Poker Is Harder Than The Stock Market

There’s a viral article making its rounds around the poker world that outlines all the ways playing poker is similar to stock market investing. And while it’s certainly true that both share key attributes such as the need for risk-management and being a zero-sum game, the discussion misses a key factor that makes poker playing a significantly more challenging endeavor: time in market.

When it comes to poker playing, time alone won’t turn a bad player into a profitable one. We can see this just as clearly in our local 1/2 game as we can at the WSOP, where players who profess to have been playing since “before all these internet kids ruined the game” clearly still play as terribly as the day they took up the game. As an aside, my favorite example of this came the first time I ever played a cash game in Vegas and watched my elderly neighbor open-shove $1000 over a limp in a 1/3 game and then, once everyone predictably folded, flip over pocket aces and say, with complete genuineness: phew, I didn’t want a call, I always lose with aces.

In contrast, the stock market has much greater simplicity in that, so long as you can properly identify the trend, you can make a killing. And since there are only ever 3 types of trends to assess: bullish (up), bearish (down) and ranging (sideways), pattern recognition is much easier than at the poker table. In fact, if your eyes are even remotely open while playing the market, once you live through a couple of cycles you almost can’t help but learn some things. And even if not, since the variables are limited to three, you can have no talent at all and still find a winner one out of every 3 tries.

What’s more is that in the stock market you have the ability to “let your winners run” and keep earning the rewards in perpetuity. To compare it to poker, imagine sucking out as a 33% dog (your 98s vs their AQs, for example) and not only do you get paid when the river brings in your flush, but you continue to for as long as you hold on to the hand (until the next bear market at least).

Not to mention that unless you’re investing in company equivalents of offsuited one-gappers, odds are the vast majority of your losers aren’t going to zero like your losing poker hands do. In fact, those losers are incredibly likely to bounce back to even higher prices than before, given enough time. That would be like losing a hand at the poker table and knowing that if you do literally nothing for the next 5 years, you’ll get your money back and then some.

And they say poker players have it easy…

So yes, there are definitely similarities between poker and the stock market, but when it comes to putting your money in play against a table full of sharks, there are no easy paths or “hands-off” strategies that will get you to profitability. There’s no buying Apple or Amazon and shutting down your computer for the next decade, there’s no throwing money into Google every month and allowing time to wash away your inexperience.  In poker, unlike in the market, on a long enough timeline you get no rewards you don’t earn.

So the next time someone tells you that being a poker player is the same as being a trader, offer them a seat at your table and let them find out the truth for themselves.