How Poker and the Stock Market Share a Similar Evolution

And how speed and volume have changed the game

Source: Madison on Pexels.

Warren Buffet destroyed the S&P for around 30 years.

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Source: Berkshire Hathaway

Want to know why?

These things didn’t exist yet.

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Source: Pexels

But this thing above isn’t enough. A lot of companies, like Berkshire, use them, and still don’t make what they used to. Every player on the market uses the cloud or stores a bunch of data. It’s the norm.

And this is true for everything:

  1. Chess
  2. Poker
  3. Stock Market
  4. Digital storage

Everything is stored and looked at and analyzed. Far faster than before. Computers used to not exist. Data collection used to not be a thing. Poker was played by common knowledge. People might learn to bluff more often and not know their expected lead or how the river could sway the odds.

Those expected wins didn’t exist.

Now, billions of moves are analyzed. People know from the start what their cards mean and how the game might play out. They weigh those odds, weigh them again, bet accordingly, fold accordingly.

People have gotten harder to trick. People have gotten harder to anticipate. Now, everybody is waiting for the next person’s move to make their own, knowing that there is a meta-game where each player understands the full information available to them.

About 10–20 years ago, if you had that edge with the numbers, you could win all or most games. Today, it’s not enough. You need to be exceptional. Everybody has the data. Everybody who is on a high-stakes table is guaranteed to know almost all the probability associated with the game.

Essentially, it has replaced the last pool of players with ones that have more access to information, making the outliers look as impressive as the ones 10–20 years ago. Except, now, they need to know that much more than they did before.

Any strategies that an average player used over a decade ago have been mathematically figured out today. That doesn’t mean the game has been figured out, though. It only means that the goalpost has been raised. You need to do more.

Written by

UC Berkeley, mathematics. Los Angeles. Long-time runner. Top writer on Quora, 100M+ total content views. New to Medium. Inquiries: Moumj@berkeley.edu

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