Customer Reviews

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

5 star:		(10)
4 star:		(3)
3 star:		(1)
2 star:		(0)
1 star:		(3)

 

 

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.

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.

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.

Before diving into this book, I was a little skeptical of the practical application of a "house advantage" to business dealings. However, Jeff Ma's impressive mathematical skills and business prowess became obvious from the first few pages. Jeff does an excellent job mapping the laws of probability to the board room. If you can get by his MGM Grand sized ego, it is a highly recommended read.

I enjoyed Jeff Ma's book because it showed the rather obvious, but often less discussed, positive correlation between business and gambling. Jeff shows how many of the "tricks" and "rules" of playing winning blackjack can and should be used in business. I especially enjoyed the last couple of chapters that really pulled into focus the importance of knowing the hopes and fears of the people who you are working with/for or against. It hit home for me the fact that sometimes a straight line is not the best way to get from point A to point B.

Loved the book. My wife and I own a small laundromat and I'm also just finishing an Accounting Degree at Brigham Young University-Idaho and had been putting off taking my required statistics class. Last semester I bit the bullet and made it through with a B+. Reading through this book made me wish I had read it before taking my statistics class. It helped me to gain a deeper appreciation for statistics and their uses and now I want to take an advanced statistics course to increase my knowledge of the subject. Ma doesn't make the topic too heavy but he shows the power of numbers in a simplified fashion that would make any kind of a math geek step back and smile.
Great read would recommend it to any small business owner like myself or any other big decision maker for any company.

As other reviewers have shared, The House Advantage takes massive success at blackjack and tries to extrapolate the lessons to professional sports and then big business. Ma makes it to sports just fine, but I can't say that he made it all the way over the line to business success, at least, not in the "soft" world of knowledge management metrics.

The House Advantage is a great read, and I took away more than a few nuggets--esp. about trusting the numbers process to work out the way it statistically will, and making sure you have enough of a bankroll to make it through the valley. (As the country song & Churchill said, "If you're going through hell, keep on going.") It's interesting to read about the places where statistics can be applied without too awfully much manipulation; where incentives (winning) are clear and unequivocal, and rewards are reasonably tied to outcomes.

That's just not the way it is in much of business. Unfortunately, Ma uses the title of Jack Welch's "Straight from the Gut" as a straw man. (It's not clear that Ma has actually read much of what Welch has written.) If I had to pick someone to give me advice about running just about any business, I think the odds favor Jack over Jeffrey by a pretty wide margin.

Hard to say--if business were as straightforward and as simple as blackjack, would more people be able to master it? Or do we get into business because we would be bored out of our minds counting cards all day long? Ma admits he can't find any situation, even poker, that is as tightly controlled (and therefore subject to statistical control) as blackjack, but that doesn't stop him suggesting the lessons of the table can be applied outside the casino. He doesn't get into Six Sigma... funny... that would lead back to Jack Welch pretty quickly.

WRT the rating--the book's a great read; ergo 4 stars not 3. It doesn't deliver all that it promises, ergo 4 not 5. (count the # of reviews on those five stars--lots of first timers in there.) If you do or are trying to do more/better data-driven decision making in a business world, The House Advantage will at worst give you some new ways to think about your challenges. It won't solve any of them for you, and the farther your business is from hiring MIT grads, the less help it will be. But it's definitely worth the time--and if it keeps you away from the roulette wheel, probably worth the money, too (even better--read the library copy, and then you're $25 ahead when you go to Vegas.)

If you want an entertaining book that mixes gambling humor and descriptions about the importance of applying quant models for profiting in business, then this book is your answer. Reads easily and there are great nuggets of info hidden within the pages.

People with all sorts of backgrounds are using analytics to uncover facts in gigantic piles of data to guide decision making. It's the secret sauce for a growing number of today's most successful businesses, from banking to professional sports to retail. For true believers, there are plenty of how-to books that delve into the mechanics of analytics and all its nuances. This book isn't one of them. What Jeff Ma's done may be more important. He shows why an organization should even pay attention to this stuff at all.

The real challenge is that so few companies are data driven. Many companies not only aren't doing anything beyond transaction processing with their data, they either don't know it's a gold mine or refuse to believe that it is. Jeff makes a compelling case for data-driven decisions and paints a realistic picture of what analytics can and can't do. While the payoff can be huge, he doesn't gloss over the commitment, discipline and effort required to get maximum benefit.

Perhaps his most incisive point is on p. 223: "Discipline means that you have to get over things like loss aversion and omission bias. You have to divorce yourself from any sort of confirmation bias and truly trust the data. You have to be comfortable with variance and need to have the proper bankroll to manage risk effectively. Beyond that you have to practice."

That was my takeaway from "The House Advantage," a business book by Jeffrey Ma that reads easier, like a series of tightly-written magazine features.

It seems maybe too convenient that one can learn real life, bottom line-impacting lessons plying leisure activities like casino gambling and sports. But Jeff proves it's true, extracting valuable principles from his own adventures and our own pastimes.

One favorite (timely) chapter takes on "pseudo statistics" like college football's Bowl Championship Series (BCS) rating and the NFL's Passer Rating. These numbers look like statistics, and we popularly treat them as such, but they're not actually statistical at all. These numbers are harmless when they're fodder for a barroom debate, but not so much if you're using them to manage your own company.

The book is actually quite technical. The statistical analysis and scrutinizing Ma espouses is anything but trivial. But it doesn't read that way, because the book's takeaways are all delivered by real life characters, conveyed through their own (often well-chronicled) success stories.

Jeff Ma isn't a professional writer. But he's a gifted storyteller, and he'd make a great teacher if he ever chose the career path. That's about everything you need to know in evaluating whether to read this book.