A Conversation with Eight-Time 'World Series of Poker' Champion, Phil Hellmuth

Hellmuth: Oh thank you. I thought it would be a kind of boring read, actually. (Laughs)

Hellmuth: I agree with that. I tried to keep a lot of interesting stories in there, so it's not too boring.

Connors: Yes, that's what made it fun. I know you have an interesting background. How did you get into the game? The story of who your father is makes it even more interesting...maybe you can go from there?

Hellmuth: Sure. Well, my Dad has about 11 letters after his name. He has an MBA, a J.D. and a Ph.D., so for me to end up playing poker for a living -- the oldest of five and a boy -- was quite a fight. You can imagine the first time I told him, "Dad, I'm going to be dropping out of school." He almost had a brain aneurysm. Then I was going to play poker. He equated poker with drugs and alcohol, sleeping until noon.

Hellmuth: Well, I was playing poker in college -- the University of Wisconsin -- and one day I made $6,500. And I just came back the next day and dropped all my classes. I had lost my focus anyway and I had wanted to go to Business School which required a 3.2 GPA at the University of Wisconsin. I'd gotten a 3.87 point my last semester, just to prove that I could do it but my overall GPA was 2.9ish. And I thought that maybe that one great semester would show that I could pull the weight, but they turned me down, so I just decided, "Hey, no matter what I do, no matter what path I take through school, I'll never make $6,500 in one day." (Laughs) So I just dropped out.

Hellmuth: Well, I mean of course we pay tax on a Schedule C. So in that way I'm similar to this business as well. (Laughs) Absolutely, it's a business. And it's important in this business, just like if you're trading on the Street under your own name, under your own account, with no supervision... it's very important to monitor the ups and downs and make sure you keep yourself in the game. In other words, don't run out of cash. Of course the skilled poker players can get staked when they're low on cash, or out of cash. And I'm sure the same thing's true in the markets. So yes, it's definitely a business. It costs $350,000 to play every major poker tournament these days. And I started to add it up and sure enough, just to get through the 35-day World Series Of Poker's over $100,000.

Hellmuth: Well, you have to decide if you're playing, for example, Texas Hold'em (which is the main game on tour these days), you have to decide exactly how you want to play Hold'em and what works well for you and what doesn't work well for you. You might want to try to emulate the way that I play, but it might not work for you. You might want to try to play the way another player plays, but then that might not work for you -- it's a very dangerous fast strategy. So you have to decide the way you want to play the game and then add moves that work for you along the way.

Hellmuth: But poker is a little different in that other people are involved. So if other people are playing a particular way, sometimes you need to make a few adjustments. I suppose that's true in the markets too. When you have extreme up and downs, you need to make adjustments. Both trading and poker are fast paced. In both poker and trading, you can lose a large percent of your net worth in a single day if you're not careful. Or for that matter, in a single hour, if you're not careful.

Connors: Right.

Hellmuth: And yes, you have to have a certain amount of control. You have to have some discipline to stick to your game plan, to stick to your strategy throughout the years. And then it's important to look at your money management. Money management is just huge in poker. The thing is that a lot of businessmen have people help them with their money management. Let's just say there is a great poker player out there and he only has himself, so the level of money that he has at the end of time on any given day may come close to matching his self esteem. Whereas someone who is a great businessman, if he wants to self destruct, a lot of times he'll have a buffer in there -- a board of directors.

Like a Bill Gates, for example. Let's just say that he can't handle it any more. He can't handle being the richest man in the world and on a lot of levels, it's doesn't add up to him. So he thinks of something crazy to do with his money that's just not going to work. I mean just a normal self-destructive thing. And then he, for example, can't get it past his first buffer. Never mind the board of directors who are just going to say, "Are you nuts?" So this guy just continues to go up. Now a poker player, if they get self-destructive, they can just go lose 25%, 50% of their money in any given night. Boom! Gone.

Hellmuth: Absolutely, and I think that part of that control, to me, is the support system that you get through having a family. In that way, my wife and kids are just invaluable to me. I know that it's for them too that I have to stay in money. I know that it's for them too that I can't lose this house.

So I'd set the record up. I'd been up all night. It was noon now and it was just miserable. I'd been up $3,000 to compound things. And so, now $20,000 wasn't that much to what I was used to doing on the road but you know, I was feeling the impact of a negative record... you know I'm a record guy. (Laughs) Came home, and my son said, "Dad" and came running into my arms. And by the time my hug was done, I was like in the greatest mood ever... like the whole weight had just lifted and was gone.

Hellmuth: And so you have Doyle at 9 and Chan and I at 8. And then you drop back to Erik Seidel at 6 -- he won one this year already to go to Number 6, Chris Ferguson won two of them to go to Number 5 and Layne Flack just won one yesterday to go to Number 4, I think. So we have a lot of champions winning this year, but to me it's about the Bracelets and so there's some pressure there.

It's amazing if you just stay focused on the game and what you're doing, it's amazing how the pressure disappears. I haven't been able to avoid the pressure in the last few years but this year, when I'm down there, I just realize, "Hey, this is just another poker tournament for me. Yeah, they're doing a live Internet broadcast in the background and yeah, there's history at stake and yeah, there's a ton of money..." but, you know, I can just shut my eyes for a few seconds and say, "All right, we're playing Texas Hold'em. There's four players left. What's the ideal strategy? Ah yes, that's it!"

So when I remember to keep my focus, the pressure disappears. When we were four-handed in this game, the third- and fourth-placed players self-destructed a little bit this year. And then it came down to me and another player who had never been there before, but he was playing tough. But I just kept thinking, "It's going to be difficult for him to win. You don't just -- the first time you make a final table -- win it. But you know, we played about three or four hundred hands between the two of us. It was a three- or four-hour battle. He played great poker and finally I prevailed.

Hellmuth: Exactly. This whole interesting thing that I saw recently in Sports Illustrated -- the guy who visualizes himself winning vs. the "grinder." And they were calling Jeff Maggert a grinder (this is the PGA Tour) and they were talking about Tiger Woods being a grinder. Well, I'm not so sure Tiger's a grinder (laughs) but you know, I've spent many years visualizing myself winning these tournaments. It's funny but that really allows you to win these things. It's important that you've seen yourself win it before, because if you haven't, you won't win. But it's also important to stay in the moment. If you're looking ahead to an hour later... you might make mistakes now. Stay in the moment and just do the best you can and when you have either all of the chips or there's none in front of you, then say, "OK, now it's time to relax."

Hellmuth: It's a fantastic show. It's Wednesday nights on Travel Channel and they show the hole cards in Texas Hold'em and this is really attracting the American public. It's becoming a hit show. But when you make the final six of a World Poker Tour event, or the World Series of Poker, there's a lot of pressure there. And the cameras are there. The World Poker tour set has like 20 different cameras (laughs) and there's lights and it's kind of intense. It's like the Big World Championship except not quite the money. So yeah, it's interesting... I like to watch the PGA Tour, the Majors, to see who can handle it and who can't. And the same thing in poker you see, who can handle it and who cant.

Connors: Yes. You talk about this in your book: Patience, like discipline, is a virtue in many areas of life and poker is no exception. If you're playing too many hands... Basically this analogy ties into trading. I see this with traders, they tend to overtrade instead of looking for situations where they have substantial edges. They'll look to find edges that really don't exist.

Connors: Right.

Hellmuth: You know, unless you're a professional trader or a professional poker player, it's very hard to explain what being big loser is like on any given day. I imagine in poker and the market, it's the same thing. You start to panic a little bit, you're frustrated. Your system's just not working that day. The poker players, a lot of times, they start to steam. I imagine with traders it's the same thing. They start looking at other situations they wouldn't normally touch. And fire at that. If they get lucky, they get even for the day. And if they don't, it's a real bad day. They're going to lose a big number.

Hellmuth: Well, you know, there's a lot of talented guys that steam out there. You would imagine that ultimately they're going to lose but maybe they have so much talent that they can overcome losing $3 million in bad trades each year, or $1 million steaming each year.

Hellmuth: Well, you just have to stay focused. I have a reputation as a Poker Brat, you know. (Laughs) That's my next book. Right now, this book is "Play Poker Like the Pros" and this is just a great book about how to play the game. My next book is my autobiography, Poker Brat. But right now, they're shopping a movie about me around Hollywood, even as we speak, called "The Madison Kid." And so this poker-brat image of mine... sometimes I'll "brat" at the table. People that know me away from the table are shocked that I could ever be bratty at the table. It's just a separate personality for me. But sometimes this bratty behavior like, "Oh, how could you play this hand?" or "How could you play that hand?" -- I actually say that out loud...

Hellmuth: I've done it many times. I'm not proud of it. That makes me look bad, number one. It makes me look like the John McEnroe of poker. (Laughs) So I look bad. Number two, it actually causes me to steam. So that the other players want me to act like that. It's funny because over the years they realize that boy, if Phil's acting like a brat, he's playing bad. So they actually try to put me on tilt. This year I'm controlling it well, and I guess that's why I have a first and a third already in the nine events I've played, first, third and twelfth, you know.

Hellmuth: Man, it's not easy dealing with losing streaks. Which baseball player deals well with the slumps that last a month or two? And all of them go through it. Which basketball player deals well with being 5 points off their average for a month? But it happens, you know. Which poker player deals with going through a lot of money in a short period of time -- a month or two? It's not easy. Sometimes at those times, I'll just say to myself if I'm having a losing streak, "You know, now's a good time to hang out more with the family. I'm always looking for excuses to just be home anyway. So I might just play less. I'll be on the road a little bit less during those times. Because I'm not out there trying to bang my head against the wall. (Laughs)

I write for a couple magazines and I have other book projects. I'd like to write a script. There are a lot of things going on. I like to place in my oars at ultimatebet.com and I'll be out there doing different things and relaxing more. And then I think the answer for me is to just look at the strategy I'm using and say, "All right, is this working? Are you doing what you've done for the last 15, 16 years? Do there need to be some adjustments made? And oftentimes, I find that I'm not doing what I've been doing the last 16, 17, 18 years. And I just go back to that strategy and that still seems to work pretty well.

Hellmuth: We have the World Series of Poker, the $10,000 buy in each year. And it's just uncanny how 615 people played last year and 400 of them just fell out of the sky. And so many of them are traders from Wall Street. They just take a week off and go play the WSOP.

Connors: Anybody can sit down and play a game of poker if they know the rules. Anybody can come in and trade the markets. That ease of entry allows people to believe that they can go in and compete against the likes of yourself or some of the professionals.

Hellmuth: And successfully this last year, because our $55,000 buy in tour champion was won by Alan Goehring who is like a bond arbitrage or bond trader or something like that. But I mean it's amazing -- the two five-day long championships that we had this year: One of them paid $2 million and the other paid $1 million -- were won by two amateurs, Alan Goehring and Robert Varkonyi.

Connors: Why is that?

Hellmuth: Well, there's so many of them. But I don't know why. I can't answer that. The Tour Championship was a $25,000 buy in. We had 110 players. I knew most of them, so there weren't that many strangers on the Tour Championship -- maybe 30 vs. 400 strangers in the World Championships. In the World Championship, you can see why, hey listen, 400 people you've never heard of, if one of those guys knows what he's doing and gets eight breaks, he can be down at the final table.

Connors: But at the end of the year it's the same names. When you add up the totals...

Hellmuth: At the end of the year, yes, but at the end of the five days it was Robert Varkonyi. At the end of this five days, I don't know how Alan Goehring won it. He's doing something different and it's working.

Connors: But it's like trading. At any given time, anybody can make money in any given week or month. But for a sustained period of time, it's usually the same names.

Hellmuth: I agree with that -- at the end of the year but how many of these Wall Street types that have such amazing skill at what they do, I mean some of these guys would certainly be on the list at the end of the year too.

Connors: You think so?

Hellmuth: If they focused on it, yes. But for them it's a pay cut. A lot of the Wall Street guys are making $10 million a year, $2 million a year...in any given year. And we probably have only 10 or 15 poker players that make over a $1 million a year.

Connors: Yes. Do you see the business side of this thing exploding? It certainly seems like there's almost an insatiable...

Hellmuth: Man, it's incredible. ESPN is going to be producing seven one-hour TV shows from the five day WSOP. For ESPN. And ESPN is playing poker over and over and it's getting NBA-like ratings. The WSOP is getting NBA-like ratings on ESPN -- it's off the charts!

Connors: I'm looking at your book right now and it is ranked 156 on Amazon.com -- did you ever think that would happen? (Laughs) That's unbelievable. I've written five or six books on trading and I know I've never been 156.

Hellmuth: I actually expect to sell a million copies of (Laughs). I don't know if it's going to take 20 years or not. I wrote this book to be a classic and I wrote this book for the American public and you know something? No one has ever written a poker book like this before. I mean the second chapter teaches people how to play Texas Hold'em. So that means, yeah all right, everybody gets two cards, face down, there's a round of betting, there's blinds...I start that basic.

Hellmuth: I mean look at the World Poker Tour. It's launching and they sent me a tape of their commercials when I got back to Palo Alto here. I threw in the tape and there's three TV commercials that I've been a part of and two of them just feature me. And they're awesome. I'm like, "Wow, this is so cool." And we could see this stuff coming. We didn't think it would take this long, but the American public right now is in love with poker. Amarillo Slim is scheduled to do the Letterman Show, I heard. He has a book coming out. There's about five poker books that all came out and the World Poker Tour is just helping us sell them. It's great to see poker take off like this, ESPN playing the Championships, Travel Channel having commercials everywhere for the World Poker Tour. It's cool.

Hellmuth: Online poker is really exploding and I play at http://www.ultimatebet.com. There's a table at ultimatebet.com called "Table Phil Hellmuth" and I helped them design their software and I know everything's on the level there and I stand behind their products. Online poker is a lot like online trading. You know, imagine your office having lunch and you go and play 10/20. We have a 81/60 game that goes all the time. And you can win or lose $10,000 at lunch. Now for most of the people out there, they can play the $4 and $8 game, that's the one that has my name, and take a couple of hundred dollar swing. Or there's a 10/20 game. But our site has up to 2,500 people playing all simultaneously. And we are just one of 10 sites that are out there So a lot of time you have 25,000 or 30,000 people playing poker online right now... so the online poker world is just launching... I was eating dinner with someone the other night -- he plans at ultimatebet.com. His name is Crazy Canuck. This was in Atlanta and someone recognized his ultimatebet jacket and he was signing autographs. This is an online poker player! It just shows you what's been happening out there, the influence of the Web.

Connors: The whole thing's amazing. This has been a pleasure -- I have, of course, known of you for years, but it's been a pleasure just to get a chance to speak with you, and to spend an hour together.

Hellmuth: Thanks, Larry. It's pretty cool that you play, actually.

Connors: No, Phil, you play. I only pretend to play. Thanks again.

Hellmuth: Thanks for having me on the site, Larry.