In 2004, the book “Harrington on Hold ‘Em” was published. Dan Harrington was one of the most successful tournament poker players of all time, and the book reshaped how I and many, many others played poker. But it also left a mark on me more broadly. An important part of poker is deciding what hands your opponent might have. Paraphrasing, Harrington wrote on that topic that “there is always at least a 10% chance your opponent has something you aren’t considering. Maybe you sneezed and they decided it meant you were bluffing. Maybe they got an annoying text right before the hand. Maybe they are just confused. Regardless, never underestimate the possibility that your opponent will do something you could not have imagined.”

Flash forward 8 years, it is the summer of 2012 and I have just landed in Beijing with my family. Upon getting to our new apartment, I realized that a bag was missing, and that bag contained my underwear. This led to an emergency trip to the Gap. When it was my turn to pay, an elderly woman just walked in front of me like it was nothing and cut me in line. My local friend who was there to help me navigate described it as such: “She grew up during famines where if you cut the line you got to eat and if you didn’t, you didn’t. You think she cares about the social conventions around waiting in line at the Gap???” It turns out that much of what we call “common sense” or “logic” are not universal truths; they are really choices that are shaped by our values, culture, and lived experience. I didn’t expect that old woman to cut me - it didn’t “make sense.” It took years of living in China before I stopped being surprised by how differently those around me would view a situation, how they would make choices, and what they would value and what they didn’t. I learned to be humble about “knowing” how folks from radically different cultures would think.

Which brings us to today. When I apply the Harrington 10% rule to Trump and multiply it by the “you can’t possibly see the world the way an Iranian cleric sees the world” rule, I end up in a place where virtually no one could possibly know how things resolve from here. Or put another way, at this point I believe that more or less anything is possible from this conflict. And yet…when I look at market pricing and market commentary, I see a lot of yawning, a lot of “knowing” that things are going to go back to normal, a lot of “knowing” how Trump and Iran will proceed, and a lot of complacency about how wide the range of outcomes could be. Maybe things will work out fine, they usually do and that is probably the most likely outcome. But scanning across options markets, we see a lot of good value. Specifically, we see some high-stress scenarios discounted as nearly impossible, when our analysis says they are very much possible. That creates opportunity.