hello everyone and welcome back to conversations with Tyler today I'm in New York City chatting with the great Nate silver it is late July 2024 and Nate has recently risen in status you might say he has a new book out which I thought was excellent informative fun on
every page on the edge the art of risking everything Nate welcome thank you Tyler now if we simulated the world a thousand times in how many of those scenarios would you end up more or less where you are today this is of course a question I
asked Peter teal and other people in the book your father was a political scientist presumably very smart got you connected to politics well I mean this is a hard I mean it's I feel unfair that you're asking me this question that I this
unfair question I asked other people but no I think like I think I would wind up somewhere in this vicinity like 20% of the time or maybe less than that I don't know I mean because the fact that you had this big breakthrough or I did in the kind of 2008 election
which really was did involve like a lot of happen stance in certain ways I had been like an online poker player um and basically the US government shut down online poker I mean technically they shut down payment processing for online
poker um but that got me very interested in the 2006 midterms because I wanted the people who had passed that law to lose their seats in Congress um meanwhile I lost my source of livelihood I couldn't play poker and press buttons for for 24 hours or not 24 hours for 40
hours a week right um so founded 538 um just kind of on a lark and that kind of changed everything so yeah there's a lot of circumstance and luck and there are probably you know many ways that life could have unfolded in a way where I was
unhappy at some consulting job or something tragic happened or or whatever else poer players they're orary they're individualistic you don't always want to hire them and you're one of them so is it if not inevitable likely you would have ended up as some kind of
independent yeah I mean that's the thing is like CU now CU now I'm doing like three or four different things right which in some ways makes it feel like I mean I sometimes feel like I'm living out multiple versions of the
simulation anyway right yeah yeah because I'm Diversified in different ways um yeah and there might be worlds where I had won like a big poker tournament early on or something like that but like yeah I'm someone who's I get pretty unhappy when I'm bored uh
and I also can focus and work pretty hard so I think I would have you know wound up in interesting places a lot um but I feel very blessed and lucky to have one up in this particular place I think what do you maximize I don't know I mean in in the
short run some combination of like um uh like look this year it's kind of easier to answer that because you can have like a shorter or more medium term right everything's thrown at you you've got to get through the day simply yeah look I'm I'm 46 so there's
some extent to which I feel like this year is important as far as like um earning a fair amount of of income I think because it is very cyclical with election cycles and other things like that um of kind of having good options for the second half of my life basically
um you know I found a lot of energy recently this year um I think I probably worked fewer hours than I want did but probably work much more efficiently have a little bit more balance um but yeah it's kind of like I am trying to like
get as much productive work done as I can um over the next you know four or five months until until the election happens um I'm trying to build the newsletter silver bulletin in the long term um but but you know I've matured a little bit I mean I do I you know I tend
not to work most evenings for example I take my share of we were talking about travel before right um I do my share of travel I have poker tournaments which are are fun and kind of stressful but also like a lot of hard work and kind of
our an escape in different ways um so yeah like I want to I want to get to a point where for the rest of my life I can do intellectually challenging and stimulating work I think um and experience different things and but this year there's like a little bit of hustle
I think required to help kind of ensure that in the long term there's a Steve levit paper you cite in your book that indicates people make better decisions when they flip a coin to avoid status quo bias a do you believe that paper and
B looking forward will you be flipping any coins no I literally will like flip coins for um for like do we want to go get Italian food or sushi but a big decision bigger decision even just where should I go on my next vacation you could randomize that do you do it that
like a vacation location might be up to the max of what I would randomize I think right but not something really important I tend to be pretty analytical about like really important like career and life choice decisions I think right so
you don't think you have that much status qu bias I'm sure I do but like look I mean i' I've done a lot of different things and I've bounced around quite a bit and I'm kind of inherently inherently Restless I mean one thing I think is like you know some of the common
personality flaws that flaws is a shaded loaded word right um some of the common personality traits a lot of people have I think maybe poker players over index a little bit toward toward the other way you know poker players are are pretty
good at going with the flow when you're playing a poker tournament everything is contingent right because a tournament could last five more days or five more minutes and so you're like yeah I'll go to dinner with you conditional on being
knocked out of the tournament and not entering this other tournament and the X and Y and Z and so you're kind of you're very used to um to dealing with different stressors and contingencies and things like that and I think that's I think that's somewhat unusual so if
you're very restless does that seem to you like a bias in your decisions you want to counteract with nudges or something you should double down on I would say you should Double Down On It closer closer to Double Down double down yeah so what's your main bias when you
make decisions um I think I'm probably more emotional than people might think on on the surface it come I think you're pretty emotional yeah that can come out like on Twitter and and things like that a little bit um I mean I'm trying to
think um you know look people who are very competitive and I and I put myself in that category right I think can sometimes be like a little bit irrational about like continuing to fight even if they even if they've already won in some ways I think that
can be a bias potentially in in certain ways who is the first human to think probabilistically with a reasonable degree of consistency I mean or have we seen one yet no look I think people are actually more intuitive probably istic reasoners
than than maybe the kind of conventional wisdom holds right I mean if you're thinking about like some hunter gatherer right they're reading like context clues about where there might be like the particular wild beast they want to kill
and want to avoid being killed by um you know gambling goes back very early in many cultures it's apparently not quite Universal but probably very common in most that's a sign I don't think probabilistically because most gambling is negative sum right at best Zero Sum
so we should see very little of it I mean it's originally Divine from um from kind of divination literally right and then kind of becomes gamified and kind of commodified um you know the notion of like um uh but has plays almost like a
spiritual role I think in na I know this anthropology super well I would have read a couple books on it but like it almost is like a spiritual divination role right the notion of like um gambling halls or casinos I think kind of dates back to you know maybe 16th or
17th century Europe roughly like that's that's potentially newer um but the notion of like tempting one's fate I think um which is still a romantic notion I think some gamblers have right like Irving gothman who I cite in the book is like um this is someone who has
like on we or whatever May I'm using that term wrong but like they're they need to prove um that they're capable of taking a chance be a little bit gendered I think he thinks of it more as like a a you know post World War II American male
who feels like he has fewer chances to like demonstrate his bravery and that's that's always been kind of one conception of of gambling as a simulation of of actual risk why shouldn't people gamble only in the positive some games so take the US Stock
Market that certainly seems to be one of them and manufacture all the suspense you want learn about the companies the CEO get your thrill that way and don't don't do any other gambling why isn't that just better for everyone yeah look I'm not necessarily a fan of like
gambling for gambling sake right you know I don't you know twice a year I'll be I'm in casinos and in Las Vegas a lot right twice a year I'll have like a friend who's who's like just let's just go play Blackjack for an hour and have a
couple of like free drinks and things like that right but like I I I like to make bets where I think at least in principle I have an edge or at least can can fool myself into thinking I have an edge sometimes with the sports stuff it's like you probably know deep down
you're kind of roughly Break Even or something like that you're doing some smart things like looking at five different sites and finding the line that's best which wipes out some but not all the house Edge but no I I'm you know I'm not a huge fan of like of like slot
machine certainly I think are kind of very gnarly and addictive in in various ways they limit your sports betting don't they yeah I've been limited by by six or seven of like the nine New York retail and what's the potential Edge
they think you might have it's just that if they think if you have the pattern of some so if you're betting $2,000 on like the Wizards Hornets game the moment the line comes out on DraftKings right you're clearly not a recreational better so just the
Hallmarks of trying to be a winning player meaning betting lines early because the line's early and you don't have price Discovery yet right the early lines are often very beatable um betting on obscure stuff like you know will this player get X number of rebounds or
things like that um but like it it's you know if you have a knack for if DraftKings has a line at minus 3 and a half and it's minus four elsewhere then then it can be called steam chasing where you bet um before a line moves in other places if you have injury
information I mean it's like it's a very weird game I think people I think one thing I hope people are more aware of is that they are a lot of the sites and some are some are better than others right but they they really don't want
winning players and their advertising is actually has changed it used to be they would say for like daily fantasy sports which was the predecessor hey you're a smart guy I mean it was the the ads are very cynical right you're a smart guy in
a cubicle why don't you go uh do all your spreadsheet stuff and actually draft this team and make a lot of money and like literally you'll be cons sleeping with supermodels in in two months you win the million-dollar prize from DraftKings and now they don't even
try to advertise it as a skill game anymore which in some ways which in some ways is a mistake because the appeal to like the male ego is like a huge is a huge way to to get new customers for sports betting and things like that um
every every sports fan thinks he knows has some proprietary Edge or knowledge or or or Insight um so but no they they they really don't want I mean I think you know I I guess like plus EV Sports betters are like not a big lobbying group or not a big cause exactly um but
you know I think there should be regulations on like uh how much can you kind of price discriminate between your customers right because literally they'll take like a million doll bet from somebody and like wouldn't take even a $50 bet from me on the same game
and things like that um which also creates problems because you know money has a way to flow uh you know if if Tyler if you are able to bet a million dollars right and I'm able to bet $50 and I'm a winning better then there's
certain ways in which information will probably flow from from me to you in an inefficient way but um but but no the industry is is is very cynical in some ways and and you know the kind of old school Vegas idea of we're going to post our line and
everybody gets a crack right um you can bet x amount at a time when you make a bet then we may change the line you can bet again like that attitude has been lost kind of more of this European UK style where you're doing lots and lots of customer
segmentation and and trying to maximize your um the amount of money you make from whales which are which are bad degenerate gamblers and and not take much action at all from from Sharps of course you lose like the price Discovery element of that it's a pretty
interesting industry economically so like what happens is there are a few sharp sites that will say hey we will take 5,000 bucks from anybody and that helps us have better pricing and discover better lines right because by the time you get to um you know kickoff
or tip off of a game then you're taking $50,000 bets or more so so to have someone who's willing to give someone a small plus EV bet for a smaller amount because then you'll get your retail customers later on that was like the old
the old model um shouldn't they just stop the betting on say how many rebounds a player pulls down because it encourages corruption it's not actually a suspenseful act whether it's seven or eight rebounds whereas who wins the Super Bowl presumably is a suspenseful
meaningful act for many people that's right no it's it's um or you know if you have like a Jaylen Brunson I'm a Knicks fan right or someone who's like a major star then it might make sense but but no uh these books have way too wide a menu
of events and the and the sharper books don't the sharper books will kind of pull a line down if if um if Seth Curry is questionable for the game right you can get a gigantic Edge if you have any inside information about like whether he's going to play or not so they will
just like not take that bet or they won't do the more esoteric player prop stuff or things like the NFL draft which is very if you you know if you are an NFL reporter for ESPN then you could probably absolutely Crush NFL draft bets
you might get fired if someone finds out but like but so um but the retail books are like yeah we can put bets up that a knowledgeable person could make money on um because we won't let the knowledgeable People BET in the first place and that's that's the kind of I
think relatively you know I guess it's a sustainable equilibrium in the long run I'm not quite so sure one thing that sites like DraftKings are relying upon is they're basically piggybacking off off the sharp sites um because you can
kind of just set your line based on on like Pinnacle for example or Circa these are books that are are sharp and they actually do take bets from winning customers so DraftKings kind of piggybacks off them if we could enforce a just an outright ban what's the cost
benefit analysis on banning all sports gambling I mean I'm more of a libert Arian than a strict utilitarian I think um sure but what's the utilitarian price of being a Libertarian look I think most the studies on gambling says that it's kind of a a good transaction
in terms of like you know people get some degree of enjoyment and excitement out of it but maybe you have like you know 5% of the population that becomes very addicted um and that 5% can account for a large share of of volume right
like look if it were me if I were kind of the gambling Zar um I would probably ban slot machines and and let everything else go more or less I think um I think from like if you know the utilitarian part of me for slot machines um is maybe enough
to outweigh the libertarian part I mean they're deliberately designed to to be addictive um it's not very transparent um um kind of what the odds actually are you can't actually go and and doesn't say you have a 9 negative 9% Roi at this
particular slot machine um if you look at the demographics of slot machines it's much lower income I mean you know sports betting and poker which are the two kind of forms I participate in myself are like are mostly done by fairly High income people who can I
think afford to lose but but yeah slot machines are are nasty things speaking of skill if we put you in a time machine send you back to 1970 and you're playing poker why exactly is it that you would win so much um so one way to put it is that so
poker actually has been solved more or less with Game Theory um with a big complicated programs called solvers that calculate the Nash equilibrium for for any situation given certain inputs but when you're at the table that's of limited use to you right no I mean
because like uh yeah I mean the strategy so if you think about like the history of like Texas Holdem or poker like probably 99% of Poker that's ever been played every hand that's been played counting online and things like that has
been played in like the last 10 years right poker's not that old the game it kind of goes back to the kind of Mississippi river boats for many years people weren't really trying to use computers or anything to solve it when Doyle Brunson played right just like
actually he would literally by hand simulate Hands by like dealing out a deck hundreds of times to see does do a pair of d t Do's does a pair of twos beat ace King off suit more often than not right um why isn't there Evolution across temperament so say people back
then they don't know to be aggressive enough because they didn't study Game Theory but the ones who are aggressive enough naturally they're just going to win more money it will become somewhat obvious over time that's the way to play
and you might be slightly better than the others in 1970 but not have a huge Advantage like it's the abstract knowledge that powerful compared to Market Evolution well so what are see if I went back today everything you know time machine you sit down you're going
to do really well right I would I would I think dominate the the games yeah for sure and it's because you know Game Theory and they don't like Thomas shelling was what 1960 F Norman Morgan Stern you know just after World War II
like game theory is not that new what exactly is it you know to be like a tight aggressive player with your strategy agressive saw that in a lot of old movies Ted aggressive is part of it right but like it's very hard to maybe intuitively know um what the right
bluffing frequency is in in a certain spot right um you know for many years people would also give away lots and lots and lots of tells um if you go back and like watch like footage of like the 1987 World Series of Poker there are
incredibly obvious tells and I think it just kind of it's kind of just like there's pressure on the market to like compress it into a diamond or what am I even talking about but but like I think we are just kind of very early really in the life cycle of the competitive
pressures on the game in in poker um and in some ways it's like kind of a metaphor for like other kind of capitalistic Ventures but I think I think I think you all people may be under underestimating the efficiency gains that are to be had when there are
kind of proper incentives and proper technology basically the kind of combination and just like the sheer volume of the number of kind of nodes on the game tree that have been explored so let's say you're a poker champion you want to quit you can prove you are a
champion you're still young who is it who wants to hire you in the actual world oh for sure I mean you know where would you go like a trading firm or oh I mean hedge funds I mean you know some of them like Susana or Jane Street in
particular are known for um for hiring ex poker players um and what's the main flaw those individuals have as Traders whatever their virtues may be like chess players have flaws as Traders math Olympiad types have flaw is Traders what's the flaws of the poker players I
mean I've only been on the poker I have done a little bit of Consulting for financial firms um you know my experience doing that is is that it's actually very similar right um because if you're like working for a trading desk um and you're being asked what's
your opinion of how event X will affect opportunity y to trade in the market um it's very much a game of estimation and and it's very much a game of incomplete information and it's making decisions quickly which is which is very I think
poker like um and there can be value in like kind of running a formal model and being more more complete about something that's kind of what I do for like the election modeling type stuff but like but the trading opportunities pass pass
very quickly and the premium on on speed relative to you know I mean journalism actually there's a little bit of Premium on speed too right but you know to negatively stereotype AC Adia would be the contrast to that right where there it's like you can have the perfect
answer but like it takes you a year to publish a paper whereas whereas can you have a good answer in in five minutes right if you're if you're trading some commodity and and and Joe Biden has kind of a face plant at this debate um you
know you have to make a decision within a couple of minutes about that um likewise in sports betting you see some lying that clearly doesn't make sense you have to infer is this like a golden opportunity or did like Patrick Mahomes just get injured or something like that
right you have to make inferences very very quickly and so I think I think I think the poker players probably do pretty pretty well in that environment now you've run 538 now your newsletter has evolved into being like a true business do you seek to hire top poker
players or you avoid them like the plague like one is enough you I'm enough you know we don't need any more of that skill get lost fellow I would for sure I mean po so poker players are sometimes a little bit lacking in organization and
probably I'm a little bit lacking in in organization right and poker players are people who are kind of um sometimes they're a little bit irreverent which is a quality I like but like but you know I think I knew people who are like you
know the um the elections analyst I hired now I mean he is somebody who um you know he's never failed to like he's great Eli never failed to like return like a text message within like 15es minutes or something like that right I don't know when he sleeps and I need
somebody like that cuz I'm running all over the place and and I can be like a little run hot and cold and be like a little bit Moody so I think you want someone who's a little bit more more steady um for the newsletter I think also you know the writing skills are
very important I mean I don't know if this is becoming more important or less important in the kind of world of chat GPT and so forth but like um just the ability to like I mean working on the book and then the newsletter just to
you're you know to write every day I mean I feel like you can get like 2x or 3x like faster at writing like literally if you just kind of get a lot of reps in and things like that um but but for sure there are like you know I was very blessed by was the first time I've ever
kind of hired someone for this job as opposed to like at 538 um and I was very excited by kind of how many smart mostly young people there there were out there and so hopefully I'll find other ways to hire to hire more of them in the future
but like but yeah um but people who are a little bit more directed I think and and and organized and running 538 and now your current Ventures what have you learned about social science economics game theory that you didn't know to begin
with I mean I think I've I feel like I've learned more in the past three years since kind of I mean formerly I've been away from 538 for like a year and change now right informally there was kind of a a lame duck period where I was you know I was allowed under my contract
with Disney to write a book um so it's kind of probably Fus that's this book on the edge and it took three years and just like if you take three years and just like talk to like 200 really smart people that's that's that's an amazing
thing to do I mean it's kind of what you do but like but like I wish I kind of spent more of that time in my whole life but um but no look I mean uh at 538 I mean the constant frustration was that we were kind of brought in during a period of during a peacetime
period for for ESPN before we went to ABC News where they felt like they had the world's best business and could just kind of print money and we could be like a a loss leader for them um and so you never actually had any incentives in
place to to run an actual business it was no no one was going to lose their job because 538 lost x amount of money every year when you have a company that's making hundreds of Millions of dollar a year until you face you know headwinds in like cable TV and theme
parks and all these things all of a sudden are like become very challenging businesses in in a lot of ways the movie industry during covid and things like that um so yeah I mean it's a shame because um based on the early growth of the newsletter I mean I think I think
538 could have been a very very good subscriber business and we kind of tried to push that internally but like in a big company the logic doesn't make sense they're like well we have um Hulu Plus launching and therefore we can't have
another subscriber business that would distract from Hulu Plus right it just it's just very strange I'm not sure how much of that as a result of being at Disney in particular because they're all about gigantic scale right it is theme
parks it is NBA and NFL contracts for hundreds of millions of dollars over a period of time it's being in every kind of household in America every movie theater um so I don't think they saw the value of like a a small to medium siiz business that could still be a good
business and a prestigious business and profitable on its own merits um and that was frustrating I mean just to go for like you know given that I am tend to be pretty incentive driven like to have spent like 10 years at a company where you basically had like no incentive to
work hard and sometimes some probably for the first eight years of that I worked my ass off anyway but it's just it's just so nice to like actually kind of own your own own your own work product and like you know with subscriber newsletters in particular the
incentives are pretty are pretty linear right if you post more you tend to get more more signups in the long run make more revenue and so and so that's that's a very nice change of pace and very motivating I think do you think that
Sports analytics has made Sports too homogenized and more boring so right now for instance the New York Knicks they're in a way trying to copy the Celtics well everyone should be a good shooter and everyone should be a good defender in the 1980s or 90s teams were more
different should I be happy about this I think it's a I think it's the better version of the critique right because some sports like I think the average NBA Style um is fairly attractive now right like I too many three-point shots I
would say maybe a little bit but like I mean if you go watch like if you go watch footage of like a game from like the 990s or something right I mean this is this is more aesthetically appealing it shows off some of the athleticism I think but no the fact that you have
less variety this is true in poker too by the way right um there are fewer different varieties of like loose aggressive versus tight aggressive poker players um you can't get away as much with having like a a flawed eccentric strategy and
then making up for it in in other ways um which is kind of kind of a shame maybe in the long run it means we're not exploring different branches of the tree as well and and that can be problematic um but yeah I mean it's it's you know it's a bad time when things get hyper
efficient then then maybe the quirky players I mean even I saw a video yesterday about like major league baseball batting stances and there used to be guys that had like very very funky batting stances and things like that right and those have those have largely
disappeared right if it kind of cost you 200s of a point of batting average so you hit 289 instead of 291 then like there's enough money on the line and enough kind of resources and training and enough kind of sports science where
where that'll probably get beat out of you potentially well Joel MB ever win a title I know Daryl mury pretty well and he I think I'm he's probably a fan of yours and so uh I'd say yes I think I mean and you think Paul George was a good idea I
think it was a bad idea he's 34 he's had a history of being flaky he's a very talented player but he doesn't seem like the kind of guy to put you over the edge and they need more of a glue guy I mean so so Daryl Mur is very good at finding
like The League average players that can like that can provide the glue guy no I think I think it's a good move I mean I think like um you know look Daryl understands the importance of of swinging for the fences if healthy that's a very big big three and then
he'll find ways to you know acquire the minimum salary guys or whatever loopholes there are on the salary C cap to get the $10 million a year guys um and and you know if healthy that's a team that can challenge the Celtics I think I mean if healthy I mean what's
the conditional probability in all three of their big three being healthy probably below 50% frankly um but you know but you don't want like the average outcome and also the incentives in the NBA and if if you try to like model out
what the true discount rate is for sports general managers um I mean they have some absurdly high discount rate like 30% or something like that or 50% because they their jobs last for like five years on average right um and so and so you know I think it's a I think
it's a a fairly smart play to swing for swing for the fenes Luca overrated or underrated well I lost a fair bit of money trying to bet against some Mavericks in the playoffs so I I can't call him underrated um or can't call him
overrated I guess um I think Luca is properly rated properly rated and who's the most underrated player in the NBA I 2024 for our listeners I mean I think Jaylen Brunson in some ways and now that's the ni fan coming out although he was I think fifth or sixth
in the MVP voting potentially this year yeah he was pretty high yeah I mean as a ncks fan that's kind of one that comes to mind a little bit I mean I think some of the Celtics like you know Derek white I think is a very underrated player um
you know because I'm not I mean I like Jason Tatum and Jaylen brown right but I think I think you know they are maybe respectively like the you know seventh or eighth and like the 23rd best player in the league and they were like a great historic team and I think that you know
the holidays and the and the and the Derek whites and players like that are are are you know maybe like top 30 NBA players like really really good I think I'd say jokic who to me is the greatest offensive player ever not necessarily
recognized as such certainly has a very high reputation but maybe not a size that no people are always I mean even this year right you saw people were willing to kind of turn on him a little bit I I don't think people I mean I think he you know I think the consensus
now of smart NBA nerds that he's the best player in the league I think people might not realize that this is one of the highest peaks of any player in NBA exactly yeah I don't think that's widely recognized how will AI improve Sports
analytics I mean I think it will improve things in areas like computer vision things and classifying plays and things like that I think will help a fair bit um I mean Sports is weird because it's kind of in this medium data environment um where it's not quite a big data
problem although you could have more data if you put money into it right yeah no I think it'll help more in the sports where they're kind of like less linear I think things like you know classifying strategies in like soccer and football
where you have like a lot of things happening at once and you can't kind of have your nice little regression model I think I think you know as compared to say baseball where where baseball is kind of very easy to represent with kind of classical statistics um so you know I
mean I think it'll probably there'll also be ways where it enhances like the sports viewing experience in different ways I think it'll help like sports video games a lot um yeah so our hockey and Combat Sports going to use more analytics in the
future I mean one of my friends uh named Sunny meta um is an analyst for the Florida Panthers an assistant GM and and he's an analytics guy former poker player former jazz music and just won the Stanley Cup in Florida so um so it's
transitioning in in all the sports I think I mean hockey probably of the big four in the US um is considered the most old school um but yeah look I mean the Market's fairly fairly efficient and I think people have you know we're kind of
long past the old boys network in most of the sports probably in hockey if you talked to Sunny he'd say maybe maybe two-thirds of the teams are fairly smart and oneir them are still kind of are still kind of dumb um you know I think but I think I think we've I think we
probably passed the lwh hanging fruit from Money Ball gains stage right here's a question I was asked during a Jane Street talk once what is the most underrated basketball statistic for judging a player um well it's contextual because you know I think like we've gotten to
the point now where like offensive rebounding has gotten underrated actually um if you try to tease out the effect of rebounding and statistical models then there are various kind of things where different variables are correlated where
basically I think if you look carefully then offensive rebounding is actually quite quite valuable I mean you regain a whole possession that's worth like that's worth a lot um whereas defensive rebounding is kind of um you know rarely is an individual player doing something
right to get a defensive rebound whereas an offensive rebound requires like a lot more skill and provides a lot more value cuz the expectation is 75 % chance that like you lose the ball so um so if you get an offensive rebound it's like
adding like you know 710 or 810 of a point basically you get a whole possession back my answer was team wins at least if you've been on more than one team like does a good team want you that's picking up your intangibles yeah look I think uniquely in basketball
because it's five players um in a lineup at any given time um and a good player can control you know half the offense or or more literally Luca type player or Steph Curry type player um yeah I think that's a that's a more adequate test in
in basketball than other sports um or maybe for an NFL quarterback right um I grew up kind of in baseball was my favorite sport for a long time and there it's more individual and there I was always kind of fighting against the team wins argument like I think it's like not
um not a major indictment of Mike Trout that the Angels haven't been good very good it's not just you causing possible wins even before you've played for the team the fact that they want you says something good about you so like kcp has
been wanted by good teams his stats are good but not awesome but that is a good sign about his quality I think so although we we start to get into circularities when people become kind of aware of that kind of thing I mean I feel like this way a little bit with
like prediction markets too and I you know I consult now for poly market so I'm kind of officially a champion of prediction markets um but kind of when people believe oh the Traders must be doing something really smart therefore
it's trustworthy it kind of can become circular logic I think sometimes where um where you can make yourself vulnerable to thinking you have blind spots and kind of having like a bystander problem basically um but but yeah I mean you have to someone actually
has to have Alpha they're providing value ad they're providing and then other people can kind of can kind of uh uh drift off that or what's draft off that I'm thinking about the cycling term um but now and then someone thinks that everyone else has
vouched for somebody it's kind of like the story of Sam mman freed in the book a little bit that everyone assumed that because he has such prestigious um coattails that he's hanging out with Anna Wintour and hanging out with um you know Bill
Clinton and Tony Blair and like uh he has his name up on a basketball arena in Miami and he's getting his Praises sung by everybody and Sequoia capital and things like that um that like you know at the heart of it I mean it was kind of a big fraud I mean that that's a term
I'm choosing intentionally and what's your model of his risk-taking behavior I mean I think he I mean like interviews with you I mean I think I think he is quite insane I think as a term I you know irresponsible and insane but like you know I think he was very
literal about like he'd literally be willing to like take the St Petersburg Paradox B where like if he could improve his version of utility by 2.01 x um like he would like literally say hey I'm a strict utilitarian I'm willing to take
that gamble I think I think he was like you know in my interviews with me he was almost proud of the high risk of ruin that he was taking um and he would say things like if you're not willing to like actually literally ruin yourself
where you're literally a laughing stock then you're doing something wrong is asking whether he might have been a sociopath a substitute for a risk analysis of his behavior or is it a way of getting at the proper risk analysis of his behavior no I think that I think
that term is is properly used because he's also engaged in with other people and running a a giant company that people have deposited millions of dollars with and invested hundreds of millions of dollars in and I think I think I think that's a proper frame
right I mean the kind of combination the book's all about people who have this I was going to say risk-taking Gene I realize it's like a little bit imprecise I think probably is genetic in part um but you know but how's that pair with
other different qualities um you know the most common pairing in the book is being really risk-taking with really analytical which is a very powerful I think pairing uh and you use this phras as what those people are in the river on the river what is so I call the
community the river so it's got the river is the the virtual community of like like-minded people but that includes everything from um from poker to Silicon Valley if you go kind of further Upstream as I call it even things like effective altruism and
rationalism like one thing that I found in the book is I kind of had this outline of like here all these areas that are interesting to me and kind of literally started out I mean the First Act I took for the book was I flew to Florida my first trip on a plane after
the pandemic um and went to a giant Casino in Hollywood Florida and played a poker tournament and just kind of like and branched out from there but like but the commonality you have between how the how all the different analytical nerds
think right how the effective altruists and the Hedge funders and the poker players and the VCS I mean it's like not exactly exactly very different groups though don't some subsets of those groups Get Fooled to an especially High
degree so maybe not the hedge fund people right they face very strict discipline but the effective altruists the rationalists there's something to me a bit clueless about them maybe systemically yeah I think the EA and look the book has a very long discussion
of EA and and in the spirit of EA I'm sure it'll get reviewed on these different forums and I hope it's and I mostly like EA to be clear most like them there's still some epistemic defect in the people the are I think they're a little bit I think they're a little bit
too trusting is one thing um you know I think there is a lot to be said for having um skin in the game is a term that I didn't invent but like you know um you know I think poker players one of their uh best qualities is they have
really good BS detectors right and they've seen like lot of smart SPF like nerds who go on a winning streak win a couple of tournaments and like and but are bullshitters and like aren't all their cracked up to be and I think I think EA maybe kind of lack that that BS
detecting ability um you ever see that old YouTube video when Ali G presents to Donald Trump pre-presidential trump and Trump just dismisses him immediately and walks away right so Trump has the BS detection ability and how does that fit
with your model of the river people isn't he in other ways almost the opposite of the analytical for people I mean so I I will say if you take the EAS and put it in a separate Camp I mean they are unusual because they have this analytical skill set um but they are are
less competitive I think um but then kind of the movement gets usurped by this guy Sam McMan freed who's extremely competitive um and I think runs circles around them in some ways even though he's kind of lying about things in other
ways um but yeah look I mean um maybe competitiveness is is good and like you know I mean the book is also against um kind of the Peter Singer form of kind of selfless utilitarianism where um where you know I worry that people aren't that aren't I mean some this
comes from like your critiques I think of but like people that aren't like a little bit partial then I worry that everything just kind of falls apart yeah on some level right there's no incentive compatibility without some compatibility
and and and you know it's interesting I think Peter Singer too talks a little bit about how like he almost thinks people that are like um somewhere on the Spectrum are actually better moral reason or she thinks in some ways right
there's evidence for this in some papers in fact yeah um they have less status quo bias they're more impartial in some ways yeah I I think there might be something to that but like but like and there are lots of people in the book that probably would be class ified as
being on the Spectrum where we classify themselves that way um but but you know you know poker uniquely I think involves some combination of analytical skills and and Street smarts if you totally lack the street smarts then I think it's
still pretty hard to get ahead in a kind of competitive world you're too likely to be taken advantage of now your father was an academic did you get your street smarts from him or from somewhere else um probably not I mean my dad's you know a sharp guy and he would do things
that were difficult problems like he tried to basically he was a sovietologists were right how many birst deaths so he like abortions yeah so it's yeah things have become more like criminology all the time in US politics yeah so that involves like making
differences from from incomplete data right at one point he was um you know offered to part of a team to kind of figure out how many deaths there had actually been in the Holocaust I think thankfully turn that down because that would be a thankless task for sure um
but yeah but but he was starting out by working with data that was imperfect inadequate sometimes fabricated and trying to find the real inferences from there um but no look a lot of it comes from from from being very competitive right um being on debate team and things
like that in high school um you know playing poker for for many years now um you know having a fair amount of of life experience I mean we T kind of talked before about how like I'm a little bit rambunctious and easily dissatisfied and
i' you know I at this point I think I've traveled not like you but been to a lot of different places and things like that and talk to a lot of people what's the stupidest risk you're willing to take it could be oh I'd go in a submersible with
a billionaire or you know I take a helicopter ride every week or what's your stupidest risk I maybe not thinking enough about I've tried to become more healthy over time this is a boring answer right but like you know I think I still probably have like too much of a
short-term bias in terms of like kind of you know not doing enough things to um help extend my lifespan and things like that right I mean I don't know I mean I've I've you know one time when I was like uh like 10 or 11 years old the one
at sleepa away camp right uh one of the instructors like dared me to like go walk around this pond with only a flashlight at at midnight or something like that for some reason I did it I I don't know why I think they got fired it was like a big Scandal or something um
but it doesn't sound risky if you're walking around the pond you're not walking on the winter ice right no to be fair right but like you're you're 11 years old and you're by yourself and you have only a flashlight it's probably not
the smartest thing in the world um but yeah I think my stupidest risks might just be road trips in places where the drivers are bad oh for sure yeah yeah yeah um I should do less of that yeah you know you go to um I went to Costa Rica a couple of years ago right and
you're like it's very rainy there obviously at least the part of Costa Rica that I was in um yeah you're probably doing things like um you know going swimming on these I mean the waves in Costa Rica are really something right
but it's probably probably like objectively pretty dangerous to be you know in the Pacific Ocean without a lifeguard nearby it's probably fairly dangerous right yeah or um or going up some Gravel Road in the middle of a rainstorm um but I think people need
some you wouldn't want to take that risk constantly right but you have to I think you have to like live a little bit you know but what's the way you would describe or think about what it adds to your life because I do know people who don't do any of that maybe they're
missing something but what is it what is it exactly I mean I think there is I mean I think probably is it is genetic in part there is some like quote unquote thrill seeking Gene you know I like I like spicy food for example right um you know
I like travel I like experien that are more visceral I mean I think there I think there has to be some innate component and people I've talked to that like I've talked in the book it's like mostly quants and things like that it's like you know hedge fun people and poker
players there is one section of people who are physical Risk Takers people who are like literally like explorers I talked to an astronaut for example um and they'll say yeah if you talk to the people who are who are mountain climbing
right scaling the Seven Summits where you're up 28,000 ft and you actually have some risk of dying like they their Community thinks there's something something genetic about it um they think it's like related to a certain type of
stoicism almost but what's the richness they get added to their lives that maybe I would not so I'm somewhat risky with travel but I'm not at all risky with physical activities I think the notion of of cheating death has to be kind of has to be kind of thrilling right
um I I mean you know I think some of them are maybe a little bit depressed in some ways and it's kind of like a not quite self-destructive or suicidal but adjacent to that right like maybe you figure well you know I'm a little depressed and so I I can kind of like um
I can have a lot of fun and cheat death or if I die then maybe it's not that bad I mean I know it's kind of going to a dark place right but like some of like some of Sam McMan Freed's confidants who are I think in a very different category
than like these mountain climbers things like that right um they would say things like well he was kind of miserable anyway right so he wouldn't necessarily mind going to jail because his day-to-day life he just he was depressed and kind of unhappy and so therefore you
know that's probably a pretty bad reason to be massively risk-taking um but I think there might be some some element of that I mean maybe if you think of like a it's going in a slightly dark place but like an Anthony Bourdain type
right is someone who you would think of as being very risk-taking and like you know like probably traveling to places where it's objectively pretty dangerous I'm sure he like a very adequate crew with him and things like that um but
like but you know that he never struck me as a risk taker I mean he's always going to places that look dangerous and aren't would be my sense of what he did yeah I mean I guess maybe I'm kind of revisiting now in in in light of his suicide right but like that's a
personality type that like but you know but he liked to um he liked to drink and do drugs and eat spicy food and things like that and I I think I think I think you kind of see like a cluster and he had the you know some obviously penchant
to travel and things like that I think you see some cluster of personality traits there do you ever think much about how broader world history of politics and political leaders may have been shaped by drugs and alcohol so there's a book about how many of the
Nazi commanders were high on different kinds of speed I don't know how true that is there's a book about Soviet Union it's called vodka politics s bankman freed there's various allegations what was taking you see the photo of whatever on his desk how
important are drugs and all of this I mean I'm not a historian of drug culture or things like that you must you've talked to all these people you've thought about it right yeah look I think in the case of SBF that like drugs are maybe less a part of it than some things
but look I mean look I think in general that history is often quite contingent on on very flawed human beings there's a good Matt eaus post about this in the context of decisions about whether people run for president or not from Joe Biden deciding
to step down to like Teddy Roosevelt and things like that um and when you kind of do have some access to really smart people in kind of the halls of power I mean people are often are often kind of winging it you know what I mean they're
making course usually yeah make decisions with limited information um and no Second Chances really often no Second Chances um you know I do think that people who are risk taking tend to Prevail for various reasons right because they are the people on the on
the on the right tail of the graph um you know I think kind of Financial Risk taking probably has some positive correlation with risk- taking as far as substance use um not that high but maybe like 0. 2 or3 or something like that
right um so yeah it it wouldn't surprise me if more important decisions than we think in the history of the world have made in various states of intoxication if there status quo bias should political leaders take drugs more um you know before joee Biden dropped
out right I mean it would have been a funny Scandal if maybe maybe Joe Biden should have slept with the porn star right and and taking some shrooms it would have like changed his his evaluation the way people viewed him a fair amount um and we've had a couple of
like T totaling presidents twice in a row one of them which is interesting I think I'll probably give like the standard um kind of Centrist L of Center answer which I you know I think like I think probably psychedelics are probably
are probably for some people pretty good probably pretty dangerous for for other people um you know otherwise I I I don't know I mean I think I think there's probably I think probably some people are able to kind of simulate different states of Consciousness in different
ways naturally um you know if drugs are one way to kind of get to play to role playay a different person a little bit then then I think that probably is helpful for Fair a fair number of people is the US Presidency now in an age of
what you might call parity in NBA terms a series of one-term presidents one after the other just like the NBA champions keep on turning over and there's no Dynasty so he had this long era of Dynasty you know Bush Clinton my goodness whatever else and now it's over
and there aren't going to be repeats or what's that going to look like so I think part of it is a result and yes so if Trump wins again then it'll be limited to one term um so you would therefore have three one term presidents in a row for the first time since I
think like like 1892 is I was trying to look that up the other day um so I think one thing that happened is that like um the Canon so again I'm 46 so Carter was president when I was born right but like the kind of cannon that you emerge into
when you're kind of first covering politics is post World War II politics kind of you know 1946 through through Bill Clinton 1996 or whatever um that was a period of historically very low polarization in the United States I mean you have lots
of things going on right it's like de facto three party system with Northern Democrats and Republicans and Southern Democrats um but you know but you had relatively low partisanship a lot of bipartisanship yeah um a lot of things are going well things are going pretty
well it's a good time for the US um incumbent presidents get reelected by by Landslide margins very often there's a lot of Goodwill um if you go back to go to like the kind of turn of the previous Century so the kind of Grover Cleveland
years of every year the election is separated by two points right um and you bounce back and forth quite rapidly um like that's kind of that's an area era of high polarization and kind of more like the era that we're in right now um so yeah I mean even before Biden's age
and other problems um the incumbency effect if you tease out carefully has really dissipated um in elections for congress we have a fairly large sample size um and in the presidency um you know you may now have two incumbent presidents in a row who are voted out of
office I mean technically it'll probably comma now but um but yeah so so there is precedent for it but um but this kind of era of Comedy this kind of post World War II era of Comedy that we think Coy not Co Edy that we all think of as being
normal is actually kind of more of the more of the outlier in some ways how long will it be before we have AIS who are better predictors than you are depends on so it's like a let's say it's a centor model so the AI sits down and says Nate you know please talk to me for
half an hour tell me your thoughts tell me what you know you give it your best half an hour worth of Consulting on say the next presidential election and then we just get rid of you I mean we send you out off to pasture and the AI does
the work and you're paid like a a small fee and it does the actual prediction how far away is that I think election for forecasting is kind of like an oddly hard problem where the mathematical structure of it is fairly complex the data is quite sparse
and you often have to make kind of judgment calls based on incomplete information so that might be kind of one of the relatively more robust areas but it gets half an hour of your time right it could pay for more if need be okay
then where then where's the line between like me using an AI I mean in some ways like the book is like you know in a very limited way but the book is kind of like AI enhanced and different ways right um and so look I I look I'm not like
a I am not convinced necessarily that we're going to achieve super intelligence I think it's it's plausible is that it kind of like uh plateaus at very smart generalist human capabilities and is very good in certain areas but but I'm not I become a little bit less
convinced um just kind of in the last six months kind of had to send the book in to to the printer basically of of the inevitability of achieving super intelligence I mean I think the maybe it's not super but let's say until an AI is as good as one of Phil tatlock's
super forecasters I would say that's three to four years away it would be my guess May closer to three maybe even two what what would you say I would take I I would take the over I think on that but over as in 200 or over as in oh it's
five years away uh 15 or 20 15 or 20 that's a long time yeah yeah so GPT 5 is not going to wow you look I mean it Wows me in certain way I mean as someone who's kind of fascinated with with language right um you know I'm fascinated with with the
way language is mathematized in different ways and you know one of the in the book there is a lot on AI including like reasons to be optimistic or pessimistic about P Doom um your readers probably know what pdom is if they don't know they deserve P Doom
right but it does seem plausible to me that like large language models reveal more about the kind of mathematical structure of language than about just the intelligence of of AI right they can now do math Olympiad problems right so there's one forecast by someone working
on this that within a year they'll win math olympiads I could be wrong but when you say that it's only a year away I would take that pretty seriously I I think prediction is actually a pretty hard pretty hard skill that um that probably
life experience helps I mean you know types of prediction right if you're trying to like predict like you have a a phone book of millions of Records right and you're trying to predict you know what's the likelihood that this spam email will be responded to and result in
additional sale I mean I'm sure like AI is already better than humans at that um but things that are less structured I think are are are harder for AIS and hard for and hard for humans and why do businesses not seem to care that much
about most predictions surely this has puzzled you so for 20 years I've been waiting for prediction markets to take off obviously in politics Sports it's more than up and running but most areas they're pretty weak what's the actual problem on the demand
side I think this may be changing I mean you know one of the things I I did and trying to kind of figure out my next steps after after 538 Disney is you know talk to different Financial firms and hedge funds and Wall Street firms about different types of Consulting
Arrangements um you know clearly there are players in the market who were who are thinking carefully about political risk and other types of risk that you can price adequately by prediction markets and I think you know I think there probably is some notion of
critical mass where you have when you have enough kind of liquidity um and enough volume uh to have relatively efficient pricing I mean I think we may now be you know at that threshold when we weren't like four years ago or something like
that right um but take a truly important commercial question like will China invade Taiwan or when will they invade I've looked at different markets or pretend markets on that I just don't take those seriously it's not that I feel I have a better estimate but they
don't cause much updating from me I think that the time Horizons might be too long to be actionable necessarily um in the same way in sport SPS betting um you can probably make money on Futures bets right if I were to bet right now on
like who will win the NBA title in 20124 25 um there are probably some plus EV bets there on the surface however that means I would have to like tie up my um capital for a year right there might also be some risk that the site I bet on
goes belly up or something or that I die or something and so like it's not it's not um these long-term bets I think are are but that's not very long term I mean that's less than a year away and t- Bill rates are higher than they were but they're not that high you have some
marginal funds and things like d bills you're in good enough Health you don't want to do the submersible with the billionaire like often time your Edge in sports betting is like is like two or three points right um two or 3% as an Roi so if you're like if you know you
can put in the S&P 500 and make 8% then it's becomes a negative EV bet but that gets back to my point people should only bet in essence on us equities and nothing else and they're sort of fooling themselves in these other areas and if
they want to spend their money that way I'm libertarian enough but I'm not that enthusiastic about it and I don't bet myself at all really on anything other than Buy and Hold and diversify I mean it is it is fun it's fun for me somehow yeah like
I'm I'm a person who's never bet I go to Las Vegas I'm not even tempted I don't bet on any games I don't do slot machines like what's wrong with me from your point of view no it's probably it's probably rational in in various robust and narrow senses of the term and again
I'm not somebody who's like that big on in casino gambling but like but look it's the intensely competitive nature of things I mean if you look at there's something called like anag do you know this like one of the different personality yeah um so the
two rarest anag types are the type that uh the type that's really analytical basically and the type that's really competitive um and if I take my an chart or anagram I'm not sure how you say it those the two where I have the highest
scores so something about you know cuz typically you think about oh who's someone who's like analytical well maybe they're kind of like an actuary type they're they're calculating um you know maybe they're somewhat risers maybe they're somewhat maybe they're on the
verge of being like a little bit neurotic right that's kind of The Stereotype um and the people in the book are are not that right they're analytical but they want to like uh you know look a lot of times they had things in their childhood like a lot of people
like Elon Musk or or um or Jeff Bezos for example I mean they had childhood trauma but not so traumatic and they had enough privilege in different ways that they were able to still you know have people take their phone calls and things
like that um but like it's often people who who something I think went a little bit haywire and they're and they're not necessarily kind of strictly rational in some sense last two questions first where do you want to travel next um so I have a good friend who's
korean-american we're hoping to go to Korea uh in in December um we're talk that is I've done that in fact I love Korea but I don't know about December I've been very little to the Middle East I'd like to go I'd like to go there more we're talking about Israel a little
before last question what is it you want to learn about next one of the problems with writing a book where you kind of take all the things that you really love is that like you kind of use a lot of your ideas I think a lot you know I'll
give you dumb i' like to Lear more about pot Limon Omaha which is a former poker that I haven't played very much yet yeah I this like list of things like I want to learn more about like um you know European soccer Pot Limit Omaha and like
and like and like wine basically those are all things that I think I would like very much but like I've never quite explored fully again to repeat Nate's book on the edge the art of risking everything Nate silver thank you very much thank you Tyler