The Poker Face of Wall Street (Aaron Brown)

Trader's Library #53 · Risk, chance and decisions. Poker and Wall Street share a language: risk and probability.

Author: Aaron Brown · Original: The Poker Face of Wall Street · Year: 2006 · Usefulness for traders: ★★★★☆

What it's about

A risk manager at the AQR fund and experienced poker player shows the links between poker and finance: how poker players and traders think about risk, probability and edge, and how people from poker helped create modern finance.

What it gives a trader

Brown explains that in both poker and trading it's not whoever holds the best cards who wins, but whoever judges probabilities and manages risk better over a long series. Lots of anecdotes from Wall Street life and the poker tables.

Lessons for traders

• an edge is a long-run statistic, not a single hand
• risk management matters more than individual hits
• people readily overestimate their skills at the table and in the market (the better-than-average effect, Atlas of biases #12)

What to watch out for

Digressive, with sections on financial history that can be tiring.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #052 Against the Gods (Peter L. Bernstein) · Library index · #054 The Black Swan (Nassim Nicholas Taleb) →

Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.