Zack's Commandments of Risk - Zack Price | Ep 18

Episode Description

This episode explores the concept of risk management through the lens of sports betting with guest Zack Price. Zack has over 20 years of experience profiting from sports gambling and discusses strategies like starting small, tracking wins and losses, and setting clear "commandments" or rules to guide responsible participation.

Zach emphasizes building experience through low-risk bets before increasing amounts. He also stresses reviewing performance every 6-8 weeks to identify profitable strategies. The hosts discuss applying these principles to other arenas of life, such as business ventures.

Overall, the conversation provides insight into minimizing losses from risk-taking through discipline, limits, and learning from mistakes over time. Key takeaways include trusting instincts and gut feelings once a knowledge base is established.

Takeaways:

  • Set clear rules/commandments and refer to them often to guide risky activities like sports betting
  • Start small and test opportunities through low-risk bets before significantly increasing investment
  • Continually review data and performance to identify profitable strategies
  • Build experience through many small bets to develop knowledge and confidence
  • Trust gut feelings and instincts once a base of experience and data has been established
  • Consider responsible gambling features like deposit limits to avoid over-investment

Resources:

Connect with Zack Price:

Episode Transcript

Zack Price  
There's these red x's that I draw, whether I'm playing golf, you know, if there's a, there's a pond on the right and you have a slice, you got to you've got to say to yourself, I'm not taking driver here because I know what can happen. And so whatever you're doing, you have to have these rules these commandments as I almost like to call them to keep yourself in check and refer to them often. And you know, if you break a commandment, we all seem to do that. You go back and you were

Caleb Roth  
welcome to the Stacking Habits podcast with your hosts, David, Matthew and Caleb, our mission each week is to dig into the habits, rituals and routines of guests who are living life to the fullest. But remember, knowledge without action is worthless. So be sure to take what you hear and put it into practice. turn these words into works in your own life. Without further ado, let's dive in. Well, hello, and welcome to episode 18 of the Stacking Habits podcast. I'm joined by my host, Matthew Osborn. And today we have a guest that is no stranger to us. He comes to us from the book flipping world. And we promise we're not going to bring everybody from the book flipping world in. But this guest is unique in that he has escaped to book worlds many people never quite reach escape velocity. They stay stuck in the world of books, not that it's a bad thing. It's a it's a phenomenal space to live in. But our guest today is Zack price. Zack Hello. I know you're originally from Chicago, but actually, I don't know where you live anymore. Is it Vegas or Denver?

Zack Price  
So originally from Cleveland, and lived in Chicago for many, many, many years. And I am currently residing in Denver, Colorado, although I was just in Vegas and got back last night from the soup. And you were also at the National Championship game for to see Michigan when your Michigan alum, correct? That is correct. With Houston, watch Michigan take it down.

Caleb Roth  
So Zach is a man on the move. And we'll get into some of those reasons. He's not not wanted by federal law enforcement as far as we know. But we may dig into that on the show as well. So today, we're not going to talk about book book flipping, we're not going to talk. Well, we may a little bit. But one of the things we want to dive into is Zach is an expert, his whole life revolves around the concept of gambling, or risky. So taking risks, and risk is something that's interesting, I suppose before we dive into all of this, Zach, how would you define risk, let's put a definition on it for our listeners, so that we can kind of all come at this from the same perspective.

Zack Price  
I mean, I would say risk is just basically there's an element of uncertainty in an outcome. And so you have to weigh that uncertainty in sort of place a bet. In other words, like a wager expresses your opinion on something. And if there's a level or degree of certainty, or uncertainty is how much you want to make a bet on that outcome. Perfect.

This reminds me I tried to explain to my girls, I've got four girls under the age of 12, actually, five now. And I tried to set it up and teach them gambling and taking risks on a coin flip. And I gave them each $100. I said, this is my money at the end of the day. But if you earn some money on this, then then we can see what happens. And I tried to explain to them that the odds of flipping heads versus tails is 5050. Therefore, you know, if I gave them one, one to one odds, is that a fair wager? And you know, they're immediately went over their head? I'm like, what if I gave you five to one odds, and you got to call it still went way over their head? So we're gonna save that till our homeschooling curriculum from high school. So I like that definition risk is anything that is uncertain. Matthew, do you have a different definition of risk as we dive into this?

Matthew Osborn  
No, I think it's a good definition of risk. And we're gonna say Right before we jump in, though, I wanted to say congratulations to Caleb, Caleb just had a little girl, not even a full a little over 24 hours ago. So congratulations, Taylor with a new little one. It's exciting.

Caleb Roth  
And normally, I would take some time off of work. But I've been on sabbatical for over a year and see previous mention of four girls under the age of 12 in the house. So I do not get much time with her except for early morning when everybody else is snoozing. So as soon as we're done recording, I'll be back snuggling with her.

Matthew Osborn  
We got some really work. I

Zack Price  
mean, you know, the three of us are basically just friends chatting. I mean, we've been to nuggets game together and hung out in some conferences, played golf, we've played a lot of golf together. So that's been fun.

You know, define work, you know, we're defining rest, I guess you got to define work. We're not getting paid for this yet. So we're it's not professional work at any stretch of the imagination.

I mean, if you want to talk about work, I would say, you know, unofficially like doing something that you you know, don't want to do, but you know, you have to do and so you put in that effort to get it done. Like it. I like it.

Caleb Roth  
That's the sort of where habits come in habits are the pieces of work that you put in to get the desired outcome that you want to get even whether you want to do the thing or don't want to do the thing. So Zack, tell us tell us a little bit of about your current job today, we'll get into book flipping and some of your other starts back in back playing golf in high school even based on our show notes. But what do you do today? What is the day job of Zack price?

Zack Price  
Yeah, you could say my my day job is I'm in player development for an online sports book, fanatics points bet sports book, we're going through a merger right now. But my role is basically to let people know about the brand and bring them on as players and you know, eventually get them to become VIPs. And enjoy all the fruits of online betting in America today, which so I take clients to noggins games and Avalanche games. And, you know, I do some analysis on the side and write a little article for our newsletter. So just everything sports betting, and for those that are listening that aren't aware, could you give just a 32nd overview because sports gambling used to be illegal, it used to be finding a bookie in your town and placing some bets and there's a lot of shading is going on. That's not the case anymore, right? Totally. It's the world has changed in sports betting. So in 2019, paspa was repealed, which basically allowed the states to decide if they want to legalize sports betting. And it used to be only the state of Nevada had sports betting. So I would go out to Las Vegas, as often as I could, I'd meet you out there. And once in a while, Caleb and we would play some golf and bet on some basketball and some March Madness and golf. And that was all legal in Nevada. But as soon as I flew back to Illinois, and you went back to Indiana, you could not place any bets. And so in 2019, New Jersey became the first state outside of Nevada to legalize sports betting and now we're at you know, like maybe even two dozen states already that allow it. Colorado is one of them. Indiana, Matthews down in Arizona, you can do sports betting in any of those states.

Caleb Roth  
Perfect. It'd be a race between legalized marijuana and gambling to see which one gets to all 50 States first,

Matthew Osborn  
I know how many states would you say sports betting is right now?

Zack Price  
I don't know off the top of my head. But you know, my belief, Matthew, is that we're gonna get to 48 states outside of Hawaii and Utah. I think every other state will eventually legalize it right now. Florida just got legalized not that long ago. California and Texas are putting up a fight. But I think eventually we will see them legalize.

Matthew Osborn  
Interesting. What's the reasoning for Hawaii? Utah makes sense. What about Hawaii?

Zack Price  
I think they just want to keep their tourism pure. And based on the Aloha experience, I don't think they want people sitting inside with their phones.

Matthew Osborn  
That makes sense off brand, I guess for the state of Hawaii. So

Caleb Roth  
Zach knows a thing or two about risk. That is your career. And you had I know you still gamble a bit, although I know some of that's been limited, because you've done so well. Can you give just a two three minute walkthrough of what that looked like? And maybe some of your bigger wins or, or bigger losses even?

Zack Price  
Sure, yeah, I would say I've scaled down my betting a little bit as I've just jumped on over the counter on the other side, to work for the sports book. And, you know, kind of getting into the industry and looking long term. But for a while, yeah, I was earning my income off betting sports, specifically the NBA and the PGA Tour. And, you know, it's all numbers based Caleb, so like, I guess I'm a numbers guy. Because if you gave me a handful of dried pasta and a pot of boiling water, I would say how do I make spaghetti. But if you give me an ad screen with all the odds and the numbers, I can make a lot of money. And so I went into it's just a natural thing for me. So I majored in economics in school. And I've always been all about starting businesses, and a lot of those businesses had to do with sports, and so put sports and money together. And that's just my thing. So I've made quite a good bit betting on sports. And, you know, even to the day, I do do some betting as I did in the Super Bowl in Las Vegas this past weekend. But, you know, for the most part, I'm trying to get into the industry and make an impact there.

Caleb Roth  
So how do you differentiate? We'll stay on sports just for a few minutes here. How do you differentiate between a gamble and a risk? So a gamble to me is I like rivian stock. And so I'm just gonna throw money in it. And I haven't researched too much. I don't know what their cash on hand is. I don't know necessarily much about the future of electric cars, except they're cool. They're sexy. And I think I think the world's going that direction. How do you make that differentiation between that like, Hey, I just I'm assuming it'll be good. And I'll just throw some money at it versus a calculated investment versus a wager. So I guess let me reframe the question. How do you differentiate between investing and gambling? Or is it the same thing in your mind?

Zack Price  
Yeah, well, I do consider myself like a sports investor, not a sports gambler. So every bet I make is gonna have in my opinion, wouldn't that be what a gambler says about themselves too, though, I have a pretty good track record. So you know, I like to say that I'm an I'm an investor and every bet I made It has an edge to it where I believe that I'm going to get to profit from that. I still look, I'm just like everybody else, I'll make a bet on my Cleveland Cavaliers or Browns to win the Superbowl. Which, by the way, they've never even been to a Superbowl. But, you know, to answer your question, I would say anything with risk, you are taking a gamble. And so anything with risk is gambling. But there is positive expected gambling. And that's what I tried to do. The expected value, you know, like, let you mentioned the coin flip with your daughter's Taylor. coin flip is a 5050 proposition if you gave me you know, a 52% payout on heads or tails, I'm still taking a risk that next flip could be anything, I don't want to put my entire bankroll on that next flip, even though I would be getting an edge, but I would make that bet every single time for a certain amount of money, because I would have the edge if you flip the coin 1000 times and you gave me 52% On a win and 48% of loss, I'm going to make money overtime. And so that might be the simplest way I can explain that is I'm taking calculated risks. And to that point, you're still going to be wrong, a lot of times Correct. Even in that example, we talked about, you're going to be wrong half the time, but the times you win, you're making, you know, two points of margin on your money. And so that expected value over time adds up. How are you wrong just as often as most other sports investors, I would say I'm even wrong more than most people because what I'm betting a lot is futures. And so take a golf tournament, for example, take the Masters, which I've had a very good track record of turning a profit on many, many years in a row, the lowest odds on a golfer to win the Masters, let's call it John Rahm, the defending champion might be 10 to one. So his odds of winning are one intent. And so if I bet John Rahm, I'm going to be wrong, as you know, by the math nine times out of 10. And so again, it's all based on the eyes. And, you know, your level of certainty just has to be better than the actual odds given. So if I'm bet and I like to bet long shots at the Masters as well, I went on Hideki Matsuyama, a few years ago, it's 62 to one. So you know, I'm going to be wrong more than I am right. When I'm betting futures, I bet NBA futures and even the NFL futures, I had Kansas City attend to one just to win the Super Bowl, and they want and so that when I hit but I also bet on, you know, a couple other teams if they didn't win.  So I might have gotten one wins and five losses on the NFL futures, but I ended up turning a profit.

Caleb Roth  
I think there's a really good life principle in that as well is you're going to be wrong a lot. Even looking at the businesses that Matthew and I have started, we failed, a lot of time we failed more than we've succeeded. The trick is the times we've succeeded, we've massively succeeded. And those those runaway wins sort of balance the ship and everything kind of works out. So you already mentioned position sizing, meaning if you think you're going to be right, you don't put 100% Your money on one bet, because all it takes is one wrong coin flip, and you're out of luck, and you're out of money, and you're back on the street, or you know, going to get a real job. So you talked about understanding a little bit of an edge, I think most listeners would think through their work environments, or flipping for example, because that's what a lot of our listeners do. And it's pretty easy to go, Yeah, I'm gonna buy these books, you know, buy this copy of atomic habits and flip it. And the odds of it selling are pretty high, because it's got a, you know, it's usually top 10 sales rank on Amazon. Now, there's not 100% chance that it sells, but if you list it appropriately, there's probably a 99 plus percent chance that it sells,

Let's shift gears and talk through when it comes to working, or dating or any other broad category. Given the expected value is up a little bit. If you can flip something 1000 times, that's great. But in life, we don't usually get 1000 chances at dating, unless you're, you know, a massive player just enjoy going out on Tinder dates, you don't usually get 1000 cracks at a career. So how do you then make calculated decisions about making the next step let's let's sort of poke at that concept a bit.

Zack Price  
I would say just to start small and wide Learn, Build experience, you know, get some data and build some confidence in what you are searching for. So in the arena of say, book flipping, you're gonna want to start by in I know, we talked about the scale of like, so you're gonna start by scanning the books on your bookshelf in your house, or your brother's book or your own books, your books from school and your childhood and see, you know, with no risk, what's worth money and try to sell those, then maybe you're gonna want to venture out into a thrift store or library sale where they're $1 or $2 a book and again, we're looking to make five bucks, 10 bucks 50 bucks on these books. So it's just like buying futures and a golf tournament where you're spending a buck and you're trying to turn it into five that's a 500% return. You can have a couple of duds in there you can you can miss on a few and still turn a profit and all the while you're Learning, okay, you know, why did that golfer win the tournament? Oh, he has a good course history there or, you know, he hits the ball right to left and at Augusta that's going to help him with the book, you kind of learn, oh, nonfiction books are better. Textbooks are even better religious books sell really well, children's books, you know, they're not worth as much. And so you build that experience, to where when you're ready, you can make bigger bets. And you can almost do it without an app like ScoutIQ. You can almost eyeball an ads, I can look at a Masters board now. And I can know without digging into the research in historical data. Oh, that guy that's a great price I'm on, you know, Scottie Scheffler I need to fire and I need to fire big right now. And so I would say that is how you start, you know, small and wide. And then you kind of like you build that experience, you get the data to the point where you have such confidence in what you're doing, you know, when to make a bet. And that will apply to job searching now apply to dating, you're gonna go and you're going to meet a lot of people that make friends, like you're going to meet some, some shady characters, and you're going to meet some good guys. And when you meet, like you know, somebody that you really get along with, and you trust their values, you know, you take that next step, Hey, you want to grab drinks, or hey, you want to go play some golf, get to know somebody, and you have confidence that this is going to be a relationship you can build. So let's break that into a couple of bite sized steps.

Caleb Roth  
I think the first part is simply start small. So when it comes to let's say you want to learn to flip books, do you have a day job, we're not advocating quitting your day job right now and jumping headfirst just because you saw some some guru on the internet, that's making it work. Right? You got to test it out for yourself. So start small, keep the investment small. Our last episode, we talked through our other co host, David bought a Porsche. And he thought that was his that was his dream car for so long. And we talked through it, the oil changes are expensive. The maintenance is there, he lives downtown Denver takes the train rides his bike. So he doesn't really use it as much as he thought he would. And you know, he's actually considering selling that Porsche now because it didn't, you know, it's not making him as happy as the costs seem to be, you know, justified. And so it's one of those things is Could he have started smaller? And we talked through that? Could he have rented one? Could he have talked to more owners before just jumping in and saying, Hey, this is my drink thing, and I'm going to do it. And I think with most things that we're talking about, especially careers, is yeah, you can start on the on the sides, while we call them side hustles. And that's a great way to start small, well, other principles come to mind. So start small, don't put all your eggs in one basket, you don't have to make a huge leap, you can kind of slowly start and prove to yourself that you can do it as you go. What other principles kind of come to mind as you're thinking through risk.

Matthew Osborn  
We'll pass on that same vein of we were talking about, I'm curious specifically, when it comes to sports betting? Do you have hard and fast rules you set for yourself that you will not break under any circumstances? For example, I will never put more than 10% of my funds in one specific bet. Do you have those rules set up for you that you abide by? Or do you kind of play loose as you go along with it?

Zack Price  
Absolutely do I have rules I call my commandments. And I wrote it down like on a little memo pad and I refer to him often I'll post it on the wall. And it's just like, you know, the where I've failed in my bedding, you know, habits that I might get into that are negative areas that I want to stay away from, but that are so easy to fall into. Absolutely. And you know what we're all human. And, you know, gambling in itself is is a sin in a disease where you have to be responsible. And so you know, I do advocate for for Responsible Gambling, but um, you know, we're all human and the blood rushes and you want to make these crazy gambles and so yeah, I treat it like a business. And that's the number one most important thing when I'm sports betting as I turned professional is, you know, I'm not just going on my gut instinct, now, I'm tracking all my bets. And I have a limit size of you know, whether it's 2% of your bankroll or 5% of your bankroll, or, you know, don't bet college basketball in the month of February, whatever it is, you know, you learn where these disasters are, or, you know, I'm trying to think of the word I use with you guys right before the show, but there's these red x's that I draw whether I'm playing golf, you know, if there's a there's a pond on the right, and you have a slice, you got to you've got to say to yourself, I'm not taking driver here because I know what can happen. And so whatever you're doing, you have to have these rules these commandments as I almost like to call them to keep yourself in check and refer to them often. And you know, if you break a commandment, we all seem to do that. You go back and you review like that or what not.

Caleb Roth  
What other commandments do you have?

Zack Price  
Oh, man, I wish I had them in front. You know, some might be like, uh, you know, like, like, in college basketball, like I joked a few minutes ago. Like I don't want to bet on college basketball after a certain date because the market sort of solidifies and I'm no smarter than the bookmakers when it comes to college basketball. And so I found myself just continuously breaking even, which to me is almost like a loss because it's a waste of time. And so after a certain point in the season, I just stopped that in college basketball, but then I'll be watching a game or I'll I'll see the schedule, or I'll see a line and I'll say, Hey, that looks pretty good. But the truth is, is you know, what, Zack, you know, stay in your lane and make the bets that you know, are profitable. And, you know, I gotta keep reminding myself that on any front. And so, you know, that would be like an example of a commandment I have, that I need to, you know, specifically be strict and following way to lunch madness,

Caleb Roth  
And have your commandments all come at the the result or expense of a mistake you've made?

Zack Price  
Absolutely. A mistake I've made or just like, you know, things that I know will take me to a place of negative expected value, but usually it's trial and error. You know, no one gives you the playbook to be a professional sports bettor, you know, you guys put out tools to be a book flipper, but you got to get out there and you have to make mistakes, you have to feel that pain, you have to you know, do an E flip, where you're buying a textbook for 50 bucks, and then you realize the textbook season just ended and they're coming out with a new addition and your book isn't worth anything anymore. Until you do that you're going to take these risks and calculate the gambles and you're going to make a mistake. And so the best way to create your own commandments is aside from watching all the videos and listening to all the podcast is to get out there and take some chances, make those mistakes, look at the data and say, Oh yeah, I never want to do that.

Caleb Roth  
Again, I think a big part of that is not putting the eggs in one basket, I'll share just a quick story. I've talked to a lot of Amazon sellers that find great products to flip. And you know, unlike books where you're finding typically one off of an individual title, those that do wholesale, can go out and buy 1000s of units of something. And a lot of these things will sell 1000s of units a day. And so it's not uncommon to go out spend 50 or $100,000 on a product and realistically expect to sell it out and get your money back in some profit in as little as you know, four to six weeks. What's interesting though, is I've talked to people to see these crazy opportunities and they've they started small, they started flipping a few items, and then sort of found their niche and found their success. And success tends to compound. Once you find some success that usually leads to the next level and the next level in the next level. But one of the mistakes I see. And I'm curious if you've seen this, or if maybe I'm looking at it incorrectly, is they will take 100% of their money and throw it into this next big thing because they proved it with a small test order. And then they ramp up and they throw all their money. And let's say they're successful, they turn 50 grand into 60 grand. And then they say hey, I'm gonna roll the entire 60 grand back into it. And I usually caution against that, because they're just one mistake. And the way I think about risk is exactly what you said, it's a chance that something uncertain happens. But I've heard risks described one step further, which is, once you factored in, all the things that could go wrong. Risk is whatever remains that you still haven't quantified. So there's always something that could go wrong. You know, when you think about spending 60 grand on product, you wonder maybe it could be a fake product, maybe the pricing could tank, maybe the listing gets suspended. And something that happened to this particular user is their Amazon account got suspended. And so that wasn't even in the realm of possibility when it comes to risk. And of course, that's what happens. And all their money was tied up. And eventually, through lawyers and what not, they clawed as much of it back as possible. But you hear these stories, and that's one of the biggest challenges and problems I see is when people continually throw 100% of whatever they have into something because you're just one mistake away at that point. Do you agree or disagree with that assessment?

Zack Price  
Yeah, I would totally agree, Caleb, and you know, we can we can relate this to almost anything, any of the topics we've discussed. So like with my sports betting, when I started, I'm specialized in NBA props, what I did is, you know, myself in my math partner, who helped me build a model to calculate the percentage of return on investment of my beds, because we call the building a thin wide wall. And so what I mean by that is, we would make bets you know, starting testing things out from $50 to $250 per prop. And based on the ROI we were expecting, and obviously betting at that level, no single outcome was going to take me down and I was building data and experience learning what is winning what is not, and it turned out that by placing 50 there and 100 there you know if I really liked when 250 there across the slate of NBA games each night over a course of you know, several weeks and months and obviously into a season is no single event was going to take me down and I was going to learn where am I profiting and where am I losing and so it turned out that like a lot of my profits were betting unders on superstars. points. And so that might mean LeBron James over under 30 points. And it turned out that the books made his prop pretty high for the most part, maybe even more than the data would show. And so I would start taking unders on superstars. But even still, I wouldn't make those bets. But once in a while, I would find, let's call it an error, or they call it a palp. Sometimes in the industry, something that just looked really good to me, again, I wasn't going to take all the money that I've made and saved up and put it on that unless it was a no lose situation. But I would, you know, up my bet, I would step it up. And I would know, based on my experience in my data, that's where I'm going to place a bigger bet. But I never want to put myself in a position where I lose everything. And, you know, let's let me just continue and talk about book flipping, right, so we talked about scanning the books on your shelves, if you're gonna go out to thrift stores, a library sales, for two bucks a pop three bucks a pop, you know, then you might go to a bulk buy, you might find somebody who wants to sell their whole collection for several $100 or $1,000, you might then up it up to E flip, where you're buying books at $25 $50 $100 a pop, you know, then after all that data you're gonna have, you're gonna be able to trust your gut and know when it's time to make a bigger buy. So, you know, in my case, I started I'm a book publisher, I was for many years, I started reaching out to big publishers, Hey, can I buy your overstock and I would buy pallets of books, and then we got into PalletIQ, and you're scaling up, you know, I wouldn't suggest somebody, you know, start with your a bookshelf in your room, and then, you know, for your office, like then move it into a home office, you know, you don't want to buy a warehouse right away and put all your savings into a 12-24 month lease, you know, get home office fills up, go to your garage, garage fills up, let's get a storage unit, you know, storage units filled up, maybe get another strategy, maybe a shared warehouse. And as you scale up, and you see this as successful, maybe get your own warehouse. And that's how I would do it. I wouldn't just jump in, let's get a warehouse, let's get pallets of books coming. Because then your time and your resources are going to be full. And if you make a wrong decision, you know, you're, you're in tough luck right there.

Caleb Roth  
So going back to the concept of principles, we talked about starting small, don't put all your eggs in one basket. Do you ever think about what happens if you need to pull the plug and just wind down the entire thing. So if you're going to thrift stores and you decide to stop selling, then that's pretty easy. You just stop going to thrift stores and whatever inventory you have, you've sort of have to unwind that. Now if you have a warehouse and employees and a three year lease and internet that you've prepaid, that's a little bit harder to unwind. So do you kind of begin when you decide to take on new risks? Do you start to think about how do I extricate myself or how do I quit?

Zack Price  
Absolutely, you know, famous movie called Rounders, the poker player said, always leave yourself out. And so a perfect example is what we just talked about. I used to go out to Vegas before online sports betting in bed these superstar LeBron James unders and it continued with online sports betting Joel Embiid. And Luca dancik, and betting the Unders and making money and you know what happened, Caleb, you guys probably noticed Matthew is scoring in the NBA started going up. And you can't just take unders on superstars as they're allowing them to score more freely. And what happened was I started breaking even instead of turning a profit. And like I mentioned before breaking even as a sports bettor, you're actually wasting a lot of time, energy and resources. And so I had to pull the plug on my little model that was successful for several years because it started winning and losing winning and losing and I wasn't getting anywhere. And I just had to say you know what, that's an edge that I don't have any more time to find a new edge and

Caleb Roth  
How did you know how did you know between your guts and the spreadsheets and looking at that when when was enough enough because I think a lot of people feel that were even like Airbnb Matthews sitting in one of his Airbnb is right now and that's a trendy thing to get into. And at some point you start to realize that maybe maybe it's peak capacity there's too much supply. How did you know when it was time to pull it? Was that a spreadsheet decision or a gut decision?

Zack Price  
Well the spreadsheet was telling me I was breaking even and when you when it feels good when you know I'm on to something and when you lose you're okay what's going wrong here let's just keep it going. And so you want to sample size and so everyone in everything you do the sample size might be different with an Airbnb and might be three. With my sports bets, I would make a variety of bets on a variety of games and like, you know, again, sample size if I made a bunch of under bets on you know, one game where the Lakers played the Mavericks and I had Anthony Davis and LeBron James and Luca Doncic unders and Kyrie Irving unders and the game went to double overtime and they all end up scoring more. I don't want to use that as my example. But over time over you know with me I'm trying to think of when I pulled the plug it might have been like, eight weeks, two months like where I just noticed like I was just treading water. And what why is that scoring up and my model isn't calculating, you know, for the recent games, as much as it is for historical data, I need to just take a step back and stop this betting, you know, you can always scale down, I could just make my bet smaller and kind of use that to look at the data or just backdate the data. But I'm definitely after, you know, in my experience, let's call it six to eight weeks of not turning a profit, I realized, you know, something, something here is off, and I have to recalibrate and, you know, actually pull the plug on this project. So I can focus my time a limited resource into something where I know I'm going to make some money.

Caleb Roth  
Yeah, so knowing your numbers certainly factored in and having some sort of a review process where you go back and reflect and analyze and say, Hey, this thing has worked well for yours. And your case, could be the same thing in books, maybe maybe everything's worked fine in the past, but something slowly begins to change. And if you're unwilling to reinvent yourself and find the next thing, we hear about this in the stock market, all the time, I used to day trade stocks, I lived in China for a summer, I think Matthew and David didn't know that we were chatting one time, they're like what, go back to that it wasn't that glamorous, it was a college internship. But when you trade stocks, you tend to find edges, exactly what you talked about unders on superstars, you might find that you can go in and scalp trade or swing trade or do certain certain things. And I'm not an expert by any means. But you could go in and find these little edges in the marketplace. But eventually those edges, everybody sorts to find them. And then that edge sort of balances out, it's gone. So one thing I've heard too, is we all have those stocks, like I bought Amazon stock 15 years ago, and of course, if I was smarter, or had the foresight, I would have bought a lot more and sat down instead of flipping it when it went up, you know, 20%? How how do you evaluate some of those because I think everybody's had those opportunities where they saw an opportunity and either made a really small bet, or didn't bet at all. It could be like Bitcoin, you know, if you heard about Bitcoin in 2013, or 14, or whatever it first came out, and you're like, Man, if I just put $10 on it back then... look at me now, how do you think through those? Do you allow that to serve as a data point for you? Or do you just kind of say, hey, you know, younger, Zach didn't know that I'll just cut him some slack.

Zack Price  
Yeah, so I see this all the time, from friends, clients, just, you know, on TV, and in the stands of the Nagus games. If people say, oh, man, I knew Jokic was gonna have a triple double. Why didn't I bet it? I missed that one. And the truth is, is that again, over time building the experience in the data, you're never going to have all the answers. But what you have to do is trust your instinct and trust your gut. And so it sounds so simple, and it sounds cliche, but I've learned in my later years, as my beard got a couple gray hairs, that I have to trust my gut. Because now when I see an opportunity, I know I have to place a bet. And that is in life. And that is in sports. And that's book buying whatever it is, it doesn't have to be a big bet. If you put a little bit of money a Bitcoin in the right time to say, You know what I gotta, I got a feeling about this, I have a feeling this is going to be big, you don't have to put your life savings on it, put something you're comfortable with, so that you won't say, oh, man, I can't believe I didn't do that. And so I you know, you can always buy in like sort of like a pyramid scale, starting with the tip of the pyramid, put a little bit in and then scale up, you know, start building that that pyramid out to where you know, you do make a bigger bet when you do feel comfortable. And so against thin wide wall like if you have a good feeling about selling put a little scratch on it, and reap the rewards. And if you know you're wrong, you can you're fine. So I think my main lesson is this is trust your instinct and trust your gut. Once you have that data and experience built up, you're ready to place those bets when you feel them.

Caleb Roth  
And I think those data points when you go oh man I missed out on Bitcoin or I missed out on Amazon or Apple or whatever, whatever stock you want to fill in the blank with. I think those just like your commandments where you've learned by being wrong, I think the same thing can serve you where you go, man, I had this gut feeling I didn't act on it. That's okay. I now have this data point and I know what to look for the next time around. So I do have one concept of I'd say gambling I don't gamble a ton I messed around in sports a bit partly because I've met you and some other people that had been really deep into that world. And it's it's it's sort of fun. It scratches an itch but for me I don't want to go that that much into the numbers. Again, I look at my we talked about it in a different episode. But where I made money last year was on things I knew, working with libraries, flipping some colleges, buying book collections, like things that were in my wheelhouse selling spreadsheets, where I lost money was day trading stocks because I got greedy, right? I thought it had an edge and I threw more than I should have, you know all the principles we talks about starting small testing and a wide variety tracking your numbers, not putting more than, you know, two to three percent of your net worth into one individual. But I think I broke all those rules. But one principle of gambling that tends to happen is I've played a few rounds of blackjack, and I'm a nerd, I studied basic strategy, I know what to do and all the situations, and I know that the House still has an edge, because you can't really count cards anymore because they, they deal with success. But regardless of that, one thing I found is that stuff tends to be stickier than you think. And so you think a typical hand of blackjack is roughly 5050, you're going to win half, you're going to lose half that just almost a coin flip. And so what you would assume is that you're going to win, if you play 10 hands, you're going to win five and lose five, maybe you'll win six, lose four. But what really happens is over 100 hands, you're going to have stretches that are bigger than you think same thing with a coin flip, you're going to have six or eight or 10 in a row, that go your way, or don't go your way. So one thing I found is I get frustrated. I know that's what that's what the casino wants to happen, where I'm like, Hey, I'm playing along, I'm just playing the $5 minimum. Actually, someone else that was in Vegas, for the Superbowl said it was $500 Minimum hands for Blackjack, which that's a lot steep. But I'm going along playing my game and I lose like three hands in a row. My brain tells me Okay, that's pretty unexpected. The odds of me losing four or five or six are pretty low. So I'll start ramping my bet size up. And what happens is the streak continues. So do you see that? And how do you protect against that, because I've certainly run into that myself.

Zack Price  
Yeah, this is such a great concept. So I'm gonna give a quick shot to my friends Sunil a mentor of mine, he told me about an experiment on in a classroom college professor said, I'm going to split the class up into two groups, you're going to get a coin. So we'll go back to the coin flip with your daughters. One of the groups is going to get a coin, and they're going to flip it, call it 50 times, and they're going to record heads and tails on a piece of paper. And the other group is just going to write down a random heads, tails, heads tails, and I'm going to be the professor, I'm going to be able to tell you, which group had the coin in which group just came up with heads or tails. And the reason why he knew and he was able to do it is because when you're flipping the coins, you're gonna get a streak of like seven in a row heads or something like that. But the group that was just writing it down, they never wrote down heads, heads, heads, heads, heads, heads, they just mixed it up. And so the professor knew when he saw that streak in the middle of 50, or 100, flips, that was the real coin. And so I think this is a great lesson for everybody learn. And there's a thing called the Martin Gill principle where the Martin Gill style of betting in blackjack or anything, which is where you make a bet. And if you lose, you double it. And if you lose, you double it because you think a 5050 proposition, you'll eventually win. Well, that's a dangerous way to bet, because you do hit those streaks and the human nature is to chase your losses. And so I like to say, chase your dreams, not your losses. Because when you start losing three, four in a row, you want to double and press but the truth is, is that every single individual coin flip blackjack hand sporting event, is an individual outcome. And so every time you flip that coin, it's 50/50. And so if you get four heads in a row, and you think you know, the roulette, the roulette wheel, they show you the numbers on the Roulette Wheel in Vegas, and they show you and you see a wheel that has seven black in a row, your instinct is to say, I gotta bet red, but the truth is that next spin is, well, less than 50%, because there's green zero in there, you know, 48% 47%, Red 47%, black, a couple percent on green on that spin. And so if you're just going based on the historical, you know, flips on these coins on the Roulette Wheel, you're not really making the bet on that next outcome. And so, you know, it human nature wants to push it. And we all felt that before, but whether it's stock trading or sporting event flip of a coin roulette spin, you got to take the next event as an individual outcome.

Caleb Roth  
I think that's interesting. If once you understand that principle, where you're going to get for your, in your case, you know, seven heads out of flipping a coin 50 times, which seems irrational, you don't think that would happen, but it tends to happen. I think once you understand what reality is that allows you to make some better decisions along the way, because in our own, you know, fail or not, not foolproof, whatever the opposite is fallible minds. We miss out on a lot of those things when it comes to risk. So this is this has been a good, deep dive into the concept of risk. Let's let's wind things down a little bit. Matthew, do you have another angle or two where you want to take this?

Matthew Osborn  
I was curious, do you have the you talked about the commandments for your sports betting? Do you apply that same thing to other parts of your life at all? Do you have habits at all that you apply that to because my mind immediately went to a few episodes ago we were talking about how we should set up these kind have almost commandments in our lives for habits as well of, hey, I'm allowed to miss one morning waking up, but I can never miss two in a row, I'm allowed to skip the gym one day if I don't feel like if I can ever skip the gym two days in a row and kind of setting up those commandments, like you said, for a bedding, but for a habit or a goal or something we're trying to chase, do you apply that to other areas of your life as well right now?

Zack Price  
Yeah, I do. And you know, with with selling, like sports betting as a business, like I want to be really strict on my on my on my commandments, because you know, slipping up on a commandment with with sports betting or in business can really have destructive consequences. Same with life. But you know, like, everyone's different. I follow a bill belcheck quote, no days off, right. So when I get up, you know, I'm grinding every day, whatever it might be, you know, Monday through Friday might be the day job on the weekends, it might be you know, get your butt out of bed and hit the driving range, or whatever it is. I think everyone could use some commandments in their own life of where they find themselves slipping up. Or isn't none of us are perfect, and we all have our faults. So just just knowing your own personal self, right, knowing your faults, I guess we could just say is like a habit that you would want to pick up. And, you know, set some ground rules for yourself, you know, Tim Ferriss and his cheat day of eating right, like, you know, six days a week, I'm going to be healthy, because I know that on Sunday, I'm going to get, you know, fast food and pizza and drink Coke all day and have Snickers bars. And that kind of gives you that leeway to let you you know, fire off on on your commandments. And even with sports betting, maybe it's that, you know, you might not take it as serious as me and but you want to be profitable, you know, maybe it is I'm going to work as hard as I can. I'm going to grind out my profits. And then when it comes to the Masters, I'm just going to have a little fun. I know I'm going to be able to bet my long shots on that tournament. So just you know, exact, you know, keep it discipline, but when you get to the Masters, you're going to be able to take a guy who's 100-to-1 or 200-to-1 and go for it. And if you lose, that's okay. So I would say in all parts of life, you got to be disciplined and give yourself a little bit of leeway.

Matthew Osborn  
Yeah, this is sports betting specific question. But I'm curious a lot of times be looking at stock trading and people teaching how to do day trading. Almost always they recommend starting with a paper trading account getting used to it and slowly working your way up from there. Does that exist in sports betting? are you when people are coming to you? Do you say Hey, start with the paper trading type thing but paper sports betting a first or is that not the same type of thing with sports betting?

Zack Price  
Yeah, great question, Matthew. Absolutely, you can paper trade, there are tons of apps out there, where you can just like track your bets. And you can actually look at the live odds and kind of like, you know, a lot of people will bet 50 bucks, they're 20 bucks, they're 100 bucks there and they keep track of it in an app. Well, you don't have to make the beds you can just track it. And so Action Network has it there's an app called bet stamp. We're professionals or talents or just normal betters can track their beds. So you could just track it on there and keep track of your profit and losses. Again, start with absolutely would recommend starting with just tracking your bets and seeing where where you are winning and where you're losing. If you don't want to do it like that, let's just like do a realistic way to track your bets. You know, get yourself the fanatic sports book app or the points bet sports book app and make $1 bets, like just a way to track it. Because then you can kind of see in the app with real lives. How you're doing without risking anything, really. And you can see if your account balance is going up, if it's going down, where you're finding success where you're not, you can take some chances in some areas you might not want to. But you know, you can absolutely track your bets on paper in an app with ease. There's so many tools out there to do this.

Matthew Osborn  
Yeah, it's good to know,

Caleb Roth  
For me... And again, it's kind of one of my commandments. And Matthew, I think you've read it as well, but 12 rules for life by Jordan Peterson. And I think he had to follow up 12 more rules for life because 12 commandments wasn't enough, he must have made enough other mistakes, to to have to write another 12. But I think it's good to have those. Often when it comes to habits. It's it's easy to let yourself off the hook and say, Well, I don't normally gamble. But I you know, Super Bowls coming up, I want to jump back in. And when we set rules, then it just becomes easier. And we talked a lot about it in our last episode too is what are ways you can add friction. So for me, I got into sports gambling a little bit because they had some of the no risk offers. So you could put 500 up to $500 down I think this was a couple years ago. And if you were wrong, they'd give you your wager back in the form of credit. And then you could find something that was you know, 10 to one odds in your favor, that you know, bet all of it and most likely get it all back and cash out be done. Well, it just so happened that I put you know, I think I put $200 down at something on a long shot because I was like might as well. And that long shot happened and I ended up with like $1,200 and then I'm like, hey, it's house money. And I started gambling a fair amount with that money and again, it was all off $200 originally didn't really matter. But for me what I found was I would bet on college basketball because that's how thing, and I'd be betting on spreads. And so a game would come down to the end. Like I'd be watching Michigan basketball, Michigan's up eight, and the game is out of question. There's like 14 seconds left, but I needed to get to eight and a half. So I need them to get one more point. And I can just feel my heart rate going crazy. And it's like the outcome of the game doesn't matter anymore. But I'm getting emotionally tied up in the fact that I hope they like get followed and get a chance to shoot more free throws and make at least one of them. And the other team doesn't drain the three at the end. And so I looked at my energy and how much I was spending there over making, you know, $30 You know, it wasn't gonna change my life, it didn't really matter. And so I actually set a rule for myself and actually deleted I think DraftKings. But I deleted it cashed out, and I don't sports gamble. And I keep you know, I run across you and some other people. And I'm fascinated by it, because I know there's numbers involved. But for me, I just have a simple rule now is no sports gambling. And that just makes it easy. I don't I don't have to think about it. You know, even with the Super Bowl, I got some inside intel that the Niners got to call they were gonna call tails. I don't know if you could bet on that or not, I didn't even look. And sure enough, they did call tails. I think they were wrong. But even when you get these insider knowledge or concepts, it's like, you know what, I'm not gonna break my rule, because I know that it's going to waste my energy waste my resources, when I'd rather spend that building businesses. So Matthew and Zack as well, I think, I think the rules are really important when it comes to anything.

Zack Price  
Yeah. And you know, Caleb, I do want to point out, like, because I do really strongly believe in Responsible Gambling, is that these apps, the sports books, apps, they do have areas where you can set time limits, you can set deposit limits. And so you, you know, you got to know yourself, and you set these limits, and you won't be able to access the app or deposit more, which I think is really important. You know, it's just like fantasy football, like you're rooting for a guy to get an extra yard even though the game. But yeah, I do think that's really important to know your limits and to put up roadblocks. I, hey, look, I'm listening to the Stacking Habits podcast, I heard a couple episodes ago, you know, a guy wants to hit the gym, the next morning, he's gonna lay his clothes out in the middle of the room. So he has to step over the gym clothes, you know, to the to the fridge, kind of like a little guilt trip of like, Yeah, this is something I got to do. So setting roadblocks setting barriers or little incentives, or like guilt trips, as you might want to call to get yourself to where you want to go, I think is very important, because we're not perfect. And 10 human tendencies, you know, can lead us into difficult situations. So I think it's very important.

Caleb Roth  
Perfect. Well, as we wind things down, Zach, is there anything because you've been doing this for? How long? About 20 years now? In the sports gambling world?

Zack Price  
I've been I've been bitten sports pretty profitably, I would say since about 2001. So yeah, about 23 years coming up on the Masters this year. Tiger Woods is Tiger slam in 2001 was when I first started realizing I have a knack for this. So I have been doing it for a while. I would say again, like stress Responsible Gambling. And you know, just just have fun with it. You know, pick a sport you like Caleb, maybe it's you with golf or college basketball and just have some fun with it. Set your limits. Go in knowing how much you're willing to lose and how much time you're willing to spend. Go in the app setting, set those up, and then just have some fun with it. Enjoy the games.

Caleb Roth  
Sure. Well, Zach, if you could go back 20 years knowing what you know about risk and the rules that you've set up today. What is one thing you wish you could tell 20 years ago, Zach, about risk?

Zack Price  
Well, I said it in the middle of the podcast, I would say chase your dreams, not your losses. But you know, just just everything is a number you can make your calculations start small, have fun. If you see yourself successful with with risk and look, life's a gamble, everything we do from from flipping books, that and golf, playing golf, starting a business. You know, meeting someone at a networking event, decide if you want to follow up, going out on a date and see if you want to get get in a relationship you're not going to get married, you're not going to get you know hitch the next day. Just Just feel things out, build that data, build that experience and then when something good happens in your life, something good pops up on a betting board. You know when to make that bigger bet.

Caleb Roth  
Perfect. So start small track your wins. Make sure you don't put all your eggs in one basket. Well, Zach, thanks for coming on the show. Thanks for diving into risk. Hopefully we gave some good insights on to how to think about risk that people can apply no matter what walk of life they're in. If someone wants to follow up with you or learn more about sports gambling, how can they track you down?

Zack Price  
Yeah, absolutely. Just visit my website zackprice.com. On Twitter I'm zaconomics. I put out some of my picks and talk sports talk gambling, talk live talk business, talk golf, anything you want. My DMS are always open.

Caleb Roth  
Perfect. And as always, this is not investment advice. We don't have lawyers, but if we did, I'm sure they would say You know that responsibly Be careful all those things. So with that we will wind things down. Thanks for being here, Zach. And we will catch everybody next week.

Transcribed by https://otter.ai

Caleb, David, and Matthew

Entrepreneurs & Podcasters

Caleb Roth, David Chung, and Matthew Osborn are the hosts of the Stacking Habits Podcast bringing you new episodes with wordl class guests every week.