The Success Equation
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Michael J. Mauboussin. The Success Equation
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Harvard Business Review Press
Boston, Massachusetts
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Jeffrey Ma was one of the leaders of a notorious team of blackjack players from the Massachusetts Institute of Technology. To make money, the team counted cards. Their system had two crucial components. First, team members fanned out and counted cards at a number of different tables in order to determine which tables were attractive. In this initial phase, the players stuck to small stakes. They were playing solely to determine if the cards that remained in the shoe had a relatively large number of high cards. The more high cards, the greater the chance that the player will win a hand. When a player found an attractive table, a teammate would join him and place large bets in order to win as much money as possible. As described in Ben Mezrich's best-selling book, Bringing Down the House, the team could express the attractiveness of the table and how large the bets should be with mathematical precision.19
Ma and his team were acutely aware of the influence that luck could have and therefore stayed focused on their decision-making process. Indeed, Ma recounts an instance when he lost $100,000 in just two rounds over the course of ten minutes, even though he played his cards just right: “The quality of the decision can be evaluated by the logic and information I used in arriving at my decision. Over time, if one makes good, quality decisions, one will generally receive better outcomes, but it takes a large sample set to prove this.”20 In other words, he has to place a lot of bets in order to win, because this game involves a lot of skill but it also involves a lot of luck.
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