5 ms·

I think poker is a great introduction to many really interesting and useful ideas. From basic maths to probability and statistics, simulation/programming, game

by dcl 6y ago

I think poker is a great introduction to many really interesting and useful ideas. From basic maths to probability and statistics, simulation/programming, game theory, decision theory, portfolio management, all the way to cutting edge reinforcement learning or AI methods. Lots of deep ideas to explore once you've been introduced to them.

HenryKissinger 6y ago
> portfolio management ??
- nexuist 6y ago
  Not folding when everyone else has may give you a market advantage, similarly being the first to fold may ensure you come out of the round in the best position.
- dcl 6y ago
  Poker is a high variance game. Aside from trying to get your money in while you think you've got an edge, you need to manage your bankroll through long periods of bad luck - make sure you're able to keep playing tomorrow, even if things go really bad today.
  - jacobwilliamroy 6y ago
    The difference is that poker is a game but finance is real life: physical resources, actual human lives. To operate at the game level of abstraction is sociopathic.
    - ufuft 6y ago
      If you're a poker professional, the game of poker and your finances are very closely related.
    - Traster 6y ago
      There are plenty of poker players who play professionally and the bank roll management aspect of the game is an essential part of their job. Which is why at the highest level you'll find quite a complex ecosystem of players selling stakes in themselves to each other to lower the variance.
      - agustif 6y ago
        So the meta-game of poker is betting in your own competition as in buying shares on their possible (winning) stake. That sounds a cool story either for a Doccumentary or maybe a webapp to easily manage that on the lower ranks where informality and everyone knowing each other might not be true?
        im3w1l 6y ago
        No, this is a misunderstanding. It's about balancing how much you invest in today's game with how much you invest in tomorrows game. Preventing an unlucky streak from wiping you out and all that.
    - eru 6y ago
      When real lives are involved, even more so do we owe it to our stakeholders to model the situations as carefully as possible, and figure out what the mathematically optimal strategies are. Whether you apply the mathematical insights straight up is another question. But there's no excuse for being sloppy: 'Physical resources, actual human lives' deserve optimal play. A sentimentality that treats a single photogenic orphan as more important than the plight of many does not cut it.
      - jacobwilliamroy 6y ago
        Just try to keep a handle on reality. People who play games tend to have a pretty loose grasp on the real world. Especially people who play games with other people's money.
        eru 6y ago
        > Just try to keep a handle on reality. Yes, that's important. And it's also important to always keep in mind the limitations of your models. (That's constantly on people's mind in finance already, by the way.) > People who play games tend to have a pretty loose grasp on the real world. Especially people who play games with other people's money. Citation needed, I guess?
        jacobwilliamroy 6y ago
        People who play money games literally have no idea what they're doing or what the real consequences of their actions are. They trade in weapons, they fund the destruction of human habitats, they undermine governments to put the desires of a small minority over the needs of the many. Yes they've lost their damn minds. And when anyone points these things out, they complain and deny responsibility. "If I don't someone else will. Why is the government always on my ass trying to interfere?"
        eru 6y ago
        Are you talking about any one person in particular? This seems like a whole hodgepodge of complaints about some boogeyman? Eg for what it's worth, I've worked in finance on and off, and I can assure you that most people 'who play money games' do not 'trade in weapons'. Trading weapons is a fairly specialized niche, and your average stock trader has no clue about that niche, even if they wanted to get into that specific market. There might be other things wrong with people working in finance. But not all people you don't like engage in all the vices you don't like at the same time. Btw, I suspect most weapons trading is done to prop up governments, not to undermine them. (Even thought neither you nor me might find the governments in question very sympathetic.)
    - PeterisP 6y ago
      Game theory is about making decisions in the face of uncertainty, especially as it applies to real life with high stakes. The core principles of game theory were developed and used for making specific military decisions in WW2 with actual lives at stake. Since game theory is a tool that allows you to make better decisions than the intuitive biases would nudge you otherwise, to operate at a game level of abstraction is not sociopathic but a necessity - if physical resources and actual human lives are at stake, abandoning such formal reasoning would be reckless and grossly negligent.
conistonwater 6y ago
For anything specific to do with statistics, risk management, finance, or programming, you are always better off studying it directly, the normal way, instead of going through poker. The same is true for basically any hobby. It's a crutch that people use, and an excuse for them to slack off.
- hnracer 6y ago
  As someone that had both studied and researched statistics (publications) and played poker, I disagree. Studying these topics will leave you with an academic knowledge, not a practical and deeply learned knowledge. There is a reason trading firms and hedge funds prefer to recruit good poker players. It's because it (i) teaches these concepts at a visceral, muscle-memory level, (ii) it teaches you to apply the concepts while under emotional strain (you may be surprised at the % of statistics professors will crumble totally when they have skin in the game), (iii) it teaches you to merge the concepts together (game theory, stats, etc) in a single cohesive decision-making framework. These are not skills that academic coursework can give you. Consider an analogy: Is it better to learn programming through merely coursework/textbooks, or by picking up a project where code is required to complete that project? It's also fun. It's the only reason many people get exposed to these important concepts without ever wanting to study statistics etc formally.
  - ReggieCommaRose 6y ago
    No one (prop/hedge funds) really does that anymore. Hiring poker players directly that is. Outside of really niche small firms with really specific cultures. It kinda almost happened with SIG and Jeans89 but Jeans already had a relevant degree on top of being a top 0.00001% player. The direct analogies between poker and market making are already way thinner than many people make it out to be though they still exist. But I’d argue poker experience is basically completely useless for quant investing.
    - hnracer 6y ago
      Nobody hires directly for it but it is considered favourably. SIG also has Bill Chen heading stat arb. Most firms I know of have a reasonably vibrant poker culture internally.
MrXOR 6y ago
Exactly! The inspiration of game theory was poker. John Von Neumann was interested in poker because he saw it as a path toward developing a mathematics for the real life.
KennethPT 6y ago
Strangely I think it also helped me become a better doctor. I think it helps you develop a natural insight into probabilities and people's reactions to them, which in a roundabout way helps in diagnosis.
- yhoneycomb 6y ago
  Are PT your initials? Or are you a physical therapist?
  - KennethPT 6y ago
    Neither! It's actually a reference to one of my favorite artists [1] [1] https://en.wikipedia.org/wiki/Panayiotis_Vassilakis https://en.wikipedia.org/wiki/Panayiotis_Vassilakis

by dcl 6y ago

HenryKissinger 6y ago

> portfolio management ??

nexuist 6y ago
Not folding when everyone else has may give you a market advantage, similarly being the first to fold may ensure you come out of the round in the best position.
dcl 6y ago
Poker is a high variance game. Aside from trying to get your money in while you think you've got an edge, you need to manage your bankroll through long periods of bad luck - make sure you're able to keep playing tomorrow, even if things go really bad today.
- jacobwilliamroy 6y ago
  The difference is that poker is a game but finance is real life: physical resources, actual human lives. To operate at the game level of abstraction is sociopathic.
  - ufuft 6y ago
    If you're a poker professional, the game of poker and your finances are very closely related.
  - Traster 6y ago
    There are plenty of poker players who play professionally and the bank roll management aspect of the game is an essential part of their job. Which is why at the highest level you'll find quite a complex ecosystem of players selling stakes in themselves to each other to lower the variance.
    - agustif 6y ago
      So the meta-game of poker is betting in your own competition as in buying shares on their possible (winning) stake. That sounds a cool story either for a Doccumentary or maybe a webapp to easily manage that on the lower ranks where informality and everyone knowing each other might not be true?
      - im3w1l 6y ago
        No, this is a misunderstanding. It's about balancing how much you invest in today's game with how much you invest in tomorrows game. Preventing an unlucky streak from wiping you out and all that.
  - eru 6y ago
    When real lives are involved, even more so do we owe it to our stakeholders to model the situations as carefully as possible, and figure out what the mathematically optimal strategies are. Whether you apply the mathematical insights straight up is another question. But there's no excuse for being sloppy: 'Physical resources, actual human lives' deserve optimal play. A sentimentality that treats a single photogenic orphan as more important than the plight of many does not cut it.
    - jacobwilliamroy 6y ago
      Just try to keep a handle on reality. People who play games tend to have a pretty loose grasp on the real world. Especially people who play games with other people's money.
      - eru 6y ago
        > Just try to keep a handle on reality. Yes, that's important. And it's also important to always keep in mind the limitations of your models. (That's constantly on people's mind in finance already, by the way.) > People who play games tend to have a pretty loose grasp on the real world. Especially people who play games with other people's money. Citation needed, I guess?
        jacobwilliamroy 6y ago
        People who play money games literally have no idea what they're doing or what the real consequences of their actions are. They trade in weapons, they fund the destruction of human habitats, they undermine governments to put the desires of a small minority over the needs of the many. Yes they've lost their damn minds. And when anyone points these things out, they complain and deny responsibility. "If I don't someone else will. Why is the government always on my ass trying to interfere?"
        eru 6y ago
        Are you talking about any one person in particular? This seems like a whole hodgepodge of complaints about some boogeyman? Eg for what it's worth, I've worked in finance on and off, and I can assure you that most people 'who play money games' do not 'trade in weapons'. Trading weapons is a fairly specialized niche, and your average stock trader has no clue about that niche, even if they wanted to get into that specific market. There might be other things wrong with people working in finance. But not all people you don't like engage in all the vices you don't like at the same time. Btw, I suspect most weapons trading is done to prop up governments, not to undermine them. (Even thought neither you nor me might find the governments in question very sympathetic.)
  - PeterisP 6y ago
    Game theory is about making decisions in the face of uncertainty, especially as it applies to real life with high stakes. The core principles of game theory were developed and used for making specific military decisions in WW2 with actual lives at stake. Since game theory is a tool that allows you to make better decisions than the intuitive biases would nudge you otherwise, to operate at a game level of abstraction is not sociopathic but a necessity - if physical resources and actual human lives are at stake, abandoning such formal reasoning would be reckless and grossly negligent.

conistonwater 6y ago

For anything specific to do with statistics, risk management, finance, or programming, you are always better off studying it directly, the normal way, instead of going through poker. The same is true for basically any hobby. It's a crutch that people use, and an excuse for them to slack off.

hnracer 6y ago
As someone that had both studied and researched statistics (publications) and played poker, I disagree. Studying these topics will leave you with an academic knowledge, not a practical and deeply learned knowledge. There is a reason trading firms and hedge funds prefer to recruit good poker players. It's because it (i) teaches these concepts at a visceral, muscle-memory level, (ii) it teaches you to apply the concepts while under emotional strain (you may be surprised at the % of statistics professors will crumble totally when they have skin in the game), (iii) it teaches you to merge the concepts together (game theory, stats, etc) in a single cohesive decision-making framework. These are not skills that academic coursework can give you. Consider an analogy: Is it better to learn programming through merely coursework/textbooks, or by picking up a project where code is required to complete that project? It's also fun. It's the only reason many people get exposed to these important concepts without ever wanting to study statistics etc formally.
- ReggieCommaRose 6y ago
  No one (prop/hedge funds) really does that anymore. Hiring poker players directly that is. Outside of really niche small firms with really specific cultures. It kinda almost happened with SIG and Jeans89 but Jeans already had a relevant degree on top of being a top 0.00001% player. The direct analogies between poker and market making are already way thinner than many people make it out to be though they still exist. But I’d argue poker experience is basically completely useless for quant investing.
  - hnracer 6y ago
    Nobody hires directly for it but it is considered favourably. SIG also has Bill Chen heading stat arb. Most firms I know of have a reasonably vibrant poker culture internally.

MrXOR 6y ago

Exactly! The inspiration of game theory was poker. John Von Neumann was interested in poker because he saw it as a path toward developing a mathematics for the real life.

KennethPT 6y ago

Strangely I think it also helped me become a better doctor. I think it helps you develop a natural insight into probabilities and people's reactions to them, which in a roundabout way helps in diagnosis.

yhoneycomb 6y ago
Are PT your initials? Or are you a physical therapist?
- KennethPT 6y ago
  Neither! It's actually a reference to one of my favorite artists [1] [1] https://en.wikipedia.org/wiki/Panayiotis_Vassilakis https://en.wikipedia.org/wiki/Panayiotis_Vassilakis