Phil Hellmuth Has Some Advice That Every Trader Should Hear

The link between trading and poker is frequently made. They are both probabilistic games in which exploiting the mistakes of others is a path to profit, which is of course the scoring system in both games. The tools frequently transfer between the fields – game theory started out as a branch of economics now such a fundamental part of how poker strategy is discussed, and bankroll management in both fields draws on the Kelly criterion.

There are also psychological comparisons with tilt and chasing losses being a big part of both. What was Nick Leeson if not tilting balls when he took down Barings Bank.

So it was not totally incongruous when Phil Hellmuth rocked up on Bloomberg’s Odd Lots podcast, a trading podcast presented by Tracy Alloway and Joe Weisenthal.

Their conversation with the Poker Brat focuses a lot on bankroll management and the connection between Phil’s long term ability to stay in the game in his high variance field with the similar talents of Warren Buffet. 

“Never risk too much of your money on any given day,” is Hellmuth’s advice. Go busto and you’re out.

The conversation also ranges to the investment style practice of staking, and joys of combining that with live streaming technology to the inevitable question about the issue of whether he is a “mathematically correct” player, his response is as modest as can be expected.

“What I have, you can’t buy it. That’s reading ability, what I call White Magic.”

Prepping for the WSOP after the strain of his business interests, playing cards, and churning out 1500 words a day (props to him, I know what that last part is like).

But his final words of advice to traders everywhere goes back to the first point about bankroll.

“Risk less money,” is his three words of advice. 

For more on why give the show a listen here.