Insufficient Capital
This lack of planning is a flaw that affects many Texas Hold’em players and investors. Instead of viewing these activities as a business they are generally treated like a game (with some reason in the case of Texas Holdem if it is for recreation, but never with good reason in the case of investing). The lack of planning ensures that you will fail to appreciate the downward swings that could significantly reduce your capital.
This usually causes people to begin Texas Hold’em or investing with insufficient capital. The immediate result of this is that when you lose money you start to think about how much money you have lost. This in turn begins to affect your decision making process, usually negatively. In general this manifests itself as taking greater risks than should be taken in order to recoup losses. This kind of pattern can cause you to lose your starting capital quite quickly without you being able to tell why.
In other cases insufficient capital will mean that if you are hit by a bad run of cards in Texas Hold’em or if you suffer an initial string of investment losses that you lose all your capital before the probability of positive expectancy and good decisions are able to work in your favour. Probability would be expected to work in your favour in Texas Hold’em and investing if you make rational decisions. But it is necessary to stay in business long enough for the laws of Pascal and Fermat and investing to help you out.
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