For: brooklyn From: Another Brookly Resident

Here is some free advice:

1. Read the good blackjack and general gambling books, e.g. those by Stanford Wong, Arnold Snyder, Don Schlesinger, "Bootlegger," Norm Wattenberger, Peter Griffin, John Bukofsky, Ed Thorp, Julian Braun, Olaf Vancura and Ken Fuchs, Lance Humble and Carl Cooper, George C., Kevin Blackwood, Allan Wilson, Rick Blaine, Dave Stann, Ken Uston and Richard Epstein and Lawrence Revere. This list is not exhaustive.

Notes: Read the most recent editions. Basic strategies and count strategies in the books by Thorp, Epstein and Wilson are obsolete, as are Revere's count strategies. Ignore the material on betting in Braun's book; he did not write it. The book by Humble and Cooper has correct basic and count strategies, but some non-scientific material. The book by Vancura and Fuchs has basic strategy for multiple deck without double after split. Most multiple deck games have DAS. The K-O count presented in this book is good. It is probably the second most popular system in use today.

2. Do not read books with incorrect basic strategies or that advise use of progressive betting systems.

3. Use QFIT's software. www.qfit.com

4. Play for fun, not to make a living or to get rich.
Disclosure: I am a low stakes recreational player.

Advice for a 19-year-old who wants to make a lot of money, but who is willing to do it s-l-o-w-l-y (for consultation with your financial advisor):

Put your serious money into an IRA, not blackjack. There is no minimum age. All you need is income from employment of some type. A student working part time can open an IRA if he has earned enough money during the year to open a certificate of deposit or a brokerage account. Many mutual funds can be bought with as little as $500, $250, or in some cases $100, but look for annual fees. I think Charles Schwab and T.D. Ameritrade do not charge an annual fee for an IRA. The maximum IRA contribution for a year is the lesser of (1) your income from employment for the year or (2) $5,000.00. Start maximizing your IRA contribution, i.e. $5,000.00, and your 401(k) contribution when you get your first full time job. The historical rate of return on the S&P 500, with dividends reinvested, has been around 10.3% since the 1920s. Never use IRA or 401(k) money to finance gambling. Work with Excel and a financial calculator to see what, e.g. $2,000 and $5,000 per year over a career of 40+ years can grow to at various reasonable rates of return. Only FDIC insured bank account are guaranteed by the federal government. Stocks and mutual funds are not guaranteed against shrinkage in value.

Are you just cutting and pasting nonsense. S&P didn't even start until the 50's and the historical return is now much lower, even if you go all the way back to lower the impact of the 2008 crash.

If you use DJIA, you can go back to 1896 and historical return over 113 years is under 5%, and that is not adjusted for inflation.

Something to chew on.

Not to mention he won't be able to touch the money for 45 years.

I heartily agree with your assessment. This guy must make his living as some financial prima donna with a Phd spewing out all types of bad advice to the gullible and misinformed. I would take Dan Harrington
's advice regarding financial management over and above anyone. At least you can have confidence he knows what he talks about and he won't wave a Phd in your face either.

You are discrediting some of the pioneers in 21. Basic Strategy written in Thorp (1962) Epstein (1977) Wilson (1965,1970) Revere (1971,1973) are still the foundations of THE GAME and published today. Count strategies written in these books are the same being used today. FYI Braun's Plus Minus, Dubner's Hi Low (1963), Thorp's Simple Point Count, Revere's Plus Minus, Wong's Hi Low, have all the same values. Outdated? Obsolete? I think that even Stanford Wong would take offense to that. A simple Hi-Lo system like that gives a betting correlation of .96 and that is hard to beat with such simplicity. Wong says that you can make money 4x (?) faster at 21 than stocks. BAD ADVICE all the way around dude.

Franz Joseph is a long time poster who has earned and enjoys a very respected reputation.

that people should fund their retirement by playing blackjack and investing their guaranteed winnings (that's why there are millions of professionals totaling supporting themselves by BJ)and invest the proceeds in CD's and Treasury bills? But they don't just do this with card counting, they travel the world looking for dealers who flash their hole card and can track Aces so they always fall on their spot. Don't forget the dice setting in craps.

IRAs are not the devil's creation. It's a forced way of saving for retirement and the sooner you start, the better. Maybe you guys will at least concede that workers should invest in their company's 401k, at least up to the company match. That's a GUARANTEED 100% return. Is that an advantage play?

I am not discrediting Thorp, Braun, Wilson, Revere or Epstein. I recommend that brooklyn read their books!

I am familiar with the history of the Hi-Low system and its evolution. Its presentation in Thorp's book, the 1966 edition, is for single deck games. Wilson's point count is: A = +4, X = +1 and 2 thru 9 = -1. Wilson also has excellent material on the inefficacy of progressive betting systems. Epstein (1977 edition) provides indices for the Griffin-1 count, which is similar to Hi-Opt I. He also provides a lot of mathematical material, like Peter Griffin. Revere was the first to print Basic Strategy essentially as we know it today for 1 deck and 4+ decks, based on Braun's computer work. He provides a simplified level 1 point count and the level 2 Revere Point Count. All these books have counting systems for single deck, but not multiple deck games.

As for Wong taking offense to my post: I recommend his books, without any caveat. Why would he take offense?

Traditional IRA contributions are tax deductible unless the contributor is an active participant in an employer-sponsored qualified retirement (or his spouse is) and he has income above a certain level. Distributions are taxable. Roth IRA contributions are not deductible, but distributions are income tax-free. All IRAs have tax-free growth prior to distribution. IRAs are protected against creditors in most states. Obviously, the securities markets are risky, but one can invest all or a portion of his IRA in FDIC-insured certificates of deposit. Rates are low now, but I had my IRA in a 10 year CD with an effective annual yield of 11.8%, that allowed additional contributions receiving the same interest rate from 1985 to 1995. Penalties for early distributions are the only real downside of IRAs.

I started a new job with a 401(k) plan shortly before the above-referenced CD matured. This company had a number of 20-somethings, who were only deferring 3% of their pay to the plan to get the maximum matching contribution. The plan has stock funds, bond funds and a fixed fund paying a little more than bank CDs but only on a 1 year guaranteed basis. I started off allocating all my deferrals, the 15% maximum, to the fixed fund. I look at least 10 years younger than my age and the 20-somethings had no idea that I was making the maximum deferral. They were cheering each day that the NASDAQ rose. They told me I was crazy for putting all my deferrals in the fixed account. I was told the same thing by 40-somethings and 50-somethings, but with two differences. They used more diplomatic language. They showed me tables and charts showing historical long-term growth rates of stocks, bonds, etc. I became a 60%-40% equity to debt ratio allocator.

The S&P goes back to 1923, but was changed to its current form in 1957. See the links for S&P 500, with dividends reinvested, as in SPDR or an index fund, long term returns:

http://en.wikipedia.org/wiki/S&P_500#History
http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm
http://www.istockanalyst.com/article/viewarticle/articleid/2803347

See my responses to BGTD and Thetahoescout.

Please see my follow-up posts on blackjack books, IRAs, stocks and investment allocation (only one brief sentence on the last, but crucial issue).

"I can't believe you really said that. You are discrediting some of the pioneers in 21."

Poster Franz Joseph recommended the books of those pioneers. You are saying that this is akin to ..discrediting them ?!

Here's Franz Joseph's remarks about those pioneers' work:

Basic strategies and count strategies in the books by Thorp, Epstein and Wilson are obsolete, as are Revere's count strategies. Ignore the material on betting in Braun's book; he did not write it.

When one points out that (some of) the work of a pioneer has been refined and improved, through the years, where's the discrediting in that? The Four Horsemen drew up a BS which has been indeed improved upon --yet their place in BJ history is assured. Progress in technology does not in any way negate the contribution of pioneers. The Four Horsemene did it with calculators, for christ's sakes!

There really is a reading comprehension problem on the internet. People kept telling me about it but I wouldn't believe them. Perhaps something to do with screen glare.

Well said, reveremAn. The comments, so far, in this thread about the worth of Franz Jodeph's advice (and retirement planning in general) are pretty much arbitrary judgement calls.

Revere, Braun, and Griffin all deal with multiple deck counting, which is to day that they go into true count conversion. I am not sure what you are referring to you state that their books do not have counting systems for multiple deck games.

Franz Joseph:

I am familiar with the history of the Hi-Low system and its evolution. Its presentation in Thorp's book, the 1966 edition, is for single deck games. Wilson's point count is: A = +4, X = +1 and 2 thru 9 = -1. Wilson also has excellent material on the inefficacy of progressive betting systems. Epstein (1977 edition) provides indices for the Griffin-1 count, which is similar to Hi-Opt I. He also provides a lot of mathematical material, like Peter Griffin. Revere was the first to print Basic Strategy essentially as we know it today for 1 deck and 4+ decks, based on Braun's computer work. He provides a simplified level 1 point count and the level 2 Revere Point Count. All these books have counting systems for single deck, but not multiple deck games.

adhoc:

Revere, Braun, and Griffin all deal with multiple deck counting, which is to day that they go into true count conversion. I am not sure what you are referring to you state that their books do not have counting systems for multiple deck games.

Lawrence Revere's Playing Blackjack as a Business has 4-deck basic strategy on pp. 26 and 27, but not in the main chapter on basic strategy. The strategy charts in the chapters that present the counting systems are for single deck games. The booklets that Revere sold--his heirs continue to sell them today--for the Revere Advanced Plus/Minus Count and the Revere Point Count have 1- and 4-deck playing index tables. Playing Blackjack as a Business does, however, have a 4-deck true count conversion table on p. 137.

I did not state or imply that Julian Braun's How to Play Winning Blackjack covers only single deck games. This book has basic strategy and Hi-Low index tables for 1- and 4-deck games. I think it omits the pair splitting basic strategy for 4 decks with DAS.

I did not refer to Peter Griffin himself or to his book The Theory of Blackjack, but rather to the index table for the Griffin-1 count, which appears in Richard Epstein's The Theory of Gambling and Statistical Logic. The fact that the index for doubling 11 v. Ace is a negative number suggests that this table is for single deck games because basic strategy for 11 v. Ace is hit for 4-deck games and double for 1-deck games.

The Four Horsemen were Roger Baldwin, Wilbert Cantey, Herbert Maisel and James McDermott. They devised the first essentially correct basic strategy in 1956 and published it in a technical journal. Here is their paper:

http://www.bjmath.com/bjmath/basic/cantey.pdf

I describe it as "essentially correct" because it has been subsequently slightly refined and further determined for more than one deck and different rules. The Four Horsemen's basic strategy took blackjack from the stone age to the industrial age and is a substantial improvement over strategies like never break, mimic the dealer, hit up to 14 and John Scarne's published strategy.

Roger Baldwin, Wilbert Cantey, Herbert Maisel and James McDermott wrote a non-technical booklet containing their basic strategy in 1957. They use the term best strategy, rather than basic strategy. The book was reprinted by Cardoza Publishing in 2008. It contains a Forward by Ed Thorp and an Introduction by Arnold Snyder. I recommend this book.

The original publisher, not Cardoza, refused to print a photo of the authors. Wilbert Cantey was black. The original publisher thought having his photo on the book would hurt sales.

Cyrus, thanks for the support. Let brooklyn see some robust debate here.

I did not state or imply that Julian Braun's How to Play Winning Blackjack covers only single deck games. This book has basic strategy and Hi-Low index tables for 1- and 4-deck games. I think it omits the pair splitting basic strategy for 4 decks with DAS.

No, it's there -- p. 133, bottom chart.

Don

My post refers to basic strategy for 4-deck Hi-Low with DAS.

I recommend some things in addition to an IRA:

1. Maximizing deferrals to one's employer's 401(k)
2. Buying a house, condo or co-op
3. Buying a participating whole life insurance policy
4. Finding an employer with a defined benefit pension plan

This list is not exhaustive.

Brooklyn is 19 years old. I assume that he is single, in college and that he works during the summer. Based on my assumptions, recommendations 1, 2 and 4 are not feasible right now and 3 would seem unattractive because the policy will neither have cash value nor pay a dividend for the first one or two years.

Here is another possibility if he or his family has money they can keep tied up until he turns 59 1/2. Buy a variable annuity. Its tax treatment is similar to that of an IRA in that it grows income tax deferred. Some key differences are that there is no maximum contribution, contributions are not tax deductible and there is no required minimum distribution at age 70 1/2.

"My post refers to basic strategy for 4-deck Hi-Low with DAS."

In that case, p. 53! :-)

Don