I’ll Take Jeopardy, Risk, & Retirement For $1,000, Alex.
Updated: Apr 18
I’ll take Movies In The DirectTV Guide for $500, Alex.
The answer: “Two hit men, a boxer, a crime boss, and others meet their fates over the course of two days.”
James Holzhauer’s question: “What is Snatch?”
Correct question: “What is Pulp Fiction?”
Living in Minnesota, I don’t often read the Chicago Tribune, but the headline “Want to be a ‘Jeopardy’ champ like James Holzhauer? You can train for it, but the right type of brain helps too.” caught my eye. Maybe because it was so long. As I read, his story resonated with me. I also enjoyed the Weird Al parody playing in my head:
I was there, to match my intellect, on national TV,Against a plumber, and an architect, both with a Ph.D.I was tense, I was nervous,I guess it just wasn’t my night.
Even though I was appalled that the above answer was one of the few he has gotten wrong (I LOVE that movie!), James Holzhauer has many of the characteristics described in the article as traits of success. According to the article, one common personality trait of those who do well on Jeopardy is they think linearly and are often good at math. As you might guess, they often have photographic memories too. They are able to take a lot of information in and pull it right back out.
This ability can be powerful for many professions and activities, especially trivia. The article points out that this strength often comes with weaknesses. If there is one thing that superhero movies have taught us it is that most great strengths come with weaknesses, like Superman and Kryptonite. The weakness for the Trivia X-men –let’s call them Trebekmen (and women)— is their risk aversion.
This would explain a lot about James’s performance. Because not only is he winning but he is crushing all the dollar amount records per win. His average daily winning amount is more than the old one-day record — after 35 years!!! His approach to risk has a lot to do with this. He does not play it safe in the beginning, starting off with the smaller category amounts and only risking a lot when he has to at the end of the game. He takes on risk early and often. Betting large amounts on Daily Doubles early in the game. Why? Well, I am sure he is calculating odds and potential returns throughout the game, like most math-oriented sports gamblers, but my guess is he knows that if he gets one wrong, he still has a lot of game left to come back.
His approach not only takes advantage of his competitor’s weaknesses but also the flaws in the conventional way of thinking. What he has done is interesting on many levels, but being a financial planner, it was intriguing from a retirement and financial planning point of view.
During our youth, the Jeopardy of our life, is when we should be taking on risk; investment risk, career risk, social risk… you get the idea. As we near retirement we should decrease risk, because we have less time to recover if things go wrong. Age-based, or target-date retirement funds are based on this concept. They slowly decrease risk as the investor gets closer to retirement.
It is understandable that certain personality types would have trouble with this, but what is really strange is given the popularity of the show, James seems to be the first one to overcome this behavioral predisposition.
We all have personality traits that give us strengths and weaknesses, but we are also impacted by culture, or the accepted way of doing things. It’s why it took 35 years for someone to take the proper risk strategy to Jeopardy and why we have a retirement and student loan crisis. The accepted way of taking on student loan debt, buying a home, credit card debt, and saving for retirement is not the best way of doing things. Unless we start taking a fresh approach to our financial lives, we will not move past the accepted way of doing things and be the best version of ourselves.