Born in Saarbrücken in 1993, Fedor Holz is the fifth highest earning poker player of all time, with 26.7 million dollars. Last year, he announced his retirement at the age of 23, to “collect and use other data”. Interview.

 

Hello Fedor, how much time have you got?

I've got time.

 

You love the Japanese concept “Ikigai”. What is it?

Ha ha, you've prepared well for the interview! In a few words, my understanding of Ikigai means finding your centre or your happiness by carrying out an activity that you like doing, that you do well, from which you can earn money and help other people at the same time. I love this concept because it removes the obstacles we encounter when we realize that we don't want to do the same thing our whole lives. Ikigai shows you what you are missing. For me, this was true with poker. I love this game, I’m good at it, I earned money, but obviously poker doesn’t help other people and this dimension was greatly lacking for me.

 

The season following your “retirement”, in 2017, you earned 6.38 million dollars just by playing a few tournaments.

It's a good figure. I like it. It looks like I played a lot more than I actually did because I was doing well over the year. I only did six or seven trips, which for me is barely anything compared to previous years. In a few days, I'm going away for a whole month for a real holiday.

 

Apart from live tournaments, can players earn a lot from online games and through sponsorship contracts?

It really depends on the year. When I started playing seven years ago, the tournaments were becoming more important, but online winnings made up most of the income. Players took part in a few occasional live tournaments. Today, these tournaments are the main focus and are really catching up. Winnings from online tournaments are continuing to fall. As for sponsorship, between 2007-2010, players received seven-figure contracts and company shares, but this is no longer the case. My name has a definite impact on the poker economy, and I'm happy to work with Party Poker as we try to look after players to help them play the sport at a high level, not just constant short-term speculation.

 

“In the end, playing poker involves making hundreds of consecutive investment decisions”

 

You've often said that money is both important and not important. What is your most treasured possession?

I've bought an apartment here in Vienna. My home is very high on my list of priorities. I don’t have a car or a driving licence, so my next favourite possession must be my watch. I bought it very early on in my career after passing the shop every day for two months, waiting to pass the $100,000 winnings threshold. Over time - without sounding too philosophical - I've realized that things actually have very little value, as the excitement comes from the high level of emotions you expect to feel when you possess these objects. This feeling is enjoyable - if you reach your target - but it might not be as exciting as you thought, and it fades away quickly. Today, I set myself targets that allow me to appreciate the whole process rather than just making me excited thinking about the end product. I make sure I make the most of every day without so much focus on the money.

 

What part does luck play in Poker?

Whenever there is uncertainty, luck plays a role, but the real question is: “What is the size of the sample - the number of hands - and how big is your edge?” If I have a considerable edge and there is an average number of hands, this means that I will win virtually systematically. These two factors interact in all situations. Players with a smaller edge must perform hundreds of thousands of transactions to be nearly certain of winning. These factors can be calculated using statistical approaches. In poker, my luck depends on the size of my sample and my potential edge.

 

You often refer to a “certainty factor”

I try to apply all the concepts that I think are important to all aspects of the game. My success in poker is definitely down to my ability to look for similarities and differences, so that I can apply slightly different solutions to new situations. Players with more rigid approaches make more errors as they are trying to solve different situations with identical solutions. I develop new strategies while I'm playing. The more sure I am about something, the more I want to do it. I weigh up my decisions. I give a weighting to each piece of information I collect, in the same way that experts analyze data or build artificial intelligence. Our brain works on this model too. The weighting obtained is a “confidence factor” and when it is very high, you can call it certainty.

 

“As humans, we focus much more

on the negatives of defeat than the

positives of victory.” 

 

Can you give me an example?

If I see that you're sweating, I consider this information from the viewpoint of your poker experience, the size of your bet, the reactions I've observed, and so on. Let's say you’re an amateur, you're not used to playing with such high sums, I remember that when you had a very strong hand, you didn't sweat at all, so I have a confidence factor of 9/10 and I'm almost certain that your hand is weak, which means I can radically change my strategy! A small piece of information has radically changed the data. I use confidence in the same way in all my investments as, in the end, poker is just like making hundreds of thousands of investment decisions. I'm not a speculator as I try to make the right choices in these little decisions.

 

You never invest more than 1% of your capital when you enter a tournament, is that right?

That’s what I recommend. As humans, we focus much more on the negatives of defeat than the positives of victory.  The higher you raise the stakes, the more you create the need to gain an edge, as negative emotion plays an increasing role. Take the example of someone who bets everything they have: the fear of losing everything is much greater than the desire to double their capital. Never forget that the best strategy depends entirely on your edge and on variance.

 

How do you calculate your bets for each hand?

By using a fairly complex mathematical equation called the Kelly Criterion, which has a very simple result. If we’re playing heads or tails, and I offer you a 5% bonus, the equation will tell you exactly how much to bet each time, and the results are incredible! For example, if you have a 10% bonus, you should bet 20% of your capital the first time. This is explained by the fact that the formula adapts in proportion to the changing volume, not to the number of units.

 

In the same way, champions ask investors to pay their enrolment fees for some tournaments.

Yes, it’s the same principle. If players have to pay $500,000 to enroll at some tournaments, they will need a huge cashflow, tens of millions of dollars. The best players attract investors: for example, if I sell 50% of the amount, we assess the return on investment and this helps define an edge. If my edge is 15% we can split it 10 for me, 5 for the investor, so they pay me $275,000 instead of $250,000 and expect a 5% profit. The system has been well established for years and it suits everyone.

 

I didn't know the poker business was so sophisticated!

I worked for a trading firm for a month in 2016 and I think that I just underestimated one of my greatest strength, which lies in my ability to stay almost completely emotionally disconnected. This means I can analyze all the factors to make a decision. There are exercises I do to improve this skill. For example, given that success and reputation are linked to financial performance, to absorb the usual 80% losses, I always write down the reasons that meant my failure was logical. I do this straight away! It really helps me keep my cool. Here, I've made four investments that suit me 100%. Two haven’t worked out yet, but I'm still very confident! Confidence is the critical factor. The ability to stay true to your decisions without looking at the results makes all the difference. There is nothing wrong with changing my mind sometimes, but being results-oriented and changing my mind based on that is detrimental.

 

You’re active in the Cryptocurrencies sector.

In my opinion, investing in this sector is a vote for the future. I don't know if Bitcoin will be around in ten years time, but I believe that cryptocurrencies will have a substantial impact on our society. I believe its very important for everyone to participate in that development and this is why I put time and money into making it a more transparent and accessible technology. I'm both excited and shocked by the number of conflicts that arise due to greed. To make sure that decentralized systems like Bitcoin work, reputation is an essential element.

 

Can you tell us about Primed Mind, your first major project as an entrepreneur?

I was seeking something that was missing. I've become more attentive and sharing, which gives me great satisfaction. I asked myself what I wanted to do for the rest of my life and I couldn't really think of anything definite. I realized that I had to think in a wider sense, in terms of ideology. There are two things I do well: interacting with people and learning. I realized that traditional learning methods are often unsuitable and that the growth mentality cannot be learned at school. In reality, we never learn how to learn. Instead of solving problems, we familiarise ourselves with the tools. Poker has taught me how to use practical solutions! I identified an opportunity for people I meet who have challenges in their daily lives. We offer an app through which users can listen to audio recordings that help them every day. This coaching method is not well known but I believe in it strongly as I use it personally.

 

How far have you got with this project?

The app was developed in five months and launched in May. We have over 60,000 users, 30,000 feedbacks and an excellent rating of 4.8 out of 5. That said, we are currently developing five projects with help from two investors. In my mind, Primed will be a facilitator for creating a network of talented people. Then things will happen!

 

Have you had any problems as entrepreneurs?

Yes, huge problems! The main challenge is stability. We all depend on each other. We create dependencies. I think this can only work if you have a long-term ideology. I'm not interested in limited relationships over time, as this would be a waste of investment and training. We have so many urgent projects that we are very careful about allocating resources and recruiting extremely talented staff. Compared to poker, it's very difficult!