like winner take all. At the time, I thought he was joking. But knowing Sammy now, he probably wasn’t. He said, “In all seriousness, I have more experience. I think I need a little bit more.” Like I should give him more than an even split. I’m like, “Dude, I got you 2-to-1 in chips! Are you crazy?” He’s like, “I think I need more.” So I’m like, “We’re playing it out then, straight up.” Him thinking he deserved more — that really pissed me off and made me want to crush him.

Farha: He said, “Let’s chop it.” I said, “No, chopping is not fair.” He said, “Give me an offer, I’ll do whatever.” I said, “Well, I don’t want to embarrass you with my offer.” That’s exactly what happened. Honestly, I knew I’m making a mistake, but it’s an ego thing. Even though I’m so tired, I figured this kid can’t beat me, even if I die on the table.

Click over and read the entire account:

Grantland – When We Held Kings

-KD

The post The Oral History of the 2003 World Series of Poker appeared first on Kid Dynamite's World.

-KD

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So here’s the story of my latest order, which I think is pretty interesting from a logistical perspective, and I’d love it if anyone has insights on the how and why.  I’m building an outdoor run for my chickens.    I bought 2 rolls of 36 inch chicken wire, and 1 roll of 24 inch hardware cloth.   I also happened to order some 2-stroke engine mixing oil for my chainsaw/weedwhacker/leaf-blower.

All items were sold by Amazon.com, and I am an Amazon Prime customer.   The checkout page indicated that my items may be shipped in two separate packages, but I didn’t really think much of it.

Today, the UPS ($UPS – no positions) guy came to deliver me a package.  He had one box.

“Just one?” I asked.

“That’s it,” he replied, and gave Oscar a dog biscuit.

I threw the package on the porch and went inside.   Five minutes later the FedEx ($FDX – no positions) guy pulls into my driveway.  He has another box for me – the rest of the order.  Ok – fine.  Interesting, but wait – it gets better.

While I was busy imagining what sort of freight war would have broken out in my driveway if the FedEx guy and the UPS guy had arrived at the same time (I’m picturing a sort of West Side Story dance-off of rural shipping carriers…), I notice that both packages shipped from the same Kentucky warehouse.  Hmmm – that seems strange.   But wait – it gets better: I opened them.

In package 1, delivered by the UPS guy, was 1 roll of the 36 inch wide chicken wire, the roll of 24 inch hardware cloth, and the Tanaka mixing oil.  In package 2, delivered by the FedEx guy, was the other roll of 36 inch wide chicken wire!

In other words, I’d (obviously?) been expecting the FedEx guy’s package to have the roll of 24 inch hardware cloth – which I’d only ordered 1 of.

Mrs. Dynamite happens to be an expert in logistics.  She hypothesized that perhaps Amazon’s warehouse only had 1 roll of the 36 inch chicken wire in stock, and thus they had to drop-ship the other roll to that warehouse before sending it out to me.    Her theory gained credence when I checked Amazon.com and saw that Amazon is out of stock in the 36 inch chicken wire now – you can still buy it from other sellers, but it’s 3-5 weeks if you want it from Amazon.com as the seller.

In case you’re a visual learner, here’s a snapshot of what the contents of each package were:

1) The UPS package:

2) The FedEx package:

Delivered via FedEx

I find it fascinating that 1) they split up 2 orders of the same item, 2) both shipments appear to come from the same warehouse in Kentucky, and 3) they were delivered by different carriers.

Some readers will look at this and say “this is an example of how stupid amazon is  – sending two separate packages and two separate delivery carriers from the same warehouse to the same destination on the same day.”   That is a *possible* interpretation, but I am guessing this delivery has more to do with logistical mastery than with logistical incompetence.   I’m guessing that Amazon posesses such logistical wizardry that they minimized their costs across carriers while making sure that I would still get my items on time, given their likely inventory constraints on the items I ordered.

Anyway… I find it fascinating…

-KD

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You can read the Subcommittee letter on the hearings here.   If you look at it, there’s nothing insane there.  The facts as I understand them are these:

- the U.S. has a complicated corporate tax code

- Apple ($AAPL, no positions) takes advantage, legally, of the nuances of the U.S. corporate tax code

- AAPL is not breaking any laws

- Congress makes the tax code

- Congress (or at least some members of Congress) would like to close “loopholes” like the ones Apple is using to minimize their U.S. tax bill.

So far so good.     Here’s the important part, though:  you, dear reader, may not like how Apple manages their tax liability.   I may not like how Apple manages their tax liability.   You and I may be outraged – you and I have that right.   Ya know who doesn’t have that right?   Hint: it’s the guys who make the tax code – CONGRESS.

The hypocrisy of these goofballs making laws and then dragging Apple CEO Tim Cook before a committee to chastise him for playing by the rules that they made – while making it clear that they are not alleging any illegality on Apple’s part – is beyond absurd.    Hey Carl Levin – you don’t like the tax code? CHANGE IT!

Of course, that’s what the committee is wants to do – they even say as much in their brief:

“Recommendations. Based upon the Subcommittee’s investigation, the Memorandum makes the following recommendations.
1. Strengthen Section 482. Strengthen Section 482 of the tax code governing transfer pricing to eliminate incentives for U.S. multinational corporations to transfer intellectual property to shell entities that perform minimal operations in tax haven or low tax jurisdictions by implementing more restrictive transfer pricing rules concerning intellectual property.
2. Reform Check-the-Box and Look Through Rules. Reform the “check-the-box” and “look-through” rules so that they do not undermine the intent of Subpart F of the Internal Revenue Code to currently tax certain offshore income.
3. Tax CFCs Under U.S. Management and Control. Use the current authority of the IRS to disregard sham entities and impose current U.S. tax on income earned by any controlled foreign corporation that is managed and controlled in the United States.
4. Properly Enforce Same Country Exception. Use the current authority of the IRS to restrict the “same country exception” so that the exception to Subpart F cannot be used to shield from taxation passive income shifted between two related entities which are incorporated in the same country, but claim to be in different tax residences without a legitimate business reason.
5. Properly Enforce the Manufacturing Exception. Use the current authority of the IRS to restrict the “manufacturing exception” so that the exception to Subpart F cannot be used to shield offshore income from taxation unless substantial manufacturing activities are taking place in the jurisdiction where the intermediary CFC is located.”

Great – you don’t like the rules you made – change them!  Nothing wrong with that.   But don’t act like incredulous grandstanding douchebags in the live hearing, when Apple is playing by the rules YOU made.

It’s not every day that I agree with Senator Rand Paul, but I think he’s on point here:

“If anyone should be on trial here, it should be Congress,” Paul continued. “I frankly think the committee should apologize to Apple. The Congress should be on trial here for creating a Byzantine and bizarre tax code.”

It’s pretty rare that I agree with most of what Rand Paul says, but I think that I probably could have just copied and pasted his remarks and avoided writing this post entirely.   I’ll just grab mass excerpts instead. Note that these are excerpts, not complete text:

“Tell me one of these politicians up here that doesn’t minimize their taxes. Tell me a chief financial officer that you would hire if he didn’t try to minimize your taxes legally. Tell me what Apple has done that is illegal…”

xxxx

“I am offended by the spectacle of dragging in here executives from an American company that is not doing anything illegal. If anyone should be on trial here, it should be Congress.

I frankly think the Committee should apologize to Apple. I frankly think Congress should be on trial here for creating a bizarre and byzantine tax code that runs into the tens of thousands of pages, for creating a tax code that simply doesn’t compete with the rest of the world…”

xxxx

“This committee will admit: Apple has not broken any laws. Yet, they are forced into a show trial at the whims of politicians, when in fact; Congress should be on trial for chasing the profits of great American companies overseas. You haul before this committee one of America’s greatest success stories and you want applause?

I say, instead of Apple executives, you should have brought in a giant mirror, so we could look at the reflection of Congress because this problem is solely and completely created by the awful tax code.

If you want to assign blame, the Committee needs to look in the mirror and see who created this mess, see who created the tax code that drives American companies overseas.”

and from the later questioning:

“I think we need to restate for the record and be very clear here that neither this panel or anyone in the committee has said that Apple broke any laws.  They are brought before this committee and harangued and bullied because they tried to minimize their tax burden legally. I would argue that it would probably be malpractice for them not to do so. If you have a publically held company and you have shareholders and your mandate to your CFO is please maximize our taxes I am guessing that would probably be something shareholders wouldn’t accept. I don’t know of any taxpayers who really do that…”

xxxx

“Yeah and as a policy question talking about taxes, I think, is an appropriate thing for Congress. Bringing in an individual company and vilifying them for doing something that is in every business’ mandate is objectionable. That’s why I object to these entire hearings because talking about policy is one thing.”

What really sucks here is that Congress drags Apple executives in to answer questions that Congress already knows the answer to  (as evidenced by Levin’s lengthy report) !!!   It’s not even like they were questioning Apple to find out *how* Apple was minimizing its tax liability (which would have been reasonable: find out how, and work to fix it) – they already know how – they just wanted to grandstand.  Dog and pony show.   Congress at its worst, in my opinion.

Here’s the full text of Rand Paul’s prepared remarks

And here’s some questioning from Senator Paul to drive the point home.

-KD

disclosure: no positions in $AAPL

related:

Subcommittee Findings

Matt Levine: Senate Discovers There’s a Tax Code

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2.5 gallon batch:

mash 60 minutes at 152 degrees:

4.5lbs Maris Otter

0.5 lbs Biscuit malt

0.5 lbs rye malt

0.4 lbs Caramel/crystal 60

0.2 lbs chocolate malt

sparge with roughly 3 gallons of 170 degree water.  bring to boil, then add:

1/8th oz Chinook

after 30 minutes, add another 1/8th ounce of Chinook

after another 15 minutes (45 minutes total) add 1/2 oz Fuggle and 1 tablespoon of crushed peppercorns

after another 5 minutes (50 minutes total) add 6 tablespoons of mustard seed

after another 5 minutes (55 minutes total) add another 1/2 oz Fuggle.

after another 5 minutes (60 total) remove from heat, chill to 70 degrees, and pitch yeast:

Safale T-58

My original gravity came out at 1.046.  I’ll give it three weeks to ferment (basement is roughly 60 degrees right now) before bottling.

-KD

The post HomeBrew Batch #29 – Mustard Brown Ale appeared first on Kid Dynamite's World.

This also isn’t a post about bull-riding, where you succeed after 8 seconds: it’s about evicting an about-to-puke dog from the bed, where you fail after 8 seconds.

Last night at 3:30am, my 7th sense somehow alerted me to the fact that foster dog Nikko, who sleeps on a pillow in between my pillow and Mrs. Dynamite’s pillow, was about to puke.   For those who don’t know, if you’re paying attention to your dog, you have about an 8 second warning from the time he starts to show signs of puking until the puke hits the ground/rug/bed wherever he is.

So it’s 3:30am, I’m in a deep sleep, but I sense a disturbance in The Force.  I wake up, say “uh-oh” out loud, and roll right to turn on my bedside lamp.  Mrs. Dynamite, like a top tier Jedi, reaches to the left to turn on her light then rolls right to grab Nikko with two hands and then rolls back left to deposit him safely on the floor just as he barfs – harmlessly onto the wood floor.

I was in awe of my wife’s ninja-esque deep sleep dog-puke natural reactions.   It was as natural as Jose Canseco’s swing – as if she’d practiced it fore 10,000 hours, Outliers style.

I grabbed some Fantastik from the bathroom closet, wiped up the little pile of puke – it seems as though eating a small stick that afternoon may have been the root cause – and we all got back in bed.

obligatory picture of Nikko:

related:  The Pete Rose Slide and Dogs Puking in Bed

also related:  my Jose Canseco Vegas Story

-KD

The post The Most Exciting 8 Seconds of My Night appeared first on Kid Dynamite's World.

But fear not, dear readers, I’ve still got “it.”

I’m going to give you one guess as to which of your favorite financial* bloggers dominates the NUMBER ONE GOOGLE SEARCH result for the term “women pooping dogs”

Not Josh Brown.

Not James Altucher.

Not Tyler Cowen.

Not Barry Ritholtz.

Not Paul Krugman.

that’s right – it’s yours truly.   Number one.  King of the mountain.

-KD

* I use the term “financial blogger” with significant artistic license when I’m describing myself

The post The Kid’s Still Got It appeared first on Kid Dynamite's World.

That something was Fish McBites.

Fish Fucking McBites?  Are you kidding me?  As the classic Saturday Night Live skit asks, “Who are the ad wizards that came up with this one?”   Not even cutesy advertising these days can make me want to buy Fish McBites at McDonalds, but let’s go to the ad anyway:

Did you get up and dance?  Did you throw up in your mouth?  Did you just make a disturbed face like you’d make after watching your dog eat his own poop, puke it up, and eat it again?

So this morning I Googled “Fish McBites” and lo and behold – these things are NOT flying off the shelves.

McDonald’s Fish McBites Flounders: New Product Line Doesn’t Hook Consumers (This one is chalk full of fish puns)

McDonald’s Fish McBites Aren’t Hooking Customers

Fish McBites Fail To Spark McDonald’s Sales

Reading those articles, I found out that Fish McBites are the first new Happy Meal rollout in over a decade!  Really, McDonalds?   Lemme give you some free advice:  no one wants to eat fish at McDonalds.  We don’t want Filet-o-fish, we don’t want Fish McBites, and we don’t want McSushi.    Of course, I generally don’t want *anything* at McDonald’s, so maybe I’m biased – maybe I don’t actually speak for The People on this one.   I do, however, have a feeling that if you rolled out a Buffalo Chicken McBite you could lure me into your store.

I guess the only thing left to do here is to revisit this classic South Park Fish Sticks joke:

-KD

full disclosure: I have not had Fish McBites, and I will not have Fish McBites

The post Is Anyone Surprised That Fish McBites Suck? appeared first on Kid Dynamite's World.

There was a period of time where I played poker “professionally” in the sense that it was my only source of income.  I put “professionally” in quotes because although it was my only source of income, I could not pay my bills on my poker income alone.   But I missed out on what was perhaps the most lucrative part of the poker bubble that began with Chris Moneymaker winning the main event at the 2003 World Series of Poker:  I was never good at online poker.

I’m not afraid to admit this – and there’s a trading analogy here as well: you have to know your strengths and methods, and cater to them, rather than trying to force yourself into someone else’s molds or methodologies.   While I could have sat home and tried to force myself to fit some online poker mold that was unnatural for me and that I hated, I instead ventured out daily to live cash games held privately in NYC.

Sometimes people ask me why I disliked/sucked at online poker, and I have trouble explaining it.   It’s not that when I sit at the table with you I can look into your soul.  Although “feel” is a huge part of the live game, when you’re playing with experienced players, it wasn’t (for me at least) based on specific physical tells like you might read about in a book or see in a movie (no one peeled apart their Oreos and Teddy KGB’d them).   I think it was more that I was used to playing with the same players day after day, and I felt that my biggest advantage was my ability to get a better grasp of what was going on inside their head than they had of what was going on inside mine.

My problem with online poker was that I was just staring at numbers and names on a screen.   In a live game, even if I’ve never played with you, I can tell within 10 minutes what sort of “clue” you have.  This isn’t some special power I have, of course, I’m guessing most poker players would say the same thing.   Online, however, I was lost.  Clueless.  Is my bits & bytes opponent making a savvy advanced play, or is he just a donkey?   No clue.     Yes, I know some of you are quite good at figuring this out – I’m not saying it can’t be done, I’m just saying that I wasn’t good at it!

Now, as online gambling is starting to show signs of making a comeback in the United States, and given that I live in the woods of New Hampshire where, believe it or not, high stakes no limit hold’em cash games don’t just pop up daily, I am thinking that there will be a time where I will have to re-dedicate myself to learning the online game to take advantage of potential opportunities as legalization spreads.   Hopefully, I won’t have to get a Facebook account ($FB, no positions) to take advantage of Zynga Poker ($ZNGA: no positions)  if and when it eventually throws its hat into the Legal U.S. Online Poker ring, but if that’s where the fish are, so be it…

Anyway, let’s get all @bclund and take this back to a trading analogy, shall we?   Most of us are, by nature, mean reverters: we’re hard wired to buy low and sell high.    I wrote a post about this topic a few years ago, but the cliff notes are that momentum strategies – the “opposite” of mean reversion, in a way – are the ones with the fat positive tails – buy HIGH can be where it’s at.  Note, I didn’t say buy high IS where it’s at – and I think I explained this concept clearly previously.   I think Josh Brown’s recent post “money doesn’t follow value, it follows performance” is saying something very similar about the power of momentum.

But does this mean you should just run out and start buying stocks making new highs?  Of course not.  There’s a METHOD to all methodology, and it’s not just about blindly chasing momentum.   What I have found, personally, is very much in line with the data that Jeff Degraaf illustrated, which I talked about in the earlier post:   when you’re early in the momentum trade, you get whipsawed like nothing else:  the average return of a trade is actually negative.  You end up with a lot of small losers, and then, hopefully, the HUGE winner.   Now, this is where methodology, tilt, and the online poker analogy come to tie this whole story back together.   It’s easy to get whipsawed repeatedly trying to catch a big momentum move.   Perhaps I suffered this fate because my methodology was wrong and I was entering trades prematurely – but that’s something that I needed to work out, just like I need to work out an effective adaptation to the online version of the game I love to play live.

So this post kinda rambled back and forth across the topics of poker and trading.   My poorly-stated (perhaps) point is that the two endeavors have many traits in common:  there is someone trying to take your money on the other side of the trade/table, you have to avoid getting thrown off your game, and there are many different ways to play the game: I find that I have the best success when I do what comes naturally, rather than trying to imitate what I see other people doing, or to try to fit myself into someone else’s mode/model.

Momentum and Mean Reversion

Fear and Greed

-KD

The post Poker and Trading – Birds of a Feather appeared first on Kid Dynamite's World.

“He had just made the final out in a city where his name is booed, his jersey is reviled, and his team had been swept….Kemp was waiting to cross the diamond to sign an autograph for a terminally ill Dodgers fan, waiting to summon the passion necessary to pass along the hope that he now found so precious…Kemp handed the kid the autographed ball. He handed him his cap. He tore off his dusty No. 27 jersey with the buttons still fastened and put it on the kid’s lap. Then he bent over and removed his shoes and handed them over to complete the grand slam.”

Here’s the video:

Kemp commented:

““I didn’t plan on taking the jersey off, but it’s something I felt would probably cheer him up a little bit … and that was my first time taking my shoes off in front of the fans,” Kemp said with an embarrassed grin. “But life is so much bigger than baseball.”

Kudos, Matt Kemp.  Quite a gesture.

-KD

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