Poker's Surprising Lessons for Investors

The Wall Street Journal

In a narrative that intertwines the worlds of poker and investing, Susquehanna International Group executives Todd Simpkin and Jeremy Wein demonstrate how playing poker informs trading strategies. The discussion highlights the volatility inherent in both poker hands and market situations, stressing the crucial skill of risk management. Patience and decision-making are foundational to success in both arenas, as traders learn to differentiate between making the right choices and achieving favorable outcomes. Simpkin emphasizes comfort with risk, stating that both poker and trading require sound risk assessment and capital allocation—to take risks at the right price. The conversation covers mistakes rookie investors often make, such as assuming present conditions will continue. Furthermore, they discuss the importance of humility and the continuous evaluation of one's decisions to improve strategic approaches. The session emphasizes that just as successful poker players analyze their hands for improvement, traders must audit their strategies to avoid common pitfalls and embrace the variance that both fields present.

Highlights

• Susquehanna International Group uses poker as a training tool.
• Poker teaches key trading lessons about risk management and patience.
• Making the right decision doesn’t guarantee the right outcome.
• Rookie investors often mistakenly predict future market states based on present conditions.
• Success in trading and poker relies on sound risk assessment.
• Self-evaluation and humility are crucial for ongoing improvement.
• Traders are encouraged to learn from both their wins and losses.
• The conversation highlights the need for good information quality in decision-making.
• Both traders and poker players must manage their bankrolls effectively.
• Understanding the psychology of opponents can aid in both trading and poker.