Many have compared poker to the business world in that difficult decisions have to be made in split-second situations. According to one highly successful investment mogul, however, poker is a piece of cake to the world that he normally lives in.
On the Thinking Poker podcast, billionaire hedge fund manager David Einhorn opined that “the investing world is a little bit more multidimensional than poker” and that he plays the game for fun while the challenges he faces as the founder and president of Greenlight Capital provide him with more difficult decisions. While making this assessment, Einhorn did agree that several aspects of poker are quite similar to the business world.
Einhorn looks at both poker and investing as “if I’m solving a puzzle.” He stated that both have things you know (in poker, the cards in your hand and, in business, a company’s financial statements), hypothetical thinking (what an opponent is thinking and his playing strategy in poker, the agenda of the management of a company and their psychology) and the eventual endgame that emerges (what cards come in poker versus what occurs in the business world and with the different financial markets). The differences enter, however, in the time span it takes to determine success.
“With poker, you have a resolution of the hand within a few minutes,” Einhorn stated on the podcast. “Although the thought process may be the same with investing, you may have to wait (several years) for the outcome from your original decision. And the mindset related to that is very different.”
As of last year, Einhorn’s net worth is estimated at $1.8 billion, so it is clear that he doesn’t play poker for the money. Regardless, Einhorn steps to the felt of some of the biggest tournaments in the world and has had significant success on the felt. He first made his impact on poker in 2006 in finishing 18th at the World Series of Poker Championship Event, picking up a $659,730 payday. In 2012, Einhorn was back at the tables in Las Vegas – this time for the $1 million “Big One for One Drop” – where he finished third for a cash of more than $4.3 million. His more than $5 million in tournament cashes haven’t found their way into Einhorn’s pocket, however; he has donated all poker winnings to charity, including the Michael J. Fox Foundation and City Year.
Einhorn isn’t the only businessman to pick up the game of poker either recreationally or as a new passion. Dan Shak, a longtime terror on the high roller circuit, heads SHK Asset Management and routinely is involved in million-dollar futures trading. The poker stories of billionaire Andy Beal, the founder of Beal Bank, were well documented in Michael Craig’s fantastic The Professor, the Banker and the Suicide King and two-time WSOP bracelet winner Bill Chen is the head of statistical arbitrage with Susquehanna International Group. Add in such business power players (and poker dabblers) Steve Cohen (SAC Capital Management) and Carl Icahn (Icahn Partners) and Wall Street is well “invested” in the world of poker.
Not to be left out, Silicon Valley in California also has a wealth of businessmen who have a passion for poker. Chamath Palihapitiya, a venture capitalist who was once a vice president at Facebook, has cashed in several live tournaments (including the 2014 World Poker Tour Bay 101 Shooting Star). He often joins fellow California businessmen such as David Sacks (founder of Yammer), Sky Dalton (founder of Earthlink) and Dave Goldberg (Chief Executive Officer at SurveyMonkey) for private home games in the San Francisco area.
As you can see, the trend of businessmen being successful in the poker arena isn’t a new one and it probably is because they utilize some of their business acumen on the baize. But when it comes down to knowing what side their bread is buttered on, these businessmen don’t fool themselves into thinking that they are true professional poker players.
