What Investors Can Learn From The Best Poker Players

What Investors Can Learn From The Best Poker Players

Poker is a game of skill, and the pros have a lot to teach amateurs about the art of performing effectively at the casino or online.

Interestingly enough, there are quite a few transferable talents that investors can also learn about from the best poker players, even if they never actually apply them in the context of a card game. Here are some key lessons that are worth taking onboard if you want to make your money work for you.

Cards

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Short Term Strategies Never Work Out

Poker players can make the mistake of cashing out too early when they make a win, while conversely sticking around during a losing streak in a fruitless attempt to make up for their losses. This is all to do with only making decisions based on short term emotional highs and lows, and being unaware of this flaw.

Conversely the best players know that there is no point throwing good money after bad, while also realising that they can maximise their winnings if they stick with a clearly lucrative line of play.

This dichotomy is mirrored in the world of investments, where failed attempts to claw back cash after a loss can lead to poor decision-making, just as the premature selling of a high-performing stock might mean that even greater gains are missed.

A more logical, calculated approach which removes emotion from the equation can eliminate what the experts refer to as hedonic framing.

Luck is an Unavoidable Factor

This is another concept which poker players and investors need to drum into their heads in order to avoid making rash decisions. In essence, the role that randomness plays in both arenas means that the results of a particular path taken, whether good or bad, are not always attributable to the skill and intelligence of the individual.

This means that big wins and major losses can come about due to factors which were not just out of your control, but were also entirely unforeseeable. Keeping a level head at all times and not overacting in either direction is what separates good poker players and investors from the pack.

Regret is a Useless Emotion

While it is important for everyone to learn from mistakes, good poker players will rarely dwell on past decisions which led to unfavourable outcomes for too long, since this is wasted energy.

This applies not only to over-committing, but also to premature folding which, in retrospect, was clearly a bad move.

There is only one way to know for sure whether you would win or lose a hand of poker, which is of course to always hold out until the final cards are dealt, upping your stake to match your opponents along the way. Sometimes this would work out, and sometimes it would not, but over time the cost of such a tactic would become too much for most to bear. Investors can use this knowledge to excuse past missteps and steer clear of pointless regretting.

Reading People is an Important Ability

Poker is known as a game in which being able to read your opponents and predict their hands separates merely very good players from the greats. If you can look at someone and know what they are thinking, or detect the difference between their surface appearance and what lies beneath, you will know when to bet big and when to fold.

Investors should also cultivate this skill, especially if they are regularly going to be hearing pitches from prospective business partners. It will let them drill down through the marketing babble and trumped-up claims to find the kernel of truth at the core of a pitch.

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Anas Bouargane

Business Expert

Anas is the founder of CEF Académie, a platform that provides guidance and support for those willing to study in France. He previously interned at AlphaSense. Anas holds a bachelor degree in applied economics from the University Paris Sud.

   

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