The House Advantage: Playing the Odds to Win Big In Business [Hardcover]

Jeffrey Ma (Author)

Book Description

Publication Date: July 6, 2010

As part of the notorious MIT Team depicted in Ben Mezrich’s now classic Bringing Down the House, Jeff Ma used math and statistics to master the game of blackjack and reap handsome rewards at casinos. Years later, Ma has inspired not only a bestselling novel and hit movie, but has also started three different companies—the latest of which, Citizen Sports, is an innovative marriage of sports, betting, and digital technology—and launched a successful corporate speaking career. The House Advantage reveals Ma’s cutting-edge mathematical insights into the world of statistics and makes them applicable to a wide business audience. He argues that numbers are the key to analyzing nearly everything in the world of business, from how to spot and profit from global market inefficiencies to having multiple backup plans in anticipation of every probability. Ma’s stories and business lessons are as intriguing as they are universally applicable.

Editorial Reviews

From Publishers Weekly

Ma, the math whiz and subject of Ben Mezrich's bestselling Bringing Down the House, turns his savvy to business. A former professional card counter on the MIT blackjack team, Ma used statistics to beat the game, and his enthusiasm for the power of data and for overcoming emotion to make the best decisions proves persuasive. Though his lessons aren't particularly new, his methods and thrilling stories of card counting in Vegas gives his book a compelling boost. He instructs leaders to recall that past performance, like a dealt blackjack hand, has an impact on the future; to avoid groupthink and a hot hand, or overconfidence, at all costs; and to prioritize what the data says. Even those who do not consider themselves math types can benefit from posing business issues as follows: a simple question helps focus a complex mathematical model and that complex mathematical model helps solve a very important business problem. It's a spirited—if simplified—approach to decision making. (July)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

Praise for The House Advantage:

“From the minute I met Jeff Ma, I knew that my life was about to change; a mathematical genius who had turned Vegas upside down with a system that has since made him an international sensation, Jeff taught me more about money in a single neon-laced weekend than I could ever learn from a library full of CEO biographies. A perfect companion to Bringing Down The House, Jeff’s book opens a window into a world where high-level statistics mingle with heart-pounding gambling tales. To put it simply- this is a business book like no other you’ve ever read before.”-  From the Forerword by Ben Mezrich, NY Times Bestselling author of Bringing Down The House and The Accidental Billionaires

"Few things like experiencing the ups-and-downs of beating the casinos at blackjack can better equip one to understand risk and reward in visceral and concrete way. The House Advantage  is an efficient and enjoyable read that reflects Jeff's nuanced understanding about how to run the numbers in a real-world context. " – Nate Silver, Statistician and Founder of FiveThirtyEight.com

"Jeffrey Ma has written a work of philosophy in the guise of a business book...The House Advantage is an urbane blend of human observation and math smarts, business sense and common sense." - William Poundstone, author of Priceless: The Myth of Fair Value (and How to Take Advantage of It)

 

“The House Advantage sets the standard for explaining how the use of data and analysis is revolutionizing how businesses and sports teams will be successful in the future. Jeff uses his unique combination of theory and business savvy to illustrate this important trend in a way that is packed with entertaining stories and practical examples to get started. Sports and business executives ignore this ground-breaking book at their peril.“ – Daryl Morey, General Manager of the Houston Rockets

 

“Read Jeff’s book if you want to understand what analytics can do for your business. His gambling and sports analogies tie well to business themes and reveal sound analytical thinking. Going on your gut just doesn’t cut it today.” - Dr. Jim Goodnight, CEO of SAS

 

"There's nobody else on earth who could have written this book." - Rob Neyer, ESPN.com

 

"Since graduating from MIT, Jeff Ma has excelled in professions as diverse as card-player, options trader, and internet entrepreneur. His experiences make for an absorbing read about the indisputable role of statistics and objective analysis in the making of smarter business decisions.  Jeff’s story is compelling evidence as to why leaders in every field should believe in “The House Advantage.” - Billy Beane, General Manager of the Oakland Athletics

 

Praise for Jeff Ma:

 

"Finding the statistical kernel that tells a truer story seems to be Ma's speciality" - Justin Berton, San Francisco Gate

 

"So, who is Jeff Ma? He's a charming, intelligent guy who has gone through all of the ups and downs of the "City of Sin" and lived to tell his tale." - Brian Tallerico, Deadbolt.com

 

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: Palgrave Macmillan (July 6, 2010)
• Language: English
• ISBN-10: 0230622720
• ISBN-13: 978-0230622722
• Product Dimensions: 9.5 x 6.4 x 1 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (17 customer reviews)
• Amazon Best Sellers Rank: #583,731 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

9 of 10 people found the following review helpful:

5.0 out of 5 stars Great Read For All Those Interested In Making Great Decisions, July 27, 2010

By 

Jack Bowen "Author of 'If You Can Read This: ... (Bay Area) - See all my reviews
(REAL NAME)   

This review is from: The House Advantage: Playing the Odds to Win Big In Business (Hardcover)

We're not designed to think unemotionally nor about abstract statistics. But Ma's book shows us that if we do learn to do so, we can achieve something we are designed to pursue--success. This book outlines and explores just how to do that. It's a great read for various demographics: the not-so-business savvy who wants to become so; the "layperson" looking to find ways for making better life-decisions; or the expert businessperson looking to uncover an edge in bringing down their own sort of house.

Ma describes things for the reader that will get you up to speed on both your gambling--i.e. the nuances of 21--and your business-speak--i.e. I finally learned what an option is and then how it relates to volatility and the Mexican economic crisis' affect on the U.S. dollar--without turning the expert off in either arena. Not an easy task as a writer and is done exceptionally well here.

The book is of the same genre as Lewis' Moneyball (a book Ma cites as life-changing in the Acknowledgments). Ideal for the neophyte interested in economics, finance, etc., combining the highfalutin world of casino gambling with modern day finance. In a sense, Ma urges us to put our faith in something that we believe in--which is rooted in clear thinking and statistics--and forge ahead, regardless of the valleys that may occur in the arena of "ups and downs."

Ma uses well-told personal anecdotes to explain cognitive errors common in academic psychology such as the gambler's fallacy and confirmation bias. Clearly not a man of superstition, frowning up on the "same-roller" phenomenon in craps and the concept of `statistical atheist', making sure the reader knows he's not involved in magic or some form of voodoo. Instead, he employs a more stoic approach that follows the logic--follows the math--and never gives up.

This book isn't just fun, it isn't just interesting (though it is both of those) but it's also something that will help the reader make better decisions both inside the business world and out.

5 of 6 people found the following review helpful:

5.0 out of 5 stars Great Introduction to Non-Results Oriented Thinking, August 2, 2010

By 

chantech - See all my reviews

This review is from: The House Advantage: Playing the Odds to Win Big In Business (Hardcover)

As someone with a very similar background to Ma's (engineering background, entrepreneur funding a company while playing poker professionally, and heavily involved in sports analytics from a predictive standpoint) I found this book to be an an articulation and formalization of concepts that every successful gambler has honed and inherently understands and has a tough time explaining to the general population. By definition, gamblers have trained themselves to evaluate the EV of every situation and make the most +EV decision while remaining emotionally detached from the results. Successful gamblers also understand bankroll management and non-results oriented thinking. We're trained to learn from trial and error, to correct mistakes via feedback, but variance has an inherent way of throwing these feedback mechanisms off. The way to better decisions, as Ma says, is to understand the underlying mathematics, ask the right questions, and maintain discipline.

Perhaps the most glowing recommendation I can make about this book is via my own personal experience. For the past couple months I've had a conversation with my father, a trained engineer and a brilliant man, about poker and investing. Each time, I tried to make the case for non results oriented thinking. The first example, I brought up the fact that I was up a large amount playing poker in Vegas and ended up marginally up. His statement is that I should have quit while ahead while my argument was that as long as I had an advantage (I was +EV in the game) I should try to realize this advantage by playing as many hours as possible, because in the long run, I'd hit my hourly expectation. He argued while that was true, my time horizon in Vegas was 1 weekend. I tried, unsuccessfully to argue with him that my time horizon was every time I played poker going forward, assuming my underlying assumptions about my EV in the game was still correct.

Likewise, he owned a stock that he bought at 3.00 which went to 16.00. He didn't sell it and kept saying he should have sold it while I argued that the stock was either +EV to own (undervalued), or overvalued and he should sell. If he thought it was undervalued, he should buy more, wagering a portion of his retirement account (his bankroll) proportionate to his edge. The fundamental mistake he made was overbetting on that stock and his inability to separate himself emotionally from the results given his limited time horizon (retirement looming).

Ma's text does a great job of explaining these concepts to someone who hasn't honed these thought processes, someone with no gambling or statistical background.

I think the book could have used a little bit more detail and explanation of some of the technical concepts. While Ma does a great job of simplifying the concepts, he doesn't provide very in depth technical explanation (he may have lost his audience). For example, more specifics on some of the metrics the 49ers used, more in depth explanation of the Kelly criterion, expected growth, how to manage an investment bankroll in relation to Kelly.

Either way, it's a book that I think everyone should read and those familiar with the concepts will gain something from it.

7 of 9 people found the following review helpful:

5.0 out of 5 stars Excellent book - Very well-written about an interesting subject, July 27, 2010

By 

Alex P. (San Francisco) - See all my reviews

Amazon Verified Purchase

This review is from: The House Advantage: Playing the Odds to Win Big In Business (Hardcover)

As someone who has read many different books and articles on the subjects of investing, gambling, sports analytics, and business, I think Jeff Ma has done an incredible job of melding his experiences as a blackjack winner, successful entrepreneur, and sports consultant to write a fascinating, cohesive book with practical applications for anyone looking to effectively solve problems across various diverse areas of interest.

The book does a great job of taking some of the most common problems that can derail a successful venture and showing you how to achieve better results using an objective reality-based approach to problem solving. To help, he uses numerous real world examples through discussions with an interesting array of successful players in business, sports, finance, and gambling (see the list of impressive blurbs for the book) to help drive home many important principles that somehow get overlooked these days (for example: this past financial crisis).

Throughout the book, Ma shows how focusing on objectivity and data will help you make better decisions but, even more importantly, he is not a slave to numbers and constantly points out that making the right decision is way more than just access to and using numbers, it's also about asking the right questions and making sure you're interpreting your data properly so that it makes sense. His chapter on correlation versus causation is especially good at this as it points out just how important it is to think through what numbers mean as opposed to blindly following them.

Some of the most impressive chapters are towards the end of the book when he writes about how to humbly and simply present stats and data-analysis to people who are naturally predisposed to dislike and be turned off by math as well as a discussion of successful people who use their gut and intuition to make the correct decisions. Again, it shows that Ma isn't interested in using numbers and data as his only weapon in a fight to prove his method is the only correct one but as tools to help him come to the right decision. That type of nuanced thinking is valuable as it's frequently overlooked in the statistical community where dogma causes people to be dismissive of thinking that doesn't mesh with theirs which hurts the ultimate goal of being able to achieve successful results.

I've recommended this book to the partners of the investment management firm I work at as I think it does a great job of presenting important business and investing concepts simply and effectively and I look forward to Ma's future projects.