Pablo Torre Finds Out - Nate Silver Is Still Gambling with His Reputation

Episode Date: November 21, 2024

Trump won, Silicon Valley is Moneyballing everything, and the worldview of the most famous political nerd on Earth... is eating the world. But Nate Silver still wants to prove people wrong: on what the 2016 and 2024 elections really told us; his falling out with the Left; and how tech billionaires are more irrational than they like to admit. Also: Elon Musk totaling a car, Peter Thiel believing in destiny, and Neymar playing poker.Buy Nate Silver's new book:https://www.penguinrandomhouse.com/books/529280/on-the-edge-by-nate-silver/Subscribe to Silver Bulletin:https://www.natesilver.net/ Hosted on Acast. See acast.com/privacy for more information.

Welcome to Pablo Torre finds out. I am Pablo Torre. And today, we're going to find out what this sound is. This will now be interpreted and has been interpreted for reasons that, again, are predictable and understandable fundamentally, as a broad mandate. It's a narrow mandate. Right after this ad.

You're listening to Draft King's Network. Are you a caffeine person? Media. I'm not as bad as I used to be. But, like, yeah, I mean, I'm in the post-elected. It takes a little extra energy these days. How fun is the haze? It's not fun, really.

But you're on this high, right? You're on this kick for like just really grinding and working hard and you have a lot of adrenaline and you wake up, you know, like, I have a million things to do and there's these polls, new polls I came in, right? So you're excited. And now I'm like, oh, I can actually like fall back asleep, but I'm in like hundreds of hours of sleep deficit. And so, yeah.

Yeah, I mean this as a compliment. And truly I do. I was walking by a spirit Halloween. And I was like, Nate Silver, I think, can relate to the seasonality of this pop-up Halloween store. Absolutely. At a certain point in the calendar, there are lines and there is stress and competition to get in to buy this costume. You are American politics for a certain amount of time that I think you're still in the halo, the outer glow of it sounds like. You have to just own the fact that it is seasonal.

And look, if you're going to do the election, then you're going to have your tourist season, right? The tourist season where you're selling lobster rolls in Maine and in August, there's a lot of demand for lobster rolls. And then Labor Day weekend, you're busiest yet. And you're aware that your life's going to change and become more relaxed after that. But I'm used to the cyclicality of it. So this is Nate Silver in something resembling repose. Bate is 46 years old now, which means that he has been poised. publishing and defending his statistical analysis of presidential elections for 16 years at this point.

But I happened to be old enough to remember when he was publishing and defending statistical analysis of baseball for places like baseball prospectus and Sports Illustrated and ESPN.com. I saw one of my articles, someone had printed it out and had left it in the bathroom stall. And I'm like, I've really made it now, right? Some article about how good Barry Bonds was, I think. The highest compliment. Yeah, absolutely. ...is to be printed out and taken into a toilet.

But Nate wasn't just a moneyball statiner, sort of a writer. Nate saw everything, even more specifically, in terms of odds, in terms of probability, which is why Nate also became a competitive poker player, which we'll discuss. But his rigorous simulations and nuanced descriptions of the likelihood of events and their expected value, all that stuff is not what made his election analysis over at 538, so broadly compelling and so insanely popular, even more to the point. And that is despite the fact that his probabilistic way of thinking is now almost categorically embraced, by the way,

by the richest people on earth now, as you'll see. In fact, I believe that there is a simpler way to describe the business of Nate Silver. I wonder if you object to this characterization, which is that you are fundamentally in the business of being right. I hope I'm in the business of describing probabilistic things. I think I was blessed and cursed in some ways by having its reputation early on. So 2008, you know, 49 in the 50 states we call correctly and then it's 50 out of 50 in 2012. And like, it's just basically random, right?

There was like only a 4% chance that would happen. we had Florida in 2012 back before Florida became a super red DeSantis Haven. You know, our final forecast had like Obama with a 50.05% chance in Florida and he wins it, so therefore you get this reputation. But like, yeah, because I want to like describe the uncertainties in the world. And that's a harder message to sell. When I give a talk or something, right, like it's literally in my bio. They call it 50 out of 50 states, but like it's kind of against my, I guess my whole method and brand.

I've noticed. I've noticed the tension in being the guy who was praised for being in the business of being right. And fundamentally, by the way, you are actively and competitively trying to be right. I am, yeah. But also fighting the framework,

the box of, wait a minute. We need to talk about what probability is. In high school, I did debate team, which if you have seen me on Twitter, you're probably not very surprised by. I have notes about how you use Twitter, Nate, and all of this is adding up. But yeah, you want to prove yourself and you want to say, okay, let's actually bet on this if you're going to like talk all this BS or whatever else.

And like there's just some intrinsic, some intrinsic part of me just wants to compete. Yeah. So all of which is to say that you reject the premise of your job being to be right. But your most inner desire is to want to be right. It's to want to prove people wrong, which is slightly different. Explain the difference. Like if someone else is really wrong about something and I think they have a bad process and they're annoying,

then like I'd probably take more pleasure than that from them being right. You know, it's like, if you catch somebody's like bluff in poker, that's an incredibly satisfying feeling, right? Catching a bluff in a big pot is more satisfying than making a full house or something and winning big pockets. You didn't like really, you know, just the cards went your way, right? And there's some skill and how you get the money in and things like that. But like, but calling us.

out bullshit is like my favorite thing to do basically. Right. Which makes people annoyed. Which makes Twitter the best and truly the worst possible platform to consume you on. 2016 for you was this, it sounds like this moment at which you realized I need to do a better job or at the very least devote a lot of time to articulating what this way of thinking is and who actually believes in it. Because 2016 in terms of Nate is in the business of being right was, but,

publicly rough. So where does your forecast have the race right now? So we show about a three-point lead nationally for Clinton, and she's about a two-to-one favorite. The supporters there at Clinton headquarters, listening intently as the results come in. Some of the people look almost crestfallen. As we were coming into the day, you had your projection above 70% for Hillary Clinton. Where is it right now? I mean, I would look at betting markets, which say that Donald Trump is a narrow favorite to one.

in the Electoral College. CNN can report that Hillary Clinton has called Donald Trump to concede the race. She has called Donald Trump to say that she will not be president. And I'm not sure the exact words, but probably to congratulate a president-elect Donald Trump. I come from a world where literally before I ever made an election forecast, I played poker and built baseball models, right? So for my kind of gambling mindset, we were long on Trump relative to the consensus. We had Trump with a 29, rounded up to 30 if you want, percent chance of winning, and the betting market said 15 percent, and the other model said as little as 1 percent.

So from my point of view, it's like if you were heavy on like Leicester City or something, the year they were 5,000 to one underdogs on the premiership, then like if you were like, oh, they're only 100 to 1 against, like that would be a good bet and it would be a very positive EV wager. But, you know, it's too mainstream. And it's like kind of not how, it's not how most people think obviously. Oh, I mean, even the term EV, a plus EV wage. I do want to spell out expected value, because this is the key to what 2016 was for you, how you made sense of it, how, in fact, it was a success according to this framework,

while also being the opposite to people who don't speak the language of EV. Yeah, an expected value. I mean, I'm sure most of the audience knows, but this is the average outcome you would get over the long run, given the randomness and uncertainty. I mean, election might not literally be random in the same. sense that like a game of craps is. But there are things that are unknowable and are easier to

say after the fact. And by the way, some things are nearly random in 2000 when Al Gore lost by 537 votes or something like that in Florida. And there was a butterfly ballot in Palm Beach County where it was kind of misprinted and people going to the Bacadden and hanging chads and like basically random who won the 2000 election. Some events in this election were kind of random. The fact that like an assassin tried to shoot Trump and got Grace's year. And if he had turned differently, then who knows what would have happened, maybe a very dark turn in American history. But the point is everyone acts like the answers

are so obvious after the fact, right? When it's not always clear. I mean, you know, this year, because it was so close, like I said, this was easier to explain them the most years. Expressing things numerically in probabilities as a sign of humility, and people take it as a sign of hubris instead.

Yes, well, I want to get into that because the key thing you're doing, and I want to translate this to truly the people who don't speak this language fluently at all, is you're talking about, okay, if I'm going to make a bet on Trump winning, given the percentage chance that Nate Silver has outlined for me, right? There is an upside and impact multiplied by the probability, the percentage chance that it would happen.

And what you're saying is... Prevailing betting markets, you're getting 5 to 1 or 6 to 1 odds to bet on Trump, and we thought the real chance is 3 to 1, let's call it, or 2 to 1, right? So 3% of the time you win $600, and then 70% of the time you lose $100. And like, that's actually a very positive, expected value wager. Now, play poker. And you're thrilled to get the money in when you have the right odds. Because over the long run, you're going to win out, right?

And, like, I know, I'm kind of unflappable. I have one home game I play here in New York. And I had a hammer. I had pocket aces. The opponent had pocket kings. And we actually ran the board twice, right? Just a way to, like, hedge your risk. And like, and I somehow lose both boards.

Like a one in 25 chance. This is a fairly big pot. a lot of money. You know, this time I was playing this month. The guy's like, you're so unflapable. You weren't like, you weren't bothered by that. I'm like, that's because I'm winning money in the long run in that situation. And I can't control the way that the dealer like shuffled the cards.

I mean, maybe you don't give as much of a tip. The reason why people keep on demanding who you got is because they want, they want the answer. They want your prediction. And what you're doing all the time is trying to tell people, that's not what I do, actually. Yeah. You are trying to explain people while also giving them, I guess, some sort of satiation about their curiosity that actually what I'm trying to tell you is that the thing my model made is the answer. Here are the odds we've generated. We've run the simulation a zillion times.

And what is so incompatible with maybe this is an American thing, I think it's probably just a human thing, is that that feels like somebody you trying to have his cake you needed to. I mean, it's not so literally this election, the last time we ran the model at, midnight on election day. We ran 80,000 simulations, and Harris won, I think, 40,012 simulations. So, like, a coin actually lands on heads 50.5% of the time. A coin is a little bit biased toward heads. Heads is heavier. And our simulation was, like, more random than a coin flip. So yes, it's true on the one hand. I'm not really saying anything, although it's a guard against, I think, overconfidence on both sides. And it's not always that way. I mean, you know, part of what I think

made the site very compelling in like 2012 is there was a lot of talk about how Romney's making this comeback and Obama's going to lose. Who could forget the era of Mitt Romney was making a comeback? Yeah, and like, I'm like, no, actually the electoral college is pretty good. He's a 90% favorite. So like, that's more intuitive for people. But sometimes the answer

is we just, we don't know, right? We don't know. Polling is very challenging these days. Harris had like better periods and worse periods in the polls. I mean, look, all things consider, this was actually a relative decent election for for the pollsters. Yes.

I mean, you know, people were, if you were not prepared for Trump winning, then you weren't paying attention to it. And by the way, before Harris got in the race, I mean, I think Biden would have lost in a true landslide. This is kind of a quasi landslide where Trump wins all the swing states, gets a popular vote, impressive, but like not, he's going to win by one and a half points, not a, not a Reagan-style landslide. I think against Biden, you would have had devastation up and down the ballot for Democrats.

Right. But the interpretation, even of the result, right? this is about a one and a half percent chance difference. This is about, what is it, maybe 250,000 votes total across Michigan, Wisconsin, Pennsylvania. Like, that's the margin. This will now be interpreted and has been interpreted for reasons that, again, are predictable and understandable fundamentally,

as a broad mandate. And to you, it's actually what? What is your characterization of it, then? It's a narrow mandate. I mean, winning the popular vote for the first time as a Republican since 2004, it is impressive. and the way in which Trump won, where you have big gains among Latino voters,

among Asian American voters. By the way, technically speaking, I think Trump will get 49.8, 49.9.9. So he'll be just a hair short of majority. At the same time, if you are going into a room and 49.9% of people are wearing red hats and 48.4 are wearing blue hats

and 1.5% are wearing Jill Stein hats or something, right? You wouldn't be immediately obvious kind of whether they're more red hats or blue hats in the room. It's a very close election. But I think it's actually in some ways good for Democrats to lose by a tangible amount where they can't just blame the electoral college and they can't just blame turnout, right, where they actually, I think, have to think about a new way forward for the party

because it was a party. It was kind of out of ideas. You know, I do want to broaden this out, though, to this way of thinking because when I think about why probability is hard to sell, I think it is in part because people are demanding a take and you are giving them a process. They're demanding a result. You are giving them a process.

Probability is the art of description, more than it is prediction, frankly. You're trying to create kind of a three-dimensional probabilistic landscape that's accurate, right? But you're not saying kind of which square of that blueprint that you wind up on in a given election. So this map that we got with Trump winning 312 electoral votes with the single most likely map in our simulations

because the outcomes are correlated, that if you beat your polls in one state by two or three points, then you tend to beat them in all the similar states. And so, like, this is like the most prominent point in the landscape, but it's a pretty flat landscape overall, right? Wide-ranging to the horizons of probability, and my job is to, like, describe this reality that if you simulate the world 100,000 times,

you'll wind up in, but lo and behold, you know, I'm going to have what, 20 elections in my lifetime, if I live to 80, hopefully a little bit more than that. But, yeah, I mean, you're not going to actually ever get to, like, the long run here. And so, and so it's kind of this, you have to be very zen about it, because you're never going to, you're kind of, I mean, you truly are gambling in some sense with your reputation where like, you're not going to hit the long run. And so you don't get this thing where you get to play 10,000 poker hands. Well, I think there's a very big difference between what your reputation will be

and how you actually did at generating the best model, right? Like, it's, you are, it's two different things. It is, here it is, the thing you've wanted is, is that. the thing I made, check it out. And that's not actually what you're being graded on, actually. It's whether the thing happened that made your percentage chance, as described, look like, oh, wow, he was right and definitive the entire time while he was also trying to say, this is not about being definitive. Sports fans are more rational by comparison, believe it or not, because people recognize,

like, the intrinsic randomness of, you know, in baseball, you have a line dry, perfectly hit, barrel, right, that just finds the center fielder, right? Or things like that, or a gust of wind knocks the field goal. I mean, it's the people, people get that a little bit more. Sometimes a bird flies in the path of Randy Johnson's basketball. Absolutely. I mean, it is different existentially, right? I mean, in theory, if you, if you, if you knew every American were able to, like, interview them honestly, then I guess you would have some deterministic aspect to it. But we don't have that luxury. Polling, I mean, it's amazing to me that polling isn't worse, actually. Like almost nobody responds to polls, and yet somehow they kind of get sort of, kind of close. And like, that to me is, you know, an underrated feat.

But the other reason I wanted Nate in studio with me today is because I finally read the new book that he wrote this year, titled On the Edge, which turns out to be an almost ethnographic study of the worldview to which he himself subscribes. And now that that worldview is eating the world, basically, which is also why it's crazy that we do not understand. understand it better. I want to make the point here that sports and music and entertainment, and most everything, basically, is downstream of this particular type of culture, which might be why Nate calls this group, the river. The river is the world of, like, deeply skilled analytical, degenerate gamblers, basically,

which happens to be a skill set that is very rewarded in Silicon Valley, in Mall Street, and, of course, if you are actually kind of a proper G gambler, like a poker player. It's people that are the cross between being very analytical and the important part also very, very competitive. And in Nate's ethnography, the river exists in conflict with another group, a group that embodies the old school institution full of social norms, and Nate, a former employee of the New York Times, calls this The Village. The Village is the East Coast progressive, educated, expert. class establishment. So it's like the New York Times and Harvard. When there's a Democrat in the White

House, it's the kind of all the nonprofits and all the different branches of the government and things like that. As opposed to the river, which is very, very individualistic to the point of being contrarian, the village is all about the collective good, right? It's collectivist as opposed to the radically individualist river. But as much as the individualistic and contrarian river likes to define itself in opposition to the clustered groupthink of the village. It is worth noting here to me that the most influential real-life street in Silicon Valley

is itself an insulated and almost incestuous cluster, a kind of literal village, actually. Because what Wall Street is to the stock market, Sand Hill Road, is to the ingenious racket known as venture capital,

which is dominated, it turns out, by like five or so VC funds. And the, gain here is not the stock market. It is to very patiently fund an array of bets instead, an array of bets on privately held high-growth startups. And so even though the odds of any given startup becoming a unicorn are extremely low, that individual improbability arrayed this way makes it so that it doesn't even really matter. The basic Silicon Valley Venture Capital equation is that if you invest in enough businesses that have

a tangible shot to return 1,000 times your investment, then that's a really positive set of investments you're making over the long run. And on the one hand, the math is great, where, like, number one, if you are able to be long-term and make enough bets, to invest in things that can give you a 100 X or 1,000-X return is like a pretty good idea if you're patient enough to see that through. Right, right. They also, though, like, they have these very profound, like, recruitment advantages

where, like, the best talent anywhere in the world comes to Silicon Valley, and they get kind of the pick of the litter. It's as though in the NBA if the team that won the championship got the number one pick every year instead of the reverse, right? But what VCs have determined,

and it sounds like in your book, you did some modeling of your own to sort of establish how advantageous it is to be a venture capitalist right now who is doing this at the highest level, because it sounds like early stage VC, as you describe it, is not even that quantitative. Like, it's not even so much a mathematical secret

that Silicon Valley has. It is this larger understanding of, we make these bets with this long a timeline that we grant ourselves, and it's going to work out to what kind of advantage? There is, I think, pretty solid evidence that some of these firms routinely have a 20% annual return on investment and 20% compounding interest or profit.

I mean, they grow bigger and bigger. And like, you know, I'm kind of unapologetically like a market sky, right? I think the capitalist system has been good on net for society. But like, you know, at some point there has to be some limit or I don't know, right? But like you buy your fifth house and you buy, I don't know, you private jet. And like you have too much money at some point. Yeah. So Sand Hill Road, for those who don't know, is the, it's the street where all of these people are.

Right. I mean, you describe it. I didn't appreciate the fact that there is the one good restaurant at the Rosewood Hotel. Everybody goes. It is a small town. They're all syndicating into each other's deals. So it's also kind of like an isolated place, right? It's not somewhere like New York where you get this whole different cross-section of people or London or something like that, right?

It's like... There's not a subway on Sand Hill Road. No, it's kind of aloof. And you go and work really hard. But like, it's not the most. exciting place either, right? And like 30% of like all the unicorn startups in the world are in this one small patch of land. It's kind of, kind of insane. But I do want to zoom back out on the map here, because if you are thinking of which specific individuals, maybe, which big names might personify

the river and the world of probability, I think you might be imagining some of the most rich and powerful, and for my money, odious billionaires, like Elon Musk or Peter Thiel. And we should mention here that Nate is a part-time consultant for Polly Market, which recently became famous for letting people bet on the election, a company, a website that Teal's company, his VC fund, has invested in. But Nate did not know these billionaires personally, it turns out, before writing the book. And he used his access to them to observe something interesting. I thought, because Musk and Teal, who both happened to work as executives of PayPal in the 2000s,

are not as representative of Nate's probabilistic worldview as I thought. Part of what your book does for me, which I did not have prior to reading it, was a crystallization of the ways in which Elon and Peter Thiel and lots of billionaires who you talk to in the book, by the way, a tremendous access. I think because, as you say, because they detect the, that you were one of them, in a sense, in this way of thinking, you actually subdivide this is how this person thinks, how Elon thinks, and this is how Peter Thiel thinks. And they're not the same thing.

Right. And so Elon, just to stick with him for a second, in some ways he is the most famous tech person, quant person. You'd presume he is the ultimate example of what you call the river. But what is he to you? I mean, first of all, he has the highest risk tolerance of, like, anybody ever, except maybe Sam Macbin-free. But, like, Elon, there's an anecdote in the Walter Isaacson biography of Elon where when he plays poker, he'll literally just go all in every hand until he either goes broke or he wins everybody's chips. And, like, that's the way that he lives his life.

And, like, and that tracks as a psychological scouting report. SpaceX and Tesla were both considered long-shot ventures, right? Open AI, which he helped to co-found, was considered maybe a long-shot venture, no clear profit model, although I guess they're still losing money, but obviously a very impressive business and like Starlink. So, I mean, at some point you have to give credit for, like, his competitive streak crossed with a contrarian streak.

I'm sure he's a fairly high IQ guy. I don't think he's, like, analytical in the sense that, like, a poker player is exactly. but just being unaligned with the rest of society. And, like, I mean, you know, if you read that biography, the Bolter-Ives some book, the whole thesis is basically that you can't get the good without the bad. All the things that make Elon kind of crazy and annoying are part of the same personality traits that also lead him to be a very successful and impressive founder

and to see things as a visionary in different ways. And you can't seem to, like, separate those out exactly. But is he probabilistic in the way that you are trying to articulate? I think he, I'm sure, mentally understands probability, but I don't think he deep down feels a probability like a poker player would, right? And in fact, if you talk to Peter Thiel about Elon and they're kind of frenemies,

and by the way, I did not talk to Elon, I did talk to Peter and a lot of other people in the book. Yeah. He's like, yeah, Elon just ignored the probabilities, right? It's like, oh, there are all these barriers to having a successful rocket ship company. If you do the math, it's like, okay, there's a 50% chance I trip over every hurdle,

and by the way, Elon almost thought he was ruined, right? You know, the fourth SpaceX test finally worked. Without that, no more funding, and he probably has a much more minor role in society. But he's like, I don't care about the math, right? Like, I think I have a good idea. I see no insurmountable barriers, and therefore I'm just going to kind of charge a head forward. And what Peter Thiel thinks is that, like, now that everyone is so moneyball about everything and so math-driven, the edges that you have are actually from the softer skills.

potentially, from the determination, from understanding where the models are wrong. Now that moneyball is the conventional wisdom, then being a contrarian might actually mean being more deterministic and being really stubborn about one idea and going all in on that idea. Right. There's a part of your book, which I do want to just refer to here, because it is a story, and it's Peter Thiel talking about Elon, and it's a story he tells you about how they were in a car together. Yeah, so Elon sold his first company, made like $15 million or something like that, and spent $1 million on like a McLaren. Basically, it could almost be like an F1 car, right?

And so he and Peter are founding what eventually would be called PayPal. They're burning money really fast. They're on their way to a pitch meeting with Michael Moritz, who was at Sequoia Capital, one of the legendary kind of Midas Touch investors in Silicon Valley. And he learns like, hey, Peter, watch this. And like, he floors accelerator and the car like literally, spins out of control on an embankment and, like, is helicoptering up in the air, and somehow it, it lands on its four wheels, and they're okay, and, like, and they hitchhike their way to the

meeting. But, yeah, if that car lands differently, then these two people might be severely injured, and all of history is different. And so, like, I, and I asked Peter, if you simulated the world a thousand times, how often do you think you'd be in a position like this, right? And, like, most people, you ask him that question, like, I asked Mark Cuban that question. He's like, oh, I'm very lucky, of course, you know, things back. And that's like the obvious, like, politically correct answer. But like Peter Thiel objected. He's like, look, either the world is deterministic, in which case it's predestined,

and that's a 100% chance. Or then it doesn't really even make any sense that question, right? But he's someone like, I think actually believes in predestiny and believes in fate and is a deeply religious person, I think. And that I sort of had read about here and there, but I didn't appreciate that. What is his philosophy? What's his worldview? you if you were to describe it because he too despite being again this ultimate example of silicon valley

is not quite the poker player archetype that again you belong to that is so much of the rest of his industry no he is idly more kind of risk averse and i think kind of wanting to protect his downside outcomes a little bit more right so he's kind of the yin and the yang to to elon you know in some You know, look, I know Nick Denton from Gawker and we're friends, right? But, like, for Peter Thiel to spend hundreds of millions of dollars trying to basically bankrupt Gawker is, like, not like a plus expected value investment. Teal confirmed last week that he secretly spent about $10 million bankrolling lawsuits against Gawker. And one of them, a jury awarded retired pro wrestler Hulk Hogan, $140 million. This dispute began in 2007 when a garland.

Walker website out at the PayPal co-founder as a gay man. Teal told the New York Times, Gawker is a terrible bully. He called the lawsuits, one of the, quote, greater philanthropic things that I've done. It's a little bit crazy to, like, say, I'm just going to ruin this guy's life

and then have this, like, kind of, like, called shot where it actually works out, and Gawker made all types of problems with, you know, the way the jury testimony went and things like that. But he uses Hulk Hogan to destroy a media company. that's a different skill that's not the impulsive i guess Elon has long-range planning facilities obviously right but like it's there's a meticulousness that's very unusual relative to everybody including other people in the river but like yeah he is not like the

a probabilistic gambler he is somebody who like believes if i see the world in clear enough terms and things that might seem unlikely are actually not just likely but kind of predestined to occur most of these people are the irony is like they're not super duper like rational necessarily that is a big thing i found out in your book it is a book about fundamentally a rigorous and quantitative and probabilistic rational way of thinking and it's populated by people the biggest winners arguably who are deeply not rational at times No, and even in poker where the way you play out of poker hand is kind of in some ways

a canonical, like expected value rational activity. But like these are people that are very, very skilled and very, very smart in quantitative ways and like they could make a lot more money by working for a hedge fund or working in tech or things like that, right? And instead they kind of choose to have this like

poker lifestyle, which it's great when you win a tournament. It's great when you have a great night in a cash game. But like it's a grind. most of the time, right? Most of the time, 85% of the time you enter a tournament, you lose without any cash prize, and you're up until midnight for days in a row,

and then you take a bad beat. So they're kind of all deeply irrational in some sense, but they happen to be like narrowly rational in these domains that are now financially rewarded. When I look around finance now and the people who actually have power, right? So part of what's funny and dark about all of this is that everybody wants to feel like the underdog.

everybody wants to be David and so you have a lot of Goliaths now in Silicon Valley who started off as underdogs that are not wanting to wear the actual responsibility that comes with winning with winning the game a lot of the people in the book

are people who had so I call it it's like the mezzanine of privilege where you're in the stadium right most of them are white or Asian men right who don't have anything that prevents them from being at the table, right? So they're like, they're in the stadium, they're in the arena, but they're not the people who are born on, on third base, right? They have

to, like, hustle a little bit, and they usually had some, like, traumatizing event in childhood. I mean, Jeff Bezos was adopted, and Peter Thiel is gay and closeted, and Elon Musk had this very strange relationship from his father, right? A lot of them were kind of, like, bullied as kids. Another through line is definitely being made fun of, and using that. to fuel a larger goal of conquest? So they always feel like they're the underdog, and they will have that grievance for the rest of their life, and having a chip on your shoulder, having that grievance,

that gives you infinite fuel, basically. It's kind of crazy. But yeah, like I said, I mean, the irony of the book is these people are on some level deeply irrational, but they happen to be irrational in ways that leads them to make loads of money. When it comes to humility, as this concept, right? So there is a humility

to wanting to operate on the terms of probability and this is presented by you as a contrast to hubris, actually, that people often get it wrong, that there is deep humility. I do think, though, it's part of like the political messaging problem here

as I contemplate, like, but why isn't this really cutting through across the sort of cultural aisle here? It's because there is deep conviction in the way that you don't know something such that it feels like you are saying, I know something. I guess you do, I mean, you know, in

the sense that like, you know, we had our election forecast at 50-50, I wrote something in the New York Times about having a gut instinct for Trump and like, I tell people to ignore the gut instinct, that's the whole point, but people kind of, you know, I guess it worked out well. But like, but like literally,

I thought it was 50-50, which means that if you're willing to like let me bet on Trump or Harris, at like two to one odds, and I would have, like, booked action on both sides of the bet. So, like, saying 50-50 is not saying nothing. It's saying that if you're overconfident, then literally I bet on that, right? But it was, I think, particularly dissatisfying to people. And people, like, always wanted to believe that I had some, like, hidden belief that, like,

was somehow separate from the model. Well, listen, I do want to ask you why people in this category, in what you call the river, why they seem to like Donald Trump. What's your diagnosis of that kinship? I think it's a bunch of factors. Some of it is a pure economic calculation where they don't like Lena Kahn at the FTC. They don't like the high taxes that you have in California.

They think there's some pay to play where you'll be treated favorably by Trump if you're his buddy, right? If you look at Elon and when he had a falling out with Democrats, the first incident was actually when Biden would not involve to their EV initiatives because Tesla was not unionized in the same way. Infamously, infamously conspicuous that he wouldn't invite Elon. Yeah, so it's half pure economic calculation. And then half it is they get red-pilled on other stuff, right?

I think, you know, to have this kind of very woke, I guess I'll use that term, workforce in Silicon Valley when the message is, hey, we don't like these, you know, these white male capitalists, they're bad. I mean, they noticed that after some period of time. And it's, you know, for some people, it was COVID. For some people, it's trans rights issues and things like that. But, like, it's really easy to kind of fall on this trap and kind of get red pilled, I think. And it feels a little bit naughty, right?

It feels kind of naughty when, like, when you're told, oh, orange man bad, you're not allowed to praise him. And then you start doing it. And it's kind of, I'm sure it feels fun. Like, if I were not, how do I put this? I'm going to get myself in trouble. if I were not a politically knowledgeable person, I could see myself being, oh, yeah, Trump, not that bad, right? But you have to ignore January 6th,

and you have to ignore terrorists and a lot of things. But, like, but, you know, people are not these perfectly rational decision makers when it comes to politics, and I can understand why people in that world and other people voted for Trump. And I do think that, like, the liberal order is very, like, self-serving in lots of ways. I could give examples if I want

What does the liberal order mean? So it's this other community I call The Village, so the Village is basically the establishment. It's government, it's the nonprofit sector and things like that, right? So look, I think you know, one of the issues where I kind of had like a something of a falling out with the left

is over COVID where I thought that we had too many lockdowns and school closures for too long. I'm pro-vaccine and where I'm asked if you want, but I thought that was harmful a net to society. But those lockdowns are quite self-serving, right? If you're a member of like the laptop class and you can work in your comfortable apartment or home and ordered door dash and you zoom and all that. But a lot of like working class Hispanic people and black people are essential workers, right, and or have small businesses that are being greatly impacted negatively

by these closures and in schools. You know, students in these rich districts that had parents at home who can attend to their child's learning, right, and are not working remotely during the pandemic, like, they did fine, whereas in working class districts, the students who, like, lost a year of school, just kind of permanently, like, lost, you know, a year of school. And, like, so, so I do think that, like, like, Trump doesn't articulate the reasons correctly. No. No, he does, right, but, like. No, he's not talking about how, look, public health is the art of basically, I think you call it noble lying. Yeah. Of withholding information from a population that you don't necessarily trust to behave if given the truth. And that is such an, again, at this moment,

has there ever been a more unpopular ethos than we need to lie to the public? No, people don't play. I mean, this is one thing that, like, poker players are good at is they are concerned about, like, the long run, right? They're like, if I, if I bluff in the situation, then in the long run, I'm going to bluff too often, and therefore I start losing money. And they are, I don't know if you want to get to like a poker strategy session, but like people, but they are thinking about like, what's the long-term equilibrium

when everybody is trying to compete and play their best game, then like, and so you're trying to avoid the short-term noble lies that like wind up like catching up with you. Trump to you, River, village, where is he on the map? A friend of mine says he's from the wilderness

like neither of these camps. I mean, Trump is a very weird figure in that, on the one hand, um, he understands risk, maybe not in a deeply analytical way, right? He also was in the casino business and went bankrupt to the casino business, which is actually pretty hard to do. It's a pretty hard to do, right, when you kind of have a legal license to print money.

Right. But it was about, what was it about the loans, right? The loans. So, you know, the Trump-Tashma Hall, when it was built in Atlantic City was actually like a beautiful revolutionary casino. At first, yes. You can't fault him and it became a piece of a bit later. but like you can't fault him for like lacking a vision of like this great product but like yeah he took out like loans at like a 13% interest rate and if you know anything about the casino business you know it's extremely capital intensive like literally the most expensive developments in the world are like airports and casino complexes literally right but it pays off over a 20 to 40 year time horizon because you do have a license from the government to guarantee that you make money on gaming operations and when people are there have

half their revenues are from restaurants, drinks, hotels, etc. So it's a great investment if you're in the long term, but not if you're taking out loans at like a 13% rate. And like Trump clearly wanted to be part of the village, right? I mean, he was, I mean, talk about grievance. Talk about grievance, right? I mean, if you read the stories and people debate the sense, which it's true, but like he felt agree that he was being made fun of at the White House correspondence.

Yes, which is the village made manifest. It's the, I mean, it's maybe the worst place I've ever been. Oh, yeah, sure. I went one year. Once or twice, maybe, I think just once, right? And so, like, he, but he, Trump feels aggrieved and, and, and, look, there are some things you can say. I mean, I think Trump understands bargaining. But he's too impulsive to be a reverian.

There is one question here that I need to ask you, which is simply about, this is, this is what Peter Thiel was alluding to, I think, some of it, right? It was that we know who. who has won. You know, not really the presidency, but also the way of thinking. It's clear that the probabilistic way of thinking, the quantitative way of thinking, moneyball won. And that is a separate question from has it made the things we love better? Yep.

I wonder how much you grapple with that as somebody who is perhaps instrumental in the way that this movement has been popularized. I mean, in the sports world, I think it's made basketball better. and football better and baseball worse, probably, just from an aesthetic standpoint. You like the threes. You like the three-pointers? I like the three-true outcomes coming to basketball.

Go watch the 1980s basketball game where you have like, trust me, the athleticism is much more on display now. Look, the fact that, like, we have all these elections come down to basically 50-50, right? And it's so kind of ruthlessly efficient. You don't get these like landslides anymore. It's kind of so predictable that 85% of the same,

states, you know it's where they're going to vote every election. And so, so like, so one problem with money ball type thinking is that like, it's like easy to solve for like the short term equilibrium, but like hard to know kind of what's best in the long term, right? And generally speaking, Democrats of the party that is more skilled at like the analytics and building a campaign tools. And, you know, I kind of wonder all these campaigns where they just, I'm a bomb went by a big margin in 2008, right? But the best are kind of like just getting over the finish line. And like, And, like, you know, I think there's been like kind of a lack of long-term vision in the party, which you can tie sometimes to being, to having all these short-term metrics that you can optimize, right?

And all of this, in the end, brings Nate Silver back to the poker table. Yes, he's still writing about politics over at Silver Bulletin, his substack. And he's still in the de facto business of being right, as much as he may f*** that. And he's also still the worst and most impulsive version. of himself over on Twitter, where he's trying to call out bull-shund or whatever it is that he, you know, justified it as, as we discussed before. But Nate also finished 87th at the 2023 World Series of Poker main event, which does sound, you know, pretty bad, 87th, until you realize that there were more than 10,000 competitors

there. And look, I have moderated plenty of panels at the Sloan Sports Analytics Conference. I've written about trusting all sorts of processes, but I am not any kind of poker expert. And so when I see a YouTube video, for instance, where the image screams, quote, Nate Silver Bluffs with dirty diaper, three exclamation points, I am a bit confused.

End of the muck. What a remarkable runout that was for Silver. The pair on the turn, the fourth spade, and he manages to get it through. Savage, savage bluff by silver. Oh my God. Oh, my goodness. In so many words, Nate had a horrible hand,

but his opponent did not call him on his bull-h-h-t. But the good news for that opponent, I suppose, is that that guy can now relate to another one of Nate's opponents, baby. From the World Series of Poker in 2022, an opponent by the name of Namar. Yeah him What's your scouting report on Namar?

What happened in that In that game? Too aggressive We were also playing like Limit Holdem And in Limit Holdem It's hard to get people to fold I play against

So you wrecked Namar Is what I was doing Yeah I played against Ryan Garcia The boxer Oh yeah Yeah Who was actually pretty good

When you happen to be playing Against like a random celebrity In poker they don't give a fuck really because they don't have any, like, ego loss. And so, like, they're very aggressive, usually and have a lot of heart as a term that you'd use. And, like, that actually goes a long way

in these giant poker tournaments where you get to the World Trade's Poker or I made day six a couple years ago. And, like, people get scared, and they're scared of losing. And these guys tend to have... They're aggressive and they have heart. And, like, in poker, if you're bad and aggressive, it's actually still pretty hard to play against.

If you're bad and weak passive, then you're guaranteed to lose money and everyone wants to at your table, right? But if you're aggressive and unpredictably aggressive, then you're not so far actually from being a dangerous opponent. There is a thing in your book that I also want to ask you about, which is that you say at a certain point, because again, you are a probabilistic thinker, of course.

You write that you would not take a one in six chance of dying in exchange for a billion dollars, but that you would take a one in 38 chance of dying in exchange for much less than a billion dollars. That second bet of one in 38, you would actually... One and three to... One and three, it's not that high. it's pretty low yeah

how much do I say I would take yeah I'm 138 I'd fade that risk although yeah would your partner Nate would he have anything to say about this he would not be happy he's like what are you doing no he'd be very unhappy about that hopefully he would

but no I mean so if you look you know there is something called the statistical value or value of a statistical life which is that it's set at 10 million dollars right so like if you're trying to say, okay, we are going to, like, clean this asbestos out of this building at a cost of $100 million, but it'll save 20 lives, then the government would say it's cost-effective, right? And so people get really annoyed by this because you're like, how can you put a value on human life?

Yeah. But where it comes from is how people value their own life. If you're taking, like, a dangerous job, if you're working on, like, logging, all these things in Alaska, like being a logger or like a lobster boat fisherman in Alaska, right, all these dangerous jobs, people are quite a lot. aware of the risks they present and like how much additional compensation do they demand for those jobs or how much are you willing to pay for like safety features in a car like airbags in a car that reduce your risk of dying by X small percentage right and if you look at how people behave

in the real world they value their own lives at about about 10 million dollars right I put I value my life more than that actually I wouldn't gamble for for 10 million but there's some number at which I I would yeah so one in 38 what you're saying is you like your chances. I play the odds. Yeah. Nate Silver, I really enjoyed this. And the greatest compliment, I guess,

I can give you at the very end here, is that I genuinely on that question, I hope you are right. I appreciate that, man. Yeah. I don't want to, I don't want to increase people a way to actualize this bet, right? It's an important disclaimer.

Yeah. Cool, man. Of course. Thank you, Nate. Absolutely. This has been Pablo Torre finds out. a Metal Arc Media production. And I'll talk to you next time.