Words ought to be a little wild, for they are the assault of thoughts on the unthinking
- J.M. Keynes

Tuesday, 1 July 2014

Traders and poker

I chanced upon this Bloomberg story on how hedge fund guru David Einhorn crashed out of a poker tournament. Quite interesting given my latest piece on how trading skills don't transfer as easily to poker (and the large role that luck plays).

From Bloomberg:
"One of the most dramatic hands of Day One came 45 minutes into the tournament. With the blinds at 3,000 and 6,000 tournament chips, Trickett -- an Englishman and a former professional soccer player forced into early retirement by a knee injury -- raised from the button to 18,000 chips. Einhorn, sitting in the small blind with pocket jacks, raised to 51,000. Trickett called, and both men looked on impassively as the three-card flop came 2-jack-6. When Einhorn bet 75,000, Trickett paused just long enough, riffling two stacks of orange chips, to look as though he might raise. He called.
The next card, known as the turn, was a 3. This time, Einhorn bet 175,000, and he seemed startled when Trickett raised him to 475,000. When he looked again at the 2-jack-6-3 board, Einhorn decided he must be facing an underset -- one of poker's dream scenarios, in which your opponent holds a three-of-a-kind of a smaller value than the one you hold -- so he raised to 775,000 to make sure Trickett would call. And he did.
The next card, called the river, was a queen. Einhorn bet around 1,000,000, Trickett raised all in and Einhorn called. He flipped up his jacks, not loving the queen but still expecting to win the huge pot. Then Trickett rolled over the decidedly bearish news: the 4 and 5 of clubs, for a well-disguised straight."

It's nice to have some timely empirical backing.


"The role of chance means that even ‘‘skilled” traders may struggle to repeat their success in poker...In addition to luck, which may make it difficult to translate success in financial markets to the poker table (or vice versa), the risk-taking mindset required is also different...Given these differences and the fact that a winning strategy in trading is not suited to poker, the odds are against a trader having an advantage on a poker table. Therefore, the next time you’re sat opposite a trader on a poker table don’t bow out. Take a chance and follow James Bond’s advice in Casino Royale—play the man across.  

(Read more at: http://www.livemint.com/Leisure/91GhDegxrZ4LjUWdijx4TP/Do-successful-market-traders-have-any-advantage-in-poker.html?utm_source=copy)




The role of chance means that even ‘‘skilled” traders may struggle to repeat their success in poker.

Read more at: http://www.livemint.com/Leisure/91GhDegxrZ4LjUWdijx4TP/Do-successful-market-traders-have-any-advantage-in-poker.html?utm_source=copy
The role of chance means that even ‘‘skilled” traders may struggle to repeat their success in poker.

Read more at: http://www.livemint.com/Leisure/91GhDegxrZ4LjUWdijx4TP/Do-successful-market-traders-have-any-advantage-in-poker.html?utm_source=copy