The Poker Professor says knowing your place in the market is important to success.
Lederer: Poker is a game where you constantly… And this really applies to business, where you have to constantly be evaluating yourself and your strategy as it relates to your opponent’s strategy and that kind of fluidity and sort of attention that you have to pay to those things I think really apply in this. There are so many businesses out there that find a market niche or come up with some type of unexploitable strategy maybe on Wall Street and then, that exploit, you know, well, that niche goes away. And so, there are kind of two things. I think you have to recognize A) that you have to constantly sort of evaluate your sort of your position in whatever business you’re in or in poker and be willing to change things. You know, you either adapt or die, and potentially sort of get out the situation. I’ve certainly, you know, played in some games where I felt like I had a nice advantage and then, you know what? The game changed. The game got tougher, and you’ll have to be willing to accept that, well, maybe I should be playing some of these other games, and I think it’s the same thing in business. And, in particular, on Wall Street, I mean, where just, there are just so many strategies that were winning strategies and, again, what happens is the manager makes a lot of money for a bunch of years and just drives the strategy right into the dirt. And those, you know, as those [edges] go away and the market adjust to what they’re doing, you know, I think people on Wall Street tend to, and I think there’s actually evidence of this, tend to not be as self critical as poker players. I was talking to a woman… I’m going to say it was northwestern, but she had done studies with business, I mean, various types of people, you know, lawyers, business people, Wall Street types, and poker players where she had done some poker player sort of analysis, and she just had a simple kind of questionnaire, you know, and she would ask people a question, you know, just typical, you know, things like, you know, how many people do you think are [IB] in the world, or something like that, and then ask people their response followed by their confidence level, that they were right. And she just found that poker players were actually the number 1 scoring group, not necessarily for getting it right but for having a reasonable expectation and actually having it matched up to reality and that possibly one of the worst group she had were Wall Street traders, who were just so overconfident it was ridiculous compared to the quality of their answers, you know. And I think poker player… You know, playing poker and trying to become a professional poker player breeds that sort of self skepticism, willing to question yourself and try and make yourself better.