An Alternative Job For Pokerheads

Harvard expert says succssful poker players could make great Wall Street traders! The business news publication Bloombergs carried an encouraging article for top poker players this week, reporting on a respected Harvard academic who believes they would make great Wall Street traders. Brandon Adams, who teaches behavioural finance at Harvard University's Department of Economics, says some of the best candidates for Wall Street trading jobs are the professional online card players. “They've essentially been the survivors in the system, a very difficult system where 95 percent of people lose money,” the 30-year-old Adams, who himself plays online, told a Bloombergs writer. “Anyone smart enough and disciplined enough to survive that system is probably going to do very well in the trading world.” The article reveals that an increasing number of hedge funds and brokerages are exploring the world of professional poker to find talent and analytical tools, according to financial recruiters including Options Group, a New York-based executive-search company. And Susquehanna International Group LLP, the Bala Cynwyd, Pennsylvania-based options and equity trading company, uses poker to teach strategic thinking. “Someone who has made a successful living as a poker player for a few years would more likely be a good trader than someone who hasn't,” said Aaron Brown, a 53-year-old former poker pro who is now a risk manager at AQR Capital Management LLC in Greenwich, Connecticut, which oversees $23 billion. “They know to push when they have the edge and they know how not to bust, and that's a tough combination to find.” The Bloombergs article suggests that skills that define successful traders include a rational approach to risk, fast decision-making under pressure, personal discipline and a well-trained memory - all elements found in top poker players. Options Group personnel recruiter Simon Satanovsky told the Bloombergs writer that he recently received an order from a hedge fund he declined to identify for online poker players with no financial experience. “Before, we were asking about GPA or the Math/Physics Olympiad,” Satanovsky, a former Russian national bridge champion, said in a telephone interview. “Now, we're asking questions about poker successes.” Harvard lecturer Adams said disciplined Internet poker players can be spotted on websites waiting for particular games, not tempted by those outside their area of expertise or financial comfort level. Their self-control and confidence would be useful in trading where large profits are possible, the probability of going broke high and the competition formidable, he said. “In poker, people are used to not sitting back and waiting for the fat pitch,” Adams said. “They're used to skirting the edge of ruin and they learn the tools of how to do that.” Susquehanna has been using poker to teach its new traders since it was founded in 1987, Pat McCauley, who heads the privately held firm's trader-development program, told Bloombergs. The company's founders played the game as college friends at the State University of New York-Binghamton, and the firm has held in-house poker tournaments to recruit traders and monitor decision-making skills. The trainees learn to use information they see in the marketplace to infer what motivates others, helping them make better prices. It's the same way poker pro Phil Ivey, considered among the game's greats, makes bets based on what he sees among his opponents, McCauley said. “What professional poker players are really good at is taking this information that's relatively subjective, quantifying it and making it objective, and that's what trading is about,” McCauley said. The ability to write complex poker algorithms, which either run poker Web sites or try to beat them, will get hedge funds interested, said Todd Fahey, a recruiter who specialises in quantitative finance at New York-based Exemplar Partners. “There have been a few guys that I've placed in the industry that come from the poker software side of the house,” Fahey said in a telephone interview. “Two Sigma, D.E. Shaw and any of your larger computationally-based hedge funds are going to want to see people like this.”