The first time I watched Boiler Room, I identified with it instantly. I loved every line in that movie. It inspired me to “get” out there and get what I deserved. I had been pursuing a career in the mortgage industry and chose to work for a direct lender and I had slowly been seduced into the world of online poker too. Seth Davis, the main character in Boiler Room, was a college dropout who ran a casino in his apartment and started a successful career as well, at a firm called J.T. Marlin. He was good with odds and had became the most successful broker within his group.
Years later, a firm named Toro Trading recruited an online poker player named Chris Fargis who never went to business school and didn’t have any trading experience. And Joe Cada, 2009 WSOP champion says , he is an avid follower of the stock market too. Why would Wall St want these guys?
Chris Perruna, is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid fundamental rules with education and being able to create your own methods and styles to become successful. But how does poker play a role? Do similar rules apply?
1)Chris says, “The investor must consider the odds of his/her stock making a gain or making a loss. Price objectives and targets should be a large part of every investor’s system. With proper money management and calculated expectancy, the investor should aim to trade only in situations where the odds are in his/her favor.”
2)Psychology and/or human emotion. Stocks are made up of human character traits, similar to the type of people that own them. Some stocks are risky and volatile while other stocks are conservative and predictable. The market repeats cycles and specific chart patterns because humans repeat their actions and character tendencies. This is the same as player’s betting patterns as well.
3) If the flop doesn’t provide him with the cards he needs to improve his hand, he can immediately cut his losses short by folding and wait for the next hand. Is the same true in investing? The connection he is trying to make with investing in the stock market and playing poker relates directly to cutting losses short (capital preservation and money management) and your odds of winning the game (in the stock market this could be called expectancy).
So if gambling or Texas hold’em is a solid testing ground of keeping your nerve and teaches people how to be good decision-makers under high levels of uncertainty, why aren’t all the poker players wearing suit and ties with their brief cases? Where are all the Seth Davis’s and their “J.T. Marlin’s?”
Are online poker players with great analytical skills a viable option? Could they handle a high-pressure fiscal job? What about understanding how to play marginal business situations and how to safe-guard funds?