Extra homework required

Author: Simon Dexter

Perhaps the bright spark in the City who, when confronted with this week’s stock market mayhem, still reckoned there was a better chance of backing a winning share than succeeding at poker, needs some additional poker odds tuition.

As trader’s screens turned red and markets plunged on fears of a crash, one equity dealer in London was quoted in a local paper as saying that: “although the markets are extremely volatile at the moment, investors still have a better chance of making money from shares than if they held a pair of twos in a poker game.” Really?

Let’s assume you hold pocket deuces and the flop fails to hand you trips, our man with the calculator maintains you have a 4% chance of hitting a 2 on the turn. The combined odds of hitting a 2 on the turn or the river is 8% or 12:1. Worth taking on? Well, you decide, but perhaps the odds against winning when you hold pocket twos are a tad better than buying shares in say, a bank, at the moment.

By last Wednesday morning when we last checked, over the past three months, shares in HBOS have fallen by 36%, in RBS by 23%, Barclays by 21% and Lloyds TSB by 14%; nor have matters improved much over the last four weeks. It does make you wonder whether some of these so-called City ‘whiz-kids’ have actually passed GCSE maths.

Tags: poker, poker skill, stock market

This entry was posted on Thursday, March 20th, 2008 at 10:46 am and is filed under News & Promotions Blog.