Lucky at Poker? Try the Stock Market

Author: Simon Dexter

The next time anyone starts rabbiting on about whether poker is a game of skill or chance, ask them to explain how the stock market works.
Although natural ability is useful when it comes to being successful at either, the fact is that with application, dedication and resolve, most people can perform perfectly adequately at the table or on a trading floor.
Critics might argue that there is no luck involved in the stock market, that all known features, good or bad, of a company and its shares are already reflected in its price. While this is technically correct, the key here is known features; it is the unknown which creates unexpected movements in share prices, as any unfortunate souls who owned Northern Rock stock would confirm. Indeed, it could be argued that anyone who invested in Rock shares over the past few years were taking a desperate risk, ostensibly because the company’s commercial strategy was flawed.
Now the BBC has joined poker’s “skill or luck” discussion by examining matters from the perspectives of a professional poker player, a statistician and the government.

Professional player Graham Newman conceded that while an element of chance was involved, poker was a game where skill and game-playing prowess ensured success.
“In any one hand of cards, there is a large amount of luck involved,” he mused. The skill element, he concluded, is in creating winning hands from randomly-dealt cards, ie by shifting the odds in your favour, something which is only achievable by being skilful.

From a statisticians perspective, Dr Barry Blight, formerly a lecturer at the London School of Economics, concurred, saying, “There is a great deal of skill in poker. It’s a combination of two types of skill, assessing the chances of the cards and the bluffing skill…it’s very complex. Working out the probability of cards is a small part of the game.”

However, a spokesman for the DMCS said that, “With the area of poker, there is recognition that people are playing different games now to when [earlier regulations] were drawn up in 1968.” Nevertheless, the government continues to maintain that poker is as much a game of chance as bingo and covered by similar legislation.

Tags: poker, poker skill, stock market

This entry was posted on Tuesday, December 18th, 2007 at 4:33 pm and is filed under News & Promotions Blog, Uncategorized.