Recently I was in a $150/$300 no-limit hold 'em poker game and made a call with king-high for about $6,000, and it was good. It felt good. I eased back into my chair and wondered, how did I arrive here? Where did it all start? There were a lot of break points on this journey I have been on, but there is one that I have never shared with you until today.

It is a story of going broke, getting out and never going back again. It is also a story about discipline; determination; resolve; and, above all else, appreciation.

I went broke one time and one time only. I leveraged myself to the hilt for an option trade on the NYSE, and things went about as badly as they could have gone. From this massive downtick I learned three things:

(1) What can happen when you are on the wrong end of a squeeze play

(2) What the Kelly criterion is

(3) The true value of discipline

Phil Laak has $1.4 million in career earnings. Shelly Castellano/Icon SMI

A squeeze play is when floor traders (market makers) "squeeze" you out of expected profits from a position that matures over time. Options are a zero-sum game, and if your profits are going to be noticeably larger, the guy on the other end usually notices. He then defends against his future loss by managing (manipulating) the price of the stock so that your option expires worthless (or close to).

The Kelly criterion is a formula used to determine optimal bet sizing given your bankroll and the expected return on your bet. (For more, see the bluffmagazine.com archives, April 2008.)

It mystifies me when I hear successful poker players tell how they went broke so many times. Nearly all winning players know about bankroll management, and most have a rough idea of what it means to play in bankroll-appropriate games. However, not knowing about bankroll management is not why they go broke; they go broke because they don't have the discipline to follow it.

Discipline. People talk about it, people think about it, and people know it's important. A few even use it from time to time. But often that is where it ends, and this is where you have an opportunity to get ahead of the pack.

If you are one of the fortunate, you will get perversely lucky early in your gambling career and hit the discipline defect trifecta (DDT). What is this? DDT is when a massive lack of discipline causes such brutal damage that you experience a transformation and never slip again.

For example, let's say you get an immunity shot from your doctor for smallpox. Here, you are intentionally getting a micro-shot of the virus you want immunity from. Your body fights off the micro infection, and as a result you are immune for life.

DDT is precisely the same, with one important difference: It's unintentional. It is when a massive lack of discipline causes such fiscal damage that if and when you end up recovering, you come away with a profound understanding of how important bankroll management is for life.

DDT -- discipline defect trifecta

1) First you go broke (defective discipline).

2) Then you live by the Kelly criterion (betting discipline).

3) And then you never slip up again (unfailing discipline).

People seem to have a knack for going broke, so there is no need to discuss the first part of the trifecta. But when it happens, do not despair. Should you emerge from this ordeal with the determination never to go back, you are well on your way. For this, my friends, is an opportunity to sear into your mind the utmost importance of parts two and three.

Personally, I needed to have a bankroll disaster (step one) so that steps two and three would become natural and automatic. And that is what the discipline defect trifecta is all about.

To be fair, I wasn't a total idiot, just a gamblin' fool. I had been quite successful trading my own money in the stock market. Never getting out of hand, I had managed to turn nearly $10,000 into around $80,000 in about two years' time. (Actually more, as I was living off this money as well. This was pre-gammon and pre-poker.) I give credit to my buddy Kris for some of my early success. Kris was a young market guru and very astute when it came to his bets. He never put more than 5 (or so) percent into any one play. We shared trading ideas, and on average his ideas were better than mine.

One day (on very good info) he decided to bet 25 percent on one play! This was coming from a super-cautious guy who never bet large. It was the first time he had ever put more than 10 percent of his net worth into any one bet. Wow! He really liked this play. I started thinking about how much I should bet. Surely 25 percent was not nearly enough. This was his home run pick. This must be the time to get a bit sick and go for the gusto. Enter the gamblin' fool.

Up to this point, I had made a few bets that were bigger than normal, but nothing like what I was considering. I was thinking big, really big. Why not just crush it this time? This would be it. I would bet it all and make a killing. Why not? What could go wrong? So that is what I did. I shipped it all in, $80,000 -- my net worth -- all on one bet: the option play that would make me a millionaire in about two months' time.

At this point I didn't know anything about the Kelly criterion. However, I did know the saying "Don't put all your eggs in one basket." Shipping it all was clearly a dumb long-term play. But I didn't need it to succeed in the long run; I only needed it to succeed this one time. That "eggs in the basket" thing applies to the unlucky ones. I've never been one of those, and I had evidence to support it. For starters, I had won on every bet Kris really liked, and this was a bet he loved. How could I lose? I was a consistent market winner. And never mind the market; in life things just always worked out for me. I was blessed with good luck.

Shipping it looked dumb only when you thought about it. However, this was no time to think. This was the bet that was the exception to the rule. This was clearly time for action. I would soon be victorious. I could already see myself sitting on top of my million-dollar stack of cash. King Philip. Destined for greatness. It was all so obvious.

What should a soon-to-be millionaire do with his time? Why not take a trip to somewhere wonderful? How about that backgammon tournament in Brazil I read about? That seemed like it could be fun. So off I went. I had a terrific time, and after the tournament ended, I decided to stay a bit longer. I was in a state of hubristic bliss, that's for sure.

I never checked on my position, not even once. Why bother? It was a sure thing. I was floating on cloud nine. Occasionally I would daydream about what I would do next when I got back to the States with my newfound wealth.

Merrily, merrily, merrily, merrily, life is but a dream.

Anyway, as you already know, I got back to the States and discovered that I was not a newly minted millionaire, but instead dead-broke. I nearly puked. I had gone broke a week earlier and didn't even know it. So sick.

Could I have been any more thoughtless? Well, for starters, I could have borrowed money from my buddy Elliott while on my trip. Oh yeah, I did that as well, to the tune of $5,000. I had officially dug myself a world-class stupid hole.

After it all sank in, I re-examined my new position.

Things I had:

• $450 in my pocket

• A motorcycle worth $500

• My trading account that now had a zero balance

• A deeper understanding of that "eggs in a basket" saying

• A debt to Elliot of $5,000

Things I didn't have:

• $1,200 for the rent, which was due in five days

• $5,000 for Elliot

• A plan for what to do next

My choices consisted of choosing where to live and what I would do when I got there.

I would need to live rent-free, as I had no money, and I needed to live somewhere in the action. This left me with one real option: my buddy Gary's place. However, as he did not have a spare bed or a couch, it would be the living room floor for me.

For income, I had a few choices:

1) Try to make a go out of playing backgammon for a living,

2) Go back to engineering, or

3) Get a job in finance -- Wall Street.

Choices two and three involved having a regular schedule and doing actual work for someone else, and this I knew would be a big mistake. (Schedules, work and bosses were three things that I always knew I wanted to avoid. I knew it even before I had them.) So backgammon it would be.

I knew from previous visits to NYC that the gammon culture/economy was alive and well. Lots of fish, lots of games, and not too many pros. The only problem was that I didn't have any money to play the games.

I didn't need much. $3,000 would be a decent starter pack. It would be enough to play the mid-stakes games they had in Bryant Park. And I would be able to pay the loan back in less than a month or two. Gary was mega-cool and loaned me the money.

"When it rains, sometimes it pours." Well, for me it was soon to become, "When it rains, sometimes you get stuck in quicksand."

The only time in my life I have ever been mugged happened about six hours after getting that precious $3,000 from my buddy Gary. Yup, I was maced and mugged. Welcome to New York City. Case money. Gone.

Not only was I broke and living on the floor of Gary's place (which was over the fish market in lower NYC with no air conditioning, and in the dead of summer), my net worth just kept sinking. If you remember, I still owed Elliot the $5,000 I had borrowed in Brazil. And now I had just been mugged out of the money I had borrowed from Gary. I was now $8,000 deep in the quicksand.

So gross.

I knew I needed one more loan, and there was no way I was going to Mom and Dad. No way. I just had to figure this out on my own. Well, I never told Kris this until today. (You remember Kris, right? He was from the first part of this story -- my stock-wizard buddy who lost only 25 percent of his money, not 100 percent.) But Kris, when you loaned me that thousand dollars, I was already in the hole to the tune of $8,000, and I didn't tell you that part. Sorry it took me this long to tell you. And thanks a million, sir. You are the man.

From that $1,000, I started all over. It never felt like suffering. It was just what it was. I walked 80 minutes to the park for those small-stakes backgammon games. And I walked back the same 80 minutes at night. Spending $1.50 on a subway token was just not bankroll-appropriate. I had cornflakes for breakfast because that's what I could afford. A box lasted a week and cost only $2. I ate pasta for dinner when I came home because there was lots of it at Gary's place.

I played 80-hour weeks of gammon for those first few months, because that was what I needed to do. I never felt miserable, I never felt pain, I never felt remorse for what I had done to get where I was.

I remember when I could finally afford to ride the subway. I remember what a luxury that was. I remember buying that secondhand bike. It had bad brakes and a wobbly wheel, but it would help cut my subway expenses back to zero. I remember calculating that it would take only 20 days to recover the $60. (Three dollars a day for the subway added up fast.) I remember how good it felt when I crossed that point.

I remember crossing all sorts of points from that moment on. I remember upgrading from Gary's floor to Franz's couch. I remember how good it felt to be closer to Bryant Park. It felt great to have my own place. Well, actually it was Franz's place. I just shared it with him. I was on the couch, and we had air conditioning. It wasn't my place, but it was a step in the right direction. I will never forget that couch.

I remember when local thieves stole my bike. They had to steal part of a fence to do it, but this was NYC, and stealing bikes was not an easy job. Sometimes they had to steal the fence as well.

I remember the pizza shop on the ground floor of our building, and I remember occasionally splurging for a slice of pizza. Little luxuries like that were slowly becoming affordable.

I remember when Svobo gave me $80 to get him some sushi. He told me to keep the change, and I said, "Are you sure?" He was, and that was nice.

I remember paying those debts. I remember how good it felt finally to be in the black. I remember when I left Bryant Park to go to the Ace Point Backgammon Club for the bigger games.

I remember leaving the couch of Franz's apartment for my own room in that cool-as-ever place the Danes had over on 46th Street. I remember when Morton and I decided to paint the place vampire red. Wow. Paint. I could afford paint. It felt good that I could afford something so luxurious as paint.

I remember when I finally had enough money that I needed to spread it around a bit: some in the bank, some at the house, some at the casino, some in Mom's freezer. I remember seeing good bets and not getting out of line. How good it felt to build slowly and assuredly.

I remember making sure that all of the decisions I made from ground zero through to today have been "bankroll-appropriate." I remember becoming very philosophical about the whole gambling thing, and I know what they mean when they say, "It is not the destination but the journey that matters."

I remember reading the book "Fortune's Formula" by William Poundstone. I loved the guy who kept going on and on about getting rich slowly. About always betting "Kelly-appropriate" and how you should always be insured against financial disaster.

I remember how good it all felt, how none of it was a chore, and how none of it was trouble. It just was what it was, and had to be done. I was one of the lucky ones. I went broke, learned the Kelly criterion, embraced discipline and never slipped again.

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