Mean Gene
Mean Gene
Pittsburgh's most decorated poker blogger, which I admit is like being the best shortstop in Greenland

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My Articles

Presto, the Arlo, & the Hammer
An Online Code of Conduct
The Ethics of Ratholing
"The Professor, the Banker..."
"Ace on the River"

My Columns

Lose the Shades
If You Can't Say Something Nice
Whither the Kicker
The Lady is a Champ?
Covering the WSOP (or not)
Statistics, Luck, and Poker
Poker and New Orleans
Managing a Bankroll
How To Tell A Bad Beat Story
Telling Lies
The Power of Poker Tracker
Advanced Card-Handling

My Greatest Hits

5 Things To Do Before I Die
Cafeteria Nostalgia
Mean Gene's Dubious Dating Tips
Poker and Business?
There's No Such Thing As Luck?
Isabelle, Je t'adore
No Shirt No Shoes No Service
Well, The Food Was Good
Good Morning, Mr. Matusow!
The Weekend of our Discontent, I
The Weekend of our Discontent, II
Books That Left Their Mark
Ode to a Fish Sandwich
Bill Simmons Ain't the Poker Guy
The Sports Guy Still Ain't the Poker Guy
Again, The Media Tackles Poker
Five Years After 9/11
Hitting Pretty Girls in the Face
Sixth-Graders Suck

Fellow Poker Bloggers

Guinness and Poker
Cards Speak
Tao of Poker
Up for Poker
Boy Genius
Chris Halverson
Poker Grub
The Fat Guy
Todd Commish
Poker Works
Bill Rini
Bad Blood
Love and Casino War
Double As
Lion Tales
Paul Phillips
Daniel Negreanu
Poker Nerd
Poker Nation
Poker in Arrears
Human Head
Sound of a Suckout
Chicks With Chips
TP's Table Talk
Royal Poker
This is Not A Poker Blog
Chick and a Chair
Go Be Rude
Poker Cheapskate
Poker & Other Stuff
Seven Two
Musical Poker
WPBT Online
Isabelle Mercier
Cardschat Blog
Amy Calistri
BJ Nemeth
Annie's Blog

Poker Sites

Cardschat Poker Forum
Barstool Sports
Card Player
Internet Texas Hold-Em
Poker Pages


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    Tuesday, February 10, 2004

    Is online poker the new day-trading?

    I was in B-school during the height of the revolution, when it seemed like everyone was becoming rich except me. And by rich I mean RICH, rich-beyond-avarice rich, Arabian-sheik rich. I read an article in Fortune about this guy who went to Penn State the same time I did who owned a gaggle of Internet companies with a market value of around $500 million. People were making millions--billions--on ideas that now seem positively ludicrous. Sell dog food on the 'web! Buy your dining room set on the 'Net! Is your company about to go in the toilet? Stick an "e" or an "i" at the front of the name and rev up that Internet buzz!

    At the time I worked for PNC Bank here in Pittsburgh, one of the 10 largest banks in the country. PNC formed a partnership with, a website that provided articles and links and whatnot specifically targeted at women. The idea was that vast armies of women would visit iVillage daily, see PNC's ads and links to purchase CD's and IRA's and banking products.

    That was the idea, and at the time not a bad one. The New Yorker ran a profile of the two women who started iVillage, both of whom become near-billionaires when their nascent company had it's IPO. PNC, a bank with around $80 billion in assets and around $1.2 billion in profits, had at that time a market capitalization of around $7 billion. iVillage, a company that had existed for about a year, that had never posted a profit, that had yearly gross income of around $30 million, had a market cap of $2 billion.

    Let's step back and look more closely at this, shall we? One the one hand we have a bank, a bank that's been around for about 75 years, a bank with actual cash in its vaults, a bank that made over a billion dollars PROFIT in one year. On the other we have a rinky-dink website that doesn't even look as good as Chris Halverson's blog and offers up the same content you'd find in Good Housekeeping or Cosmopolitan. Yet the market thought that somehow iVillage was worth about a third as much as PNC. That's when it hit me--this is friggin' nuts. The bubble is gonna burst. People are gonna lose their shirts. And I'm gonna have a great time laughing at all those Silicon Valley jagoffs who thought playing foosball and louging in their Aeron chairs eating Thai food somehow made them more productive.

    Of course we have seen the destruction of the Internet economy, most of the annoying twentysomethings who told us that the old rules of business were forever obsolete are now frying our hamburgers and selling us cell phones. The Golden Rule of Capitalism--So, can you make a buck at this?--was bent but not broken. Investors realized that, uh, ain't no way someone is gonna pay the shipping on a 50-pound bag of dog chow, no matter how cute that sock puppet is. If some Internet companies truly broke new ground and provided fantastic new services (Amazon, Yahoo, Ebay), the vast majority did not and had the shit slapped out of them by Adam Smith's Invisible Hand.

    Perhaps the most laughable and pathetic of all dot-com moneygrubbers were the day-traders, the troglodytes who toiled in rooms lit only by the multiple computer screens they stared at all day, every day, searching for the trading pattern or stock dump they could work to their advantage. This was "casino capitalism", people who thought they knew how to beat the house, or the market, at its own game.

    With the market skyrocketing it was easy for a trader to make money this way, but once the market stabilized, and then started falling, daytrading was exposed as the charade it was. I can imagine these folks sitting at their screens, bright lights flashing and bells ringing, trying to figure out what the other traders are doing, getting killed time and time again when your rock-solid stocks tank out of the blue...

    Does this start to sound familiar? I'm writing this while sitting in the dark and playing Pot-Limit Hold-Em, and I'm watching a repeat episode of the World Poker Tour, and I'm wondering if I'm rising up on the latest Internet bubble. To answer my own question, I don't think online poker players are the next coming of the daytrader, but there are parallels that interest me. The Internet, boon to commerce and education that it may be, is also an excellent tool for satisfying our most base instincts.

    The boom brought back the "Greed is Good" ethic from the eighties, and we're still living with the aftershocks long after most Internet companies have gone belly up. The accounting scandals that have so damaged investor confidence were caused, in part, by companies desperate to put up numbers that would excite a Wall Street spoiled rotten by valuations. Even though most of those companies never made a profit or attracted many customers, there is one type of Internet site that's done both--porn sites. As an (unidentified) friend of mine recently said, "Anyone who pays for porn has gotta be outta his friggin' mind". No matter how esoteric your tastes may be, you can probably find four thousand websites devoted to your, ah, prediliction.

    And now gambling is getting big. Well, it's always been big, but it's getting friggin' superhuge. Why go to Louie Lump-Lump at the corner bar to put your bet down when you can just log on to an offshore casino? The 'Net gives you instant access, secure transactions, and at least the appearance of anonymity. Unless you violate the Patriot Act or anything subversive like that.

    The WPT and WSOP have made poker the latest craze, and online poker rooms are far better able to take advantage of this than brick-and-mortar casinos that aren't legal in about 75% of the country. Any fish can sign up with Neteller and stick a hundred bucks in an account and make like Gus Hansen. While the sharks slowly circle and start the feeding frenzy.

    What made me think about writing this overlong and preachy post was my recent success playing online. I loaded up PokerTracker and found that, over my last 300 hands, I was making more per hour playing $25 Pot-Limit than I do at my real job. That extremely small sample didn't convince me that I have what it takes to play full-time, and I have far too clear an idea of my own faults and failings to think I could play professionally. I do wonder how many people out there DO think they could pull it off, sit at their desk all day and play online and make a living at it. I don't mean the "real" pros or semi-pros intent on grinding out a living, but the fish who fancies himself a shark and decides the money is just too good to miss out on the action. Just like the daytraders who thought they could outsmart the market and make their fortune.

    I think this might end up becoming part of the novel I want to write, just the idea of some guy in Pittsburgh deciding to become a professional poker player without venturing further west than Coraopolis (get out a map if you're wondering, people) and never setting foot in a casino. I think that's why I wrote this, I'm thinking aloud and pontificating and making you sit through it. Sorry 'bout that. get this widget Please visit Pokernews site for more poker news, poker strategy articles or poker rules.

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