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Minyan Mailbag: Poker


Thx Pepe!


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.

Editors Note: The following was taken from an exchange between Minyanville contributor Fil Zucchi and Kevin Depew. As it refers to Scott Reamer's article "Emotions" from earlier today, we offer it with hopes it adds some added context.

Fil -

Thank you for posting the interesting buzz on the explosive popularity of poker and its potential unintended consequences for financial markets. For those Minyans who have been following Scott Reamer's series on how markets are non-linear, and particularly today's piece on "Emotion", consider this thesis: that it is more likely that the popularity of poker, indeed all acts of speculation, have grown as the public's emotional appetite for speculation has grown.

The partial unwinding of the tech bubble that began in 2000 left hundreds of thousands of former market participants, speculators, without an avenue to pursue their appetite for speculation.

Consequently, it is not that surprising to find that here, almost five years later, we have seen an explosive growth in poker as a pastime, even profession for some. The cost to entry is much lower, the stimulus more immediate, the transactions easier to facilitate.

The author of the poker piece outlines just a few of the irrational decisions that individuals voluntarily choose when playing poker.

Minyans may wish to consider those irrational decisions, and then consider the last time they ever met someone who admitted that they are a poor poker player. Both of those questions resemble key components of investment and trading failure: irrational decisions compounded by an overestimation of skill level. Thinking about the poker article in this context one can gain a deeper understanding of the very important points Scott was making this morning with respect to emotion and its implications in price discovery for financial markets, and how seemingly unrelated things are actually all part of a larger complex system.

Enjoy your posts very much, Fil.

Happy New Year,
Kevin Depew

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No positions in stocks mentioned.

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