Knowing When to Fold ‘Em

There’s certainly a time to hold ‘em:

If you’re playing with a group and you get a good hand, there’s a temptation to fold at the first sign of a significant raise. You won’t get a chance to take everyone’s money if you chicken out, and the other players know this.

This kind of resolve is crucial in poker, investing, and life. Toughness and tenacity are traits that are rightly admired, and there are times when doubling down is the unambiguously correct thing to do.

Then, there are all the other times.

If you’re playing poker at a table of five people, you should probably fold the majority of your hands. You already know that you’re only going to have the best hand 20% of the time, but determining whether this particular hand is one of those times isn’t possible until the end of the hand, when you get to see all the cards.

This mentality is useful in a lot of life’s arenas. Take writing, for instance. If you simply write and publish the first thing that comes to mind and flows through to your fingers, you’re very likely to produce the human version of AI slop (we used to simply call this slop).

On the other hand, if you throw away four out of your first five ideas for how a sentence should sound, you’re probably going to come up with a better sentence, on average. Being unafraid to discard your own work takes some courage, and it also takes the experience to know that you’ll make something else that’s probably going to be even better.

One helpful phrase that sums up this concept well is sunk cost fallacy. It feels like you’ve put a lot into your work, or you’ve already invested so much money, or you’re already down by so many chips. You might as well double down, right?

Well, no. An even better phrase to remember might be throwing good money after bad.

Knowing when to fold ‘em is the tricky part.