High-Stakes Sharks and the Wolves of Wall Street2 years ago
It’s often said that poker skills translate well into good business acumen, and the high-flying world of Wall Street seems to be the perfect training ground to prove this, with some of the best high-stakes poker players trading a life at the table for a life at the stock market – Vanessa Selbst just the latest in a long line to combine the two disciplines.
A recent MarketWatch article has attempted to define just what qualities poker players bring to the money market, and the first one they’ve come up with is that…
‘Both poker players and investors must be impartial and well-acquainted with risk...’
So says 30-year veteran of Wall Street Aaron Brown – a friend of Selbst who also penned the book ‘The Poker Face of Wall Street,’ back in 2006 when poker was at its peak and Brown was asked to "Give me a poker book I can put on the business shelf and I'll publish it," by a business editor friend.
Both worlds revolve around ‘risk’ and ‘skill’, judging what is a risk worth taking and analysing what worked and what didn’t, with risk expert Brown stating:
“People who haven’t had that experience find it very difficult to separate the decision from the result.”
“Learning to bounce back from crushing losses”
This, as any poker player knows, separates the winners from the losers long-term and Brown calls it the ‘zero memory attitude’, which we poker players would perhaps know better as not falling prey to tilt, as well as realising we are not invincible when we win!
“You can’t let recent events affect your thinking,” Brown told the business-focused website, explaining both poker and trading can be victims of this negative approach.
“People tend to make very different decisions after gains and after losses, and that’s just fatal to trading,” Brown said, adding that, “People tend to get more stubborn after taking big losses and stubbornness is a real problem.”
Selbst isn’t the only poker pro who has made the switch to Wall Street, Jason Strasser this week taking down a WSOP Circuit ring and proving that his poker shark abilities haven’t lessened despite turning to the financial markets – the one-time poker wunderkind now running his own hedge fund.
“Sharks and traders can make sense of patterns “
Brown states that spotting which pattern changes are important and which aren’t are key in both worlds.
“Figuring out what’s random and what’s not — that’s the key to everything,” Brown said. “People tend to overreact to random events, and they tend to under-react to signals, things that aren’t random.”
For successful poker players, that translates to not only spotting ‘tells’ but also remembering and analysing what previous plays were made by a player and factoring that into strategies – both worlds now relying heavily on disseminating and assimilating data, something which Strasser realised he had to work on when resurfacing in the poker world – and which apparently AI will have a say in from now on…
Whether Selbst can make the successful transition from poker to the financial world remains to be seen, but the likes of Bill Perkins…
...and, even more markedly, ‘amateurs’ such as Talal ‘Raidalot’ Shakerchi and David Einhorn have proven that the reverse switch can be done – using their massive hedge fund earnings to launch impressive poker careers.
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