Why Geniuses Don't Make Money

Lucky · #1 04-01-2005, 02:36 PM

Well, of course they do, but proportionally they don't. Nobel Prize winners average 140+ IQs, CEO's about 120.

Harvard professors are very smart, the biggest used car dealership owner in your area is probably less intelligent.

Why the disparity and how does this apply to poker????
Well, you could argue geniuses veer away from the marketplace, enter an altruistic world of ideas, etc. where they can do the most good...Ok, there's some merit there, but i really think people move toward what they're good at.

I think, bottom line, people get rich because they understand the marketplace/consumer. Often, this is just a matter of understanding poor people. Whether you invest in small income rentals, own a chain of fast food restaurants, strip clubs, money store, mortgage co, or move up the chain in a discount retailer, you need to understand poor people and why they do what they do.

Moving on to poker, you need to be able to deal with tough players. often this means avoiding them when possible. But the live ones pay the bills. How to extract the most money from them??? You need to understand their thought processes.
I believe this is what creates the much greater earn for the hustlers than the geniuses.

toots · #2 04-01-2005, 02:42 PM

Hustlers do a better job of learning to manipulate people. Geniuses spend their time instead learning how to better manipulate the physical world.

I think there's more money to be made in manipulating people.

EliteNinja · #3 04-11-2005, 11:16 PM

[ QUOTE ]
Hustlers do a better job of learning to manipulate people. Geniuses spend their time instead learning how to better manipulate the physical world.

I think there's more money to be made in manipulating people.

[/ QUOTE ]

People have money. The physical world don't.

David Sklansky · #4 04-12-2005, 06:33 AM

The original hypothesis is just wrong. Unless possibly if you define genius to be one of those few hundered ivory tower airheads who doesn't know how to tie his shoes.

The average net worth of all Americans who are extremely smart is greater than the average net worth of all Americans who are very smart which is greater than the average net worth of Americans who are somewhat smart. There are two reasons why this isn't obvious but if you fall for them it is YOU who isn't smart.

First is the fact that extremely smart people are very rare. Say the top one percent. Now look at the Forbes 400. Say eighteen of them are from the extremely smart group. It is probably more but we will be conservative. A quick glance at that statistic will lead morons to proclaim that being smart doesn't help, you get into the Forbes 400. I won't insult you by explaining further.

Secondly as regards to risk taking, it is possibly true that a higher percentaqe of non geniuses opt to try to become entrepeneurs than geniuses. But this is not because geniuses are risk averse. Rather it is because the pot odds are different for them. They are risking more to win less. Even with no people skills at all, most geniuses can enter the computer field or something similar and guarantee himself a few million eventually. So why would he dream about opening a chain of restaurants? He knows that most of those who try that fail. In spite of that I believe that geniuses actually take more risks than non geniuses. Partly because they are easily bored. Partly because they know if thy fail they can use their smarts to get one of the jobs that is open pretty much only to people as smart as them.

IronUnkind · #5 04-13-2005, 08:48 AM

[ QUOTE ]
The average net worth of all Americans who are extremely smart is greater than the average net worth of all Americans who are very smart which is greater than the average net worth of Americans who are somewhat smart. There are two reasons why this isn't obvious but if you fall for them it is YOU who isn't smart.

[/ QUOTE ]

Did you pull these nebulous stats from the usual orifice?

David Sklansky · #6 04-13-2005, 07:53 PM

Yes. But I'm willing to lay 5-1 odds. Meanwhile I neglected to mention that another way geniuses make money is through patenting their inventions.

The bottom line is that even if geniuses were as bad as some say in "people skills" they would still be on average richer than all but near geniuses who had those skills. That may not have been as true 100 years ago. But nowadays so much of what makes the world go round depends on stuff that only the smartest people have a prayer of fully understanding. In fact the rest of the people of the world should be grateful that geniuses are not a greedy bunch. If they organized and went on strike I'm sure they could significantly incresase their net worth just by this maneuver since it would force everybody else to admit how dependent on them they really are (contrast that to the air traffic controllers strike that Reagen busted with slightly inferior replacements. You can't find replacements for the smartest 500,000 people on the planet. The next 500,000 have no prayer of duplicating their work).

DcifrThs · #7 04-14-2005, 09:22 PM

[ QUOTE ]
[ QUOTE ]
The average net worth of all Americans who are extremely smart is greater than the average net worth of all Americans who are very smart which is greater than the average net worth of Americans who are somewhat smart. There are two reasons why this isn't obvious but if you fall for them it is YOU who isn't smart.

[/ QUOTE ]

Did you pull these nebulous stats from the usual orifice?

[/ QUOTE ]

i never thought my dept. of labor work would EVER be useful in common conversation.

using the annual (and monthly) census current population surveys, i constructed variables that flagged for income/net worth/earnings/retirement and other things like benefits.

i then created a mix of variables that broke up education level into catagories such as grade school, middle school, high school, some college, associates degree, college, some grad school, masters, PhD.

i then used age as a control (so as not to bias the study by age) and proved in each CPS i used that education (not a direct measurement of "smartness" but a very good proxy imo) can be used to "hot deck" or very accurately predict the income level. the two variables are directly proportional, although the rate of increase incrementally is very fast from high school to college to grad school, it is very slow from masters to phd and from grade school to middle school (its an S curve).

therefore, it is VERY LIKELY that the smarter you are, the more you make/areworth/have in equity etc...

this is over a random sample of 128000 americans, which, as concluded by the census, is a very good representation of the general population therein.

-Barron

mackthefork · #8 04-14-2005, 02:05 PM

Rookie [img]/images/graemlins/tongue.gif[/img]

Mack

Lucky · #9 04-15-2005, 02:51 PM

[ QUOTE ]
The original hypothesis is just wrong. Unless possibly if you define genius to be one of those few hundered ivory tower airheads who doesn't know how to tie his shoes.

The average net worth of all Americans who are extremely smart is greater than the average net worth of all Americans who are very smart which is greater than the average net worth of Americans who are somewhat smart. There are two reasons why this isn't obvious but if you fall for them it is YOU who isn't smart.

First is the fact that extremely smart people are very rare. Say the top one percent. Now look at the Forbes 400. Say eighteen of them are from the extremely smart group. It is probably more but we will be conservative. A quick glance at that statistic will lead morons to proclaim that being smart doesn't help, you get into the Forbes 400. I won't insult you by explaining further.

[/ QUOTE ]

Some valid criticims in there Mr. Sklansky. Let me reiterate what I said earlier:

I agree that, up to a point, income does correspond with intelligence (measured for purposes here by IQ).

And I understand how there could be problems with sample sizes in relation to the general population which would tend to produce deceptive or skewed results.

For that reason, let's do it this way:

I would be willing to bet the AVERAGE income of those in America with an IQ in the 120-125 range is greater, than the AVERAGE income of those in the 150-155 range.

David Sklansky · #10 04-17-2005, 04:36 PM

"For that reason, let's do it this way:

I would be willing to bet the AVERAGE income of those in America with an IQ in the 120-125 range is greater, than the AVERAGE income of those in the 150-155 range."

It is only because you won't actually take this bet unless you researched it and beat me, that keeps me from making it. But you have now rephrased the proposition to what I was driving at. We agree on ground rules. And it is utterly inconcievable to me that you could be right.