The Holdem concept is new to many but as articles published by the magazine which appears on Sundays in The Washington Post and everyday online suggests with firm resolve that poker and especially Texas Holdem Poker is just like real money investment banking.

Kiplinger articles discuss the merits of using “free” poker to learn to invest and how this is at odds with a core part of the Texas Holdem Investing idea, learning to invest by playing poker with real money at risk. One article describes why Texas Holdem is the closest form of gambling to investing because players with greater skill levels will generally “outperform the market” compared to less skilled players.

Frank Murtha states that the goal of Texas Holdem is “to accumulate capital, based on decisions with imperfect information” which is a very close description of investing. It goes on to describe how the various phases of Texas Holdem are similar to the various stages of an investment decision.

Every element of Texas Holdem poker can be related to the investment game. Risking new or old capital is based on information and minimizing risk is part of the skill in both investing and poker playing. While it is not totally necessary to play poker with real money, playing for real creates both fear and elation and both of these kinds of thinking can affect your decision making.

Evaluation of your starting hand for example is similar to reviewing the investment opportunities available to you. The small and big blinds are an analogy for your costs of an investing and information platform. It states that making a bet is similar to making an actual investment and then the investment “flop” begins when a review of your investments comes due with the advent of new but incomplete information. If you are still with a particular investment at the turn and river stage then it should be a very good security because by now you and your capital are firmly committed.

Posted on: January 23, 2010

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