The Poker Face of Wall Street

THE ART OF UNCALCULATED RISK ♠ 23

dollar. If you think that way, you’ve lost already. You need a strategy, and a trade or investment decision can be evaluated only in the context of that strategy.

Despite that, there’s no way to write this book without discussing some real poker hands and real trades. The question is, how to do it without being misleading. It would fill this book if I listed all the considerations that go into even one hand. I’d have to put in everything I knew about everyone at the table, everything that affected my judgment about what cards people had, every past hand, and my thoughts about future hands. But that could give the impression that I sat for two hours mulling over subtleties before folding a worthless hand. I rarely go through even a few seconds of formal calculation or conscious weighing. Afterward I can reconstruct the factors that went into the decision, but that makes it seem much more organized and deliberate than it is. If I asked you how you decided to wear what you’re wearing right now, you could probably think of dozens of things that influenced your choice, but you probably didn’t spend a lot of conscious effort weighing them.

There’s another misleading aspect to this kind of account. I was a baseball umpire in high school. Once in a while the runner would be safe, I would see him as safe, and I would call him safe, but looking at myself from above I would see that I was calling him out. These were the clearest and most definite calls I made. All the while, one part of my brain was telling me, “No, you’re supposed to call him safe.” I can’t explain why I did it; every conscious part of my brain said “safe,” but my body was clearly signaling “out.” I’ve done the same thing in trading and poker. I never know why I do what I do, and I am reminded of that fact only when what I do is exactly the opposite of what my brain ordered. Otherwise, I ignore the difference to maintain the fiction that I am in charge of my life.

In baseball, an umpire can never change a call. Maybe in the World Series, where the game really mattered, you would; I don’t know, no one ever asked me to umpire the World Series. But in amateur games, changing one call just means people will argue every call, and no one will have any fun. Some umpires practice payback. I just figure the bad calls are random pieces of luck, like bad hops on