Doug Kass on Poker and Markets and Investing (via TBI)

The following has been taken as an excerpt from his post on TBI this morning.  I have read other posts and stories related to this 'relationship' between poker and trading/investing.  And in my own trading, the idea of managing your losses and letting your winners run is a similar tact.  As Doug says, play few hands, and let those that are stellar take the pot.  Make few trades and let the profitable ones run their course.


His advice for current markets?  Play tight.  In trading terms that means keep your stops tight and know your risk/reward acutely.

Poker and Investing

I am of the belief that many parallels can be drawn between poker and trading/investing. Back in early 2005, after playing in several events at Jack Binion's Gold Strike Casino in Tunica, Miss., I wrote about this subject, which I wanted to repeat in it's entirety this morning.

Poker and trading/investing hold many similarities and after spending a brief period of time with the greatest poker player of all time, Doyle "Texas Dolly" Brunson, here are some of the parallels between both activities.

Poker, like trading/investing, is a game of people. In both activities, one needs to get inside one's opponent or the masses' collective heads in order to be consistently winning. Importantly, in both venues, one has to know what makes your opponent or the market tick; what is the mood of your opponent or the psychological condition of investors who set share prices?

Neither activity can be gamed just mathematically or statistically. Many computer programmers have tried to game poker and the stock market but they have failed owing to the inability to understand the perception of the moment as judgment requires a human mind.

So, after spending 18 hours a day (for four days playing poker), here are some of the specific parallels I have observed.

Classes begin!

Read FULL POST HERE