According to Details, yes. While some (many?) of you are making up for the slack in a no-bonus (and possibly no paycheck) year by turning tricks, others are supposedly doing so via internet poker, etc. This doesn't really seem like anything new to us, but perhaps we're wrong (it happens, occasionally)? Are you people or your friends/colleagues/pimps seeing an upswing here?
It's not just the recently unemployed who've moved from monitoring interest-rate fluctuations on Bloomberg terminals to searching out games on Full Tilt--it's guys who still have jobs but are looking to make up for the shortfall in their once-hefty bonuses. One hedge-fund trader, who competes under the name chosenpromise, is compensating for a withered paycheck by playing high-stakes Texas Hold'em. "There is not as much immediate upside on Wall Street as there used to be," he says. "After things got bad I upped my poker hours significantly."
In related news, for the junkies, perhaps consider seeking gainful employment at this place:
The perceived correlation between playing cards and trading stocks is so strong that when the markets were booming some managers even looked favorably on potential employees with poker chops. Trainees at the investment firm Susquehanna International Group are given Getting the Best of It, a book on gambling technique by David Sklansky, as assigned reading.
Posted by guest , Jun 01, 2009 3:21PM
Highly recommend intrade.com
Posted by guest , Jun 01, 2009 3:21PM
I was on a plane once surrounded by a bunch of people from Susquehana heading to a conference or off-site or something. They spent the entire flight (honestly) talking about arcane Bridge strategies. I was both impressed and appalled.
Posted by guest , Jun 01, 2009 3:23PM
I love that pic.
Posted by guest , Jun 01, 2009 3:24PM
The old SHWD had a poker table that was used my mgmt at least once a week, also have an employee tourney w/ a 5000 cash prize. Not much but still...
Posted by guest , Jun 01, 2009 3:29PM
@ 4, pls spend more time at your ESL class
Posted by guest , Jun 01, 2009 3:32PM
At the risk of getting me banned 4 life from DB, Einhorn looks so gay in that pic.
Gotta love the guys' poker is easy compared to IB comment in the full article. Must be at the 2-5 table or sumthin'.
Posted by guest , Jun 01, 2009 3:43PM
The correlation between playing cards (gambling) and investing is minus something. (former casino employee)
Posted by guest , Jun 01, 2009 3:48PM
I share an apt with a guy that, after losing his yacht broker job, turned to playing poker full time. He plays 12 hours a day six days a week and I guess he's making money since his rent checks keep clearing....
Posted by guest , Jun 01, 2009 3:49PM
@7: The understanding and appreciation of statistics, risk versus reward, game theory, etc is better understood by your average person playing cards than it is by your average investor/financial advisor, "wealth manager" whatever.
Posted by MoneyBoss , Jun 01, 2009 4:00PM
Poker got a lot harder with all the out of work quants and all the dead money being broke. I've moved onto more fertile pastures.
Posted by guest , Jun 01, 2009 4:02PM
@MoneyBoss-- such as what?
Posted by trojan , Jun 01, 2009 4:09PM
if only you could bluff in trading
Posted by guest , Jun 01, 2009 4:22PM
@10, totally agree. A lot less easy money from the idle stupid.
The most tax-advantaged upside today comes from starting a cult (or "self-help" biz).
Posted by MoneyBoss , Jun 01, 2009 5:42PM
@11 Sadly, the Wynn changed policies, so I can't show up in a tux like the Duke of Fremont and buy into $1-$3NL for $100,000 to impress the ladies.
I just tell women that I am employed and not in finance. Goes over like balls marie.
Posted by guest , Jun 01, 2009 6:21PM
Im not fortunate to have landed a job in the finance world and my career doesnt pay that hig of a salary, and no bonus....Im truly pathetic, and to make up for no bonus I play the Fantasy 5/39 lotto games.
Posted by guest , Jun 01, 2009 7:11PM
@MoneyBoss did they put a cap on that game?
Posted by guest , Jun 01, 2009 7:35PM
What separates investing from gambling? Understanding payouts vs. odds and having the information in hand ex-ante to make an informed decision. Full stop.
Example – In American roulette, a single number bet pays 35:1, but the odds of winning are 37:1. This means that the expected yield per Dollar bet is approx -5.26%, an asymptotically losing proposition; indeed a statistical arbitrage in the house’s favor. An investor would not make this bet because the probability space is known and immutable and the negative payout is known ex-ante. A gambler might though if they are willing to accept the upside potential for the smaller, but asymptotically assured, known loss.
But, as Claude Shannon (http://plan9.bell-labs.com/cm/ms/what/shannonday/shannon1948.pdf), and others well versed in information theory, practically demonstrated in live casinos, if either the odds and/or the payoffs can be shown to biased, given an immutable event space, then it is possible that a positive expected yield can be derived and a game of chance could be turned into an investment (i.e the direction of the stat arb could be flipped in the player’s favor).
For instance, if technology could be used to systematically determine where the ball would land the odds could be tilted (http://www.newscientist.com/article/dn4815-alleged-hightech-roulette-scam-easy-to-set-up.html). Alternatively, one could simply leave the odds alone and affect payoffs; one of the most ingenious scams ever perpetrated in Vegas used a sleight of hand known as the Savannah http://www.richardmarcusbooks.com/pokercheatingmoves.php#1. However, the success of either of these approaches depends heavily on the immutability of the event space; i.e. – the total number of outcomes, and more generally, the game overall can’t change spin-to-spin.
In financial markets several factors almost ensure that 90% of “investors” are gambling. 1) The event space is constantly in flux (indeed, the very structure of the “game” may even be changing as well); 2) without the ability to enumerate the event space, the ability to meaningfully asses the probability of an event is lost, so odds are poorly defined; and 3) payouts are not well defined. This means that unless you are in control of at least the event space and another factor, you are basically fucked. The inability to control these factors is effectively ensured by restrictions to direct market access (often by regulatory design) and, to put the nail in the coffin, by the imposition of transactions costs and fees to ensure that any edge that may be had is fully eroded.
The institutional infrastructure of the “market” will never tell you this of course. Instead they will pimp you their process and due diligence (read “betting systems”) and technical charts and opinions to boost your confidence. In the end, it doesn’t matter to them as long as you pay and you bear the asymptotically assured losses. It’s kind of like going to Vegas with a few buddy’s and they convince you that you should not enter the casino, but rather, should entrust your stash with them because they have this awesome “system” in place. Of course you can’t see the “system” cuz if it gets out it would ruin the system. So they go in and you have no idea what game is being played or what they are doing. They may come back with winnings and you will be impressed, but this is probably just a Ponzi scheme; or they could come back and say “Dude, sorry we lost 50% but here’s whats left”. In the latter case they probably didn’t bet at all and just banged a few hookers and snorted some lines off their ass, which is what most investment bankers do with your money anyway.
Anyway, don’t lose hope in all this and remember…always invest for the long term. This way we can keep banging hookers and snorting lines off their ass for years too come.
Posted by guest , Jun 02, 2009 4:22AM
To number 17. Nice post except you fail to note the fundamental difference between (predominantly) skill-based games like poker and 'gambling' (as with roulette).
Posted by guest , Jun 02, 2009 8:03AM
Yeah, roulette v. poker is probably the worst example. There's not a less skill-based game in a casino than roulette other than slots.
Games worth playing in casino:
Blackjack - Count cards.
Poker - Play against other humans.
Craps - Only if you are a trick-dice thrower and they let you get away with it.
Some Video Poker - There are machines that actually have player edge if you play perfectly.
Posted by MoneyBoss , Jun 02, 2009 9:48AM
@16 Yes.
$1-$3NL is now $500 max buyin, also they play with $5 chips because people couldn't multiply by $3 chips very well. (Seriously, I'm not making this up.)
$2-$5NL is now $1,500 max buyin.
No other max buyins at any other NL games, though.
Posted by MoneyBoss , Jun 02, 2009 9:51AM
@19 Remember that "playing perfectly" basically means "Always going for a Royal Flush" in most video poker worlds. This often means breaking up some better hands in order to go for those longshots. This is why it can still be profitable even if the game, if played perfectly, is +EV.
Posted by guest , Jun 02, 2009 10:59AM
@18 Yes, there is skill to consider in games like poker and in the markets. I used a non-skill game to break out the individuial factors needed to discern investing vs gamblimg.
But this brings up another issue....how to detect skill vs. luck. Take two poker players, for instance, who play 100 hands. Each wins say 70 hands so, at the margin, we might say that both appear to be skilled. However, player A could simply have gotten a run of good hands purely at random from the deck and appear to be skilled when he/she is not. Whereas player B may have gotten a run of pure shit hands at random but used his/her skill at bluffing and sizing bets to win each hande. Player B is who I would want to have my money with. Player A is a jack-ass punk who is likely to ride a false repuation effect, get overly confident and then generate a massive drawdown for you at the wrong moment. Fuck him.
Worst part in the markets...we never see the conditional information set that was in play relative to the decisions made by a manager/trader. Did this guy do really well regardless of hand dealt? Or is the dude just a punk? Even worse, is the dude a cunning marketer who knowingly presents information to give the semblance of skill when none truly exists. This latter example doesn't need to be Ponzi or fraud either, just careful. legal partitioning of perfomance info and infomormation. Beware, there are more of these guys out there than meets the eye.
Posted by guest , Jun 02, 2009 7:19PM
You don't win if you fold.
http://www.pokerhand.org/?758749
Posted by guest , Jun 02, 2009 7:23PM
Rep. Frank has introduced a bill to regulate online gaming, including poker. www.pokerplayersalliance.org
Posted by guest , Jun 03, 2009 8:58AM
Obviously 100 hands is far too small a sample size to determine skill. Play 100k hands and the varience will have evened out and you will have a fair indicator of skill.
Posted by guest , Aug 17, 2009 2:29AM
@23 AJKHoosier1 is a pimp.