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Some hedge fund managers—Marc Lasry, for instance—are known to be aficionados of poker. Some—David Einhorn comes to mind—are known to be quite good at it.
Talal Shakerchi, unbowed though he might be, may no longer qualify for the latter accolade, having blown nearly an entire lifetime’s winnings in one night. Read more »
Disruption on Wall Street, resulting in image problems for the industry, smaller bonuses and less lavish perks, are spurring other midcareer bankers to similarly reassess their careers. After a lifetime of targeted choices—attending top-tier schools and pursuing competitive internships in hopes of winning high-paying finance jobs—some bankers are bailing out with no Plan B. Their only certainty, according to interviews The Wall Street Journal conducted with a dozen midcareer bankers, is that they no longer want to stay in banking…Andy Frankenberger left the industry in 2009 after 14 years as an equity-derivatives trader. “I wanted to grow more as a person,” he says. A recreational poker player, the 39-year-old began playing tournaments in 2010 and has since raked in $2.5 million in winnings. Still, Mr. Frankenberger says he wouldn’t rule out someday returning to banking or even starting his own hedge fund. “A lifetime is a long time, right?” he says. [WSJ]
Because this is Dealbreaker: A Place For Finance And Sometimes Poker™, I figured some of you would be interested to know: poker is now legal!
Sort of. Basically a fellow named Lawrence Dicristina was running a poker room in Staten Island. He was arrested by the Feds and charged under the federal Illegal Gambling Business Act. He was convicted by a jury and asked a federal judge, Jack Weinstein, to throw out the jury verdict because he ran a poker room and poker isn’t gambling. Today Judge Weinstein agreed: under federal law, poker isn’t gambling. So Dicristina is free to go.
The opinion is here and it is 120 pages; the important don’t-try-this-at-home headline is that this opinion “does not undermine the holding that poker is gambling as defined by New York law” and therefore probably illegal in New York. It’s just not federally illegal, which I suspect means that Lawrence Dicristina may follow in Sergey Aleynikov’s footsteps to state court. And this is just the opinion of one judge in one district, so consult your lawyer before you restart your online poker business/Ponzi scheme/other scheme that is not technically a Ponzi scheme: the online poker crackdown is unlikely to stop just because of this.
Nonetheless it’s a nice win for the forces of poker. The decision basically turns on whether poker is mostly a game of chance (gambling, bad) or skill (not gambling, okay). For this the court looked at the testimony of two experts, defense expert Dr. Heeb, “a respected economist, statistician, and player in national poker tournaments,” who argued that skill predominates, and prosecution expert Dr. DeRosa, an econometrician who “neither has any personal experience with poker, nor has he independently analyzed the game,” and therefore felt comfortable saying that it’s mostly a game of chance, which, okay, nice intellectual honesty prosecutors.* Given that – and, the fact that, y’know, poker is a game of skill – it’s not surprising that the judge came out for the defense.
Even if you’re not one of our readers who comes here for the gambling tips, you still may enjoy this opinion just for its recapitulation in miniature of the efficient markets hypothesis. Here is the defense expert’s money chart: Read more »
Someone must be wearing his lucky sweatshirt. Read more »
You’re a hedge fund manager running a Ponzi scheme in Los Angeles. You’re pretty into poker and attend bi-weekly games with various actors who, as it unfortunately turns out, aren’t half bad at cards. The buy-in’s $100,000 but you don’t have the cash. What do you do? If you’re Brad Ruderman you use some client funds to cover it, as well as the money you lose to Spiderman and Co. Read more »
James Gorman’s poker performance indicates he’s unlikely to run the firm into the ground. Read more »
If you’re going to commit financial fraud, you probably don’t want to find yourself sitting at a table across from David Einhorn, who will know what you’re up to and share it with the world. Similarly, if you’ve never played poker and have only ever had a 15 minute tutorial on the game, you probably should avoid playing with the Greenlight Capital founder, whose vastly superior skills will demonstrate just how much you suck. As I like to live on the edge, yesterday in an undisclosed location, I choose not to heed the wisdom of the latter. Over several hands, Einhorn and I discussed the new edition of his 2008 book, “Fooling Some Of The People, All Of The Time.”
The latest version includes an epilogue, and concludes the story of Allied and Einhorn’s years of trying to get other people to listen when he said something was up. As we now know, Allied’s shares collapsed, Greenlight collected $35 million, and the hedge fund made another big (and correct) call on a bank called Lehman Brothers, whose failure was, according to Einhorn, “the Allied story all over again,” just on a bigger scale, with more resounding consequences. Even after the last crisis, which should have been a wake-up call, Einhorn doesn’t think we’ve changed much and if anything, the reforms passed only “encourage poor behavior and will likely foster an even bigger crisis.” He and I chatted about that exciting event, Quantitative Easing, Steve Eisman’s illicit pleasure of choice and more, plus poker tips for people who really, really need them.**
BL: You mentioned an unexpected and tremendous response from readers of the book the first time around. What’s the craziest piece of fan mail you’ve gotten- has anyone sent you their undergarments in the mail?
DE: [laughs] No, do you think they should?
BL: Sure.
DE: You’re hysterical.
BL: I mean, people do that. Musicians, rock stars get sent that sort of stuff. You’re like a rock star…of investing.
DE: Well, the thing is, my following [for the most part] is with 20 to 35 year old men. So, you know. I definitely don’t want their undergarments. Read more »
After his 2005 career-ending concussion, Wayne Chrebet knew he needed some diversion to stay busy. He invested in racehorses, opened a restaurant in Hempstead, NY called “Bar Social,” and picked up boxing. Still, though, he felt like something was missing. Wayne needed some occupational passion in his life, and he also needed to avoid his wife, who was considering murdering him.
“She told me, ‘You’ve got to get out of the house or we’re going to get divorced,’” Mr. Chrebet said. “We got to the point during those first couple years where we were going to 10 a.m. movies and stuff. And we were like, ‘This is stupid.’ We’d just look at each other.”
Before he was forced to retire from football, he’d taken a liking to managing his own money, become a “self-professed CNBC junkie” and dabbled in advising his teammates in how to maximize their coin. So he figured, maybe I should get a job on Wall Street? And as luck would have it, he’d recently killed Morgan Stanley VP Ed Moldaver during a couple poker games at the local country club. Moldaver was so impressed with Chrebs that he offered him a gig, where he currently works on a 6-man wealth management team, mostly “meeting with potential clients and determining whether his group is a good fit for them” while leaving the stock and bond picking to “the professionals.” He loves the new career and takes it “very seriously,” though it’s not just dicking around and at times can be brutal. In fact, he almost didn’t even make it. Read more »
“Greetings Dealbreaker,
I am a senior in college in need of some advice. I’m hoping your readership can help me out.”
Last night was Bill Ackman and Whitney Tilson’s big poker tournament to benefit their charity, REACH, which gives inner-city high school students academic support and scholarships for passing AP exams. Some of the kids were there to tell their stories, which was adorable, and the event raised money for a great cause, which is nice. Humanity and whatnot. But enough about that. Who won big (prizes — and would’ve taken home cash were the evening not about the children)? Read more »
Just an FYI: there are only ten seats left for tomorrow night’s tournament (benefiting Bill Ackman and Whitney Tilson’s Rewarding Achievement (REACH) program, which gives inner-city high school students academic support and scholarships for passing AP exams). Read more »
