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"I'd like to get you thinking probabilistically."

— Nate Silver

Book review: Nate Silver on life in The River

The fifth and final card dealt in a hand of Texas Hold’em is called "the river" — an homage to poker’s origins on Mississippi riverboats, where players caught cheating would soon find themselves in the Mississippi.

In On the Edge: The Art of Risking Everything, Nate Silver adopts the term to describe a way of life.

Anyone whose profession involves making calculated bets lives in the The River and anyone who thinks in probabilities has at least a foot in it.

On the Edge is Silver’s anthropological study of the world’s risk-takers ("Riverians," he anoints them) and, in many ways, a love letter to them as well: "risk-takers are…the ones who move society forward."

But Silver is no starry-eyed honeymooner. 

A Riverian himself, he’s been living among the world’s biggest risk-takers for long enough to be fully cognizant of their flaws.

Sam Bankman-Fried, for example, took Riverian thinking to catastrophic extremes; Elon Musk and Peter Thiel have muddied The River with identity politics; and once-Riverian venture capitalists have skewed the investing game so far in their favor that they no longer take enough risk to be considered risk-takers.

Still, after reading On the Edge, I'm sure you'll agree with Silver that the world needs more risk-takers, not fewer.

Silver wants you to be one of them — to a degree.

In On the Edge, he explains how to bluff in poker, win at slots and trade like a hedge fund manager. 

But far from recommending these activities, his Riverian perspective is much more likely to put you off gambling than it is to inspire you to take it up.

Mostly that’s because Silver effectively demonstrates that professional gambling is a more-than-full-time job with razor-thin margins and wild swings of fortune. 

Even worse, betting as an amateur gambler in poker terms is "negative EV" — and therefore for entertainment purposes only.

EV stands for "expected value:" a bet’s payoff multiplied by the probability that the bet pays off (ie, a 30% chance to win $100 has an EV of $30).

But learning how to bet is not the reason to read On the Edge.

Instead, it’s learning how to live. 

In a world of ever-growing uncertainty where risk-taking feels increasingly unavoidable, learning to think in probabilities will 1) make you a better risk taker and 2) make the world more comprehensible to you.

To that end, nowhere in On the Edge does Silver tell you what to think — only how to think.

"In poker," Silver explains, "you have to be comfortable turning your subjective feelings into probabilities and acting on them."

In life, too, I think.

If you’re a poker player, that type of life advice will immediately make sense to you (as will everything else Silver writes).

If you’re not a poker player, this is the book to read so that it does.

Much of On the Edge is about poker and at first glance it might seem like too much.

Silver writes about poker the way Melville did about whales — exhaustively (he spends 14 pages on a single, disputed hand of Texas Hold’em, for example).

He’s self-aware in his poker fixation and concerned that it might lose some readers along the way, so he invites them to skip ahead numerous times.

That is his only advice you should ignore. 

Silver is an engaging writer (and a much easier read than Melville), so the pages of On the Edge melt away, making it feel much shorter than its 572-page length.

(My editor, however, wouldn't have let him start so many sentences with "and.")

It’s partly for that reason that, despite his multiple invitations to skip a few, I read every word.

I’m glad I did because every one of his poker stories has a worthwhile payoff and every Riverian he profiles has something to teach us.

I was tempted, for example, to skip the section on Sam Bankman-Fried, because we've all had more than enough of that guy. 

But Silver makes even that well-trodden story seem fresh by framing it from a gambler's perspective: SBF, he explains, thought the "Kelly criterion" for bet sizing (which every gambler thinks is far too aggressive) is far too conservative.

That single thought led him to run FTX with a deliberately sky-high probability of failure: "If FTX wasn't probably going to go bankrupt," Silver writes, "he [thought he] wasn't optimizing his EV enough."

The lesson from SBF’s downfall is that Riverian thinking taken to its logical extremes can be catastrophic. 

But pushing an idea to its limits can be a good way to demonstrate its merits, even if the extreme version of the idea itself proves disastrous — and that’s what Silver does here.

We don't want everyone constantly taking long-shot wagers, he explains, but we do want some people who are willing to risk everything.

He also wants everyone to take better risks.

"Society would generally be better off," he writes, "if people understood the nature of expected value and specifically the importance of low probability, high-impact events."

In other words, if everyone thought a little bit more like the people in The River, the world would be a better place.

It might be a nicer place, too, because being a Riverian requires "strategic empathy" and the ability to "look for flaws in people's incentives rather than their intelligence."

Surely we’d all get along better if we did.

On a recent podcast, Silver noted that if he meets someone playing poker, there's an 80% chance he’ll get along with them.

For Silver, everything — people included! — can be understood in terms of probabilities. 

After reading his book you’ll probably think so, too.

(See what I did there?)

Silver’s stated goal is "to get you thinking probabilistically" and if you read On the Edge, I’m sure he will have accomplished it in many, many cases. 

If so, that should be great news, not just for Silver’s readers, but for everyone — because "risk-takers are the ones who move society forward" and probabilistic thinking will "maximize humanity's chance of coming out ahead."

Silver believes the world needs more probabilistic-thinking risk-takers — and I am 100% sure he’s right.

(OK, fine: 99.99% sure.)

— Byron Gilliam

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