The Poker Face of Wall Street
Wall Street is where poker and modern finance?and the theory behind these "games"?clash head on. In both worlds, real risk means real money is made or lost in a heart beat, and neither camp is always rational with the risk it takes. As a result, business and financial professionals who want to use poker insights to improve their job performance will find this entertaining book a "must read." So will poker players searching for an edge in applying the insights of risk-takers on Wall Street.
hand and two high cards; king of hearts/queen of hearts is both two high cards and suited connectors. In a rough average over many different games in my experience, a player who sees the flop has about a 40 percent chance of having one of these three types of hands. That adds up to more than 100 percent, due to overlaps. The most important numbers for determining hold ’em strategy are these percentages applied to the table, not to individual other players. I have never seen a hold ’em game, even
When you met him, you quickly realized that he was either crazy or a genius, perhaps both. He would talk to you only as long as he was interested, then, in the words of a friend of mine, “He could hang up the phone on you while speaking in person.” Black spent all his time writing short notes on ideas that occurred to him, then inserting them carefully into his massive filing system. His book Exploring General Equilibrium is deeply eccentric: He states his case in a few pages, then devotes the
has just rented his facility from June to August for $2,000. He has a couple problems, however. First, he has to come up with $9,000 in June, which he doesn’t have. True, he’s been promised $11,000 in August, but that’s too late and, anyway, the guy who made that promise doesn’t have $11,000. Second, most of the wheat that comes into the city does not meet the precise contract specifications he has to deliver in August and that he is best equipped to store in June. 13402_Brown_2p_06_r1.j.qxp
futures at the exchange. That gives him wheat now and a promise to repay wheat in the future. In other words, he borrowed wheat. That grain elevator might sell much more wheat than it had on hand, secure that deliveries would be made before buyers called for their wheat. The futures traders kept close eyes on virtual demand (the three-months’ supply the miller wants to hold for stability) and actual demand (the amounts the miller actually takes from the elevator). They were alert to anything that
play poker because it teaches objectivity. Most people are unreasonably optimistic some of the time and unreasonably pessimistic other times. Good poker players learn how to make the tough folds and when to pay to see more cards. I asked him if he thought gambling led to problems like petty theft to cover losses. He replied, “The stress just brought out a character flaw that would have surfaced anyway. It’s better to find that out young. The vast majority learn an important lesson that’s not in