A while ago I set out with my editor at the IHT to broaden out beyond the financial and accountancy issues on which the "Balance Sheet" column has focussed since its launch in 2002.
The broader premise was that life involves the constant need to make complex choices, with real consequences, based on incomplete information. Even when priorities are unclear, or head and heart are in conflict, there are useful tools and methods to help. Instinct is not a substitute for ignorance.
Space constraints in the newspaper meant that we didn't get far. But the topics remains worthy of consideration, so I propose to offer the occasional essay here. Your reactions are welcome and invited -- by comment or e-mail -- including ideas for other topics.
This column was originally published in the International Herald Tribune on February 2, 2007.
Vegas is No Fun Once You Know the Odds
It's a little complex to explain, without sounding like a complainer, why my recent weekend in Las Vegas — a first-time trip — will also most likely be my last.
A dozen of us gathered to celebrate a friend's major birthday. Our host chose the venue, and who could possibly complain? We had comfortable rooms, abundant food and drink, a poolside cabana with attentive staff - all the essentials for good friends to enjoy each other's company.
Thankfully for our purposes, the larger Vegas ambiance was irrelevant. Compared to its relentless marketing and bloated artificiality, the world of Disney would have looked positively real. When we wandered for breakfast into the Parisian Hotel, past the faux Eiffel Tower and into the disinfected bistro, our waiter actually was a 20- something from Lyon on a year's leave in the United States. We could have kissed him for his authenticity.
In its blandness, Vegas has nothing left of the edgy and faintly sinful style of its bygone era. Our parents' generation dressed up, flying with airlines that still served meals with linen and crystal. They may have left their holiday budgets at the gaming tables, to be laundered in the cash rooms for the benefit of sinister figures from Chicago or Cleveland. But they enjoyed the frisson of tipping a dinner-jacketed captain for improved cabaret seats to hear Frank or Sammy.
I'm not choosing for anybody else. There is a huge, popular market for the over-the-top architecture, the theatrical light and water shows and the ear-splitting night-life sound systems — at least to judge on our Sunday departure amid the enormous worse-for- wear crowds choking the grubby third-world chaos of McCarran International Airport.
I just couldn't get the casinos. Still at the core of Las Vegas, they support the entire structure of phenomenal staff and overhead expense, through the remorselessly grinding odds by which the lavishly appointed houses so plainly always win.
There are two reasons I find no appeal in gambling. Neither is judgmental of those who do take pleasure at the tables — just as long as they don't try to convince me that they have somehow out-smarted the inevitable effects of long-term probabilities.
We all make choices and set priorities every day, from vital to frivolous — weighing risk against reward, and assessing cost against benefit. As often as not, gut instinct or the heart's inspiration prevails over what the head well knows. And that's fine. The scientists explain that the reason we still make odds-defying decisions is that to survive as a species, our prehistoric ancestors' DNA triggered split-second reactions to the giant wolves and saber-toothed tigers.
With the slow pace of evolution, we are little different from the first cave- dweller who grunted optimistically that his drinking gourd was half-full, not half-empty. Except that now it's hardly ever a life-or-death decision whether to press a bet or split a pair. Instinct is wrong too often to be a comfortable substitute for ignored information.
My first concern is that I've devoted a career to the management of my client's risks and exposures. It's my business to hazard big- money consequences on being right or wrong.
With that as a day job, even if not as hazardous as the caveman with only his club against a mammoth, my view of a blackjack table is that it just feels like more work. And unless they're addicted to the rush, crisis managers and first responders — air traffic controllers, paramedics, hostage negotiators — might feel the same, or at least that's how I'd bet it.
Second, success in making calculated predictions based on incomplete information includes paying close attention to knowable adverse odds. I'm as eager as the next guy to have Lady Luck hold my hand and whisper in my ear. But believing that fortune favors the well- prepared, I can't help thinking that it's a poor proposition — and perhaps an affront to the Lady herself — to play against the inexorable probabilities built into the zeros on the roulette wheel or the 7s and 11s at craps.
Life is full of choices made against the teachings of well-known probabilities. Otherwise, whole industries would disappear. If informed rationality strictly ruled, there would be no day traders, nor mutual fund salesmen; convenience stores would be unable to sell the calculable losses of either cigarettes or lottery tickets; no more would appliances be sold with extended warranties, nor vacation homes built on sand bars or flood plains.
My friend Bill, a banker, perceptively puts it that as the caveman's fight-or-flight instincts apply to our modern time horizons for risk aversion and deferral of gratification, the ancient DNA hard-wires us for the adrenaline jolt of the turn of a card or the tick of a stock price.
If Bill is right, and I suspect he is, that would go a long way toward explaining why it can be so hard to defer satisfaction for the long view — to contribute to a private pension plan, or save for a child's university tuition — especially when there is a more remote and seemingly less painful way of achieving the same end -- whether Social Security or college loans.
So on one hand, I understand and am not really against the idea of a Las Vegas holiday built on dreams uninfluenced by reality. That's the very sustenance of such an oasis in the desert.
But for me, the reason to go there — carefully keeping my wallet in my pocket and my hands off the dice — was more concrete: to wish my friend a happy, healthy, and very lucky birthday. Although, while waiting for another such occasion, I will check the point spread if ever the Chicago Bears are again in the Super Bowl.
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