Check out our brand new Local Poker Communities! Get updates and interact with poker players in your area.
Visit the United States Poker Community | Visit the California Poker Community | Read more about the Launch of P5s Local

Article: Poker and the Stock Market: Part 2

Reply to Thread
  1. xmikex137 xmikex137 is offline

    Durham, NH
    United States

    Posts: 10
    Joined: Nov 06

    Oct 31st, 2008 (10/31/2008 9:01pm)

  2. nemostars22 nemostars22 is offline

    North Andover, MA
    United States

    Posts: 312
    Joined: Jul 06

    Nov 1st, 2008 (11/1/2008 1:51am) in reply to xmikex137

    <p>really good finish nh man</p>
     
  3. jimmydewrag1 jimmydewrag1 is offline

    Fort Lauderdale, FL
    United States

    Posts: 387
    Joined: Mar 08

    Nov 1st, 2008 (11/1/2008 2:55am) in reply to xmikex137

    <p>Dude wondering if you were going to input Futures,Options,calls/puts into your article. By the way great two parter how about a third?. Anyway PM me about what you think obout a contract for oil(call) I think it should rise with a decent jump soon.Peace...dewrag</p>
  4. CJDeman CJDeman is offline

    Sydney
    Australia

    Posts: 820
    Joined: Jul 07

    Nov 1st, 2008 (11/1/2008 5:14am) in reply to xmikex137

    <p>Dont strictly agree with all your points but a really nice article, please write some more :)</p>
     
  5. gonja316 gonja316 is offline

    Posts: 2
    Joined: Oct 08

    Nov 1st, 2008 (11/1/2008 10:38am) in reply to xmikex137

    <p>nice finish man gg</p>
  6. Leet8s Leet8s is offline usausausausausa

    New York City, NY
    United States

    Posts: 8,036
    Joined: Aug 06

    Nov 1st, 2008 (11/1/2008 11:35am) in reply to xmikex137

    <p>ehhh, i disagree with some points here, i think you are too general in your statements</p>
    <p>"Any investor knows that stocks are very risky in the short-term. Stock prices fluctuate widely; a discernible contrast to the stability of bonds"</p>
    <p>not true at all, bonds, especially those of lower coupons and longer maturities have great interest rate exposure that can change its price greatly.  in addition, just like how a stock can report a very negative piece of news that can send it flying down, a company's bond can fall significantly on news of low liquidity or bankruptcy.</p>
    <p>"Since these are just averages and statistics, on some days variance will be higher than others and you’ll feel like the world is certainly scheming against you."</p>
    <p>High volatility the day before usually leads to high volatility today.  The market in general works on conditional volatility, something like ARCH modeling.  You make it sound like just some days you will see high (or extremely low) volatility just because it has to under a probability distribution.  This isn't the case.</p>
    <p>Overall it's a good article though, thanks for the read.</p>
     
  7. xmikex137 xmikex137 is offline

    Durham, NH
    United States

    Posts: 10
    Joined: Nov 06

    Nov 1st, 2008 (11/1/2008 1:21pm) in reply to xmikex137

    <p>Thanks guys. Leet8 just wanted to quickly respond to you to clear so something up.  The goal was precisely to be general in this 2 piece article. I wanted to do a 5part series but was limited to 2 and could not analyze deeper into some of these issues. Although I wish I could have.</p>
    <p>Your statement about bonds is true, but for a general comparison, conventional wisdom regarding bonds and stocks has always been = stocks are riskier. This is primarily because bonds have fixed maturities and if you rule out the company going bankrupt, you know exactly how much money you will be getting and when (assuming you hold until maturity). There are situations when some bonds are riskier than some stocks but take Treasury bonds for example: The yield return % is fixed over whatever period you buy it for. It's guaranteed. But everything you ever read about investing in stocks or bonds will consistently argue in favor of stocks being more risky. refer to <<a rel="nofollow" target="_new" href="http://www.investinginbonds.com/learnmore.asp?catid=3&id=383>">www.investin ginbonds.com/learnmore.asp</a></p>
    <p>Obviously if your talking about bonds in mutual funds as day to day investments, then yes they can be just as risky, but that to me is not par for the average investor. Just like buying risky bonds, there are risky stocks. When in doubt just take a value investing approach ;)! </p>
    <p>My volatility statement was supposed to be primarily a poker statement. I should have specified. But if you think about a portfolio of stocks, volatility isn't going to follow any patterns. There's too many elements (stocks) to apply a distribution of any sort. It's just going to vary from day to day ie be volatile. </p>
    Thread Starter
  8. kasilof kasilof is offline

    Northridge, CA
    United States

    Posts: 864
    Joined: Jun 06

    Nov 1st, 2008 (11/1/2008 4:48pm) in reply to xmikex137

    <p>1. I think I read somewhere in your article that the market is efficient.  It is not necessarily efficient.  The dot-bomb mania caused a big bubble.  Similar to Greenspan lowering interest rates creating a bubble in housing.</p>
    <p>2. I think you made the connection to stocks and poker.  However, I think you should also make the connection to stocks are horse racing.  The trainer like the CEO controls the shots.  The trainer might drug the horse, the jockey might pull the horse,  but all you got is DRF past performances.  In stocks you have the quarterlies.  The CEO may issue stock options and he might overpay himself of do other fraudulent things.  The track takes a 20% track take.  The government takes taxes and brokers takes fees.</p>
    <p>3.  It is very well possible that current bond and t-bill yields will not beat inflation.</p>
    <p>4.  The stock markets can be predicted.  However, poker involves random draws of cards.  Many investors predicted this crash and housing bubble.</p>
  9. xmikex137 xmikex137 is offline

    Durham, NH
    United States

    Posts: 10
    Joined: Nov 06

    Nov 1st, 2008 (11/1/2008 9:33pm) in reply to xmikex137

    <p>Kasilof-</p>
    <p>1) I didn't say I agreed with the "theory" of market efficiency. Many do, many don't. I was simply stating it was the most well known theory of the stock market.</p>
    <p>2) True but i don't know anything about horse racing so I couldn't really have written an article about it. Sounds interesting though.</p>
    <p>3) True again but this doesn't make bonds more risky than stocks overall. My point was that whatever rate you buy T-bill's at is guaranteed and locked in. </p>
    <p>4) Again, we agree. I didn't say poker and the stock market were completely similar, I'm just arguing that these 6 themes have a strong relationship.</p>
    Thread Starter
  10. cbax9888 cbax9888 is offline

    Hampton, NH
    United States

    Posts: 16
    Joined: Apr 06

    Nov 1st, 2008 (11/1/2008 11:12pm) in reply to xmikex137

    <p>great finsih to the article</p>
    <p>i enjoyed the 2nd part much better than the 1st but that was mainly becasue of your resposne to criticism on the artile. A writers true knowledge or power comes out in their resposne to criticism to their work and i feel you more than well exemplified your points.</p>
    <p>All the criticism was not directly but mainy because of the "broadness" of article but for 2 pages to explain a topic or 2 that 200 pages would not do the justice of explaining, isnt exactly easy. But i think you did a nice job</p>
    <p>Lastly looking at the body of work you have to remember its on p5's and for a p5's article the level of knowldge, grasp of the topic, and explanantion is clsoe to the top on articles ive seen on p5's.</p>
    <p>so great article , hope to see you write more on not only p5's but other sites, and btw luvin the close with the warren buffet reference...well played</p>
  11. Excalibur Excalibur is offline

    United Kingdom

    Posts: 16
    Joined: Nov 08

    Dec 3rd, 2008 (12/3/2008 10:37am) in reply to xmikex137

    <p>Great read.</p>
Reply to Thread

Similar Threads