The Poker Face of Wall Street

by Aaron Brown

Book Overview

Wall Street is where poker and modern finance'and the theory behind these "games"?clash head on. In both worlds, real risk means real money is made or lost in a heart beat, and neither camp is always rational with the risk it takes. As a result, business and financial professionals who want to use poker insights to improve their job performance will find this entertaining book a "must read." So will poker players searching for an edge in applying...

• Format: Hardcover
• Language: English
• ISBN: 0471770574
• ISBN13: 9780471770572
• Release Date: March 2006
• Publisher: John Wiley & Sons
• Length: 350 Pages
• Weight: 1.30 lbs.
• Dimensions: 1.3" x 6.1" x 9.3"

Customer Reviews

Kicks Economic Orthodoxy in the Shins

I give credit to Morgan Stanley for letting this book get published. It's hard to imagine the fuss these ideas will kick up, or which kick in the shin is more outrageous--bringing Wall Street's hallowed financial institutions down to the level of casinos, or elevating poker and uncouth gambling games up to the level of white-shoe financial establishments in terms of long run financial utility. If Brown is right, gambling (and particularly poker) played a pivotal role in the development of dynamic financial life as we know it... and will continue to play such a role in future. It makes sense when you think about it. Risk and ruin are factors of enterprise, as is the gambling spirit. It's just unorthodox as hell, that's all. Three cheers for assaulting those ivory towers. On another level, this book got me thinking about poker in a whole new way. I was impressed by Brown's insights from the get go. He starts by absolutely demolishing that tired old saw, "If you don't know who the sucker at the table is, it's you," and stays razor sharp the whole way through. I have read my fair share of poker books, and 'The Poker Face of Wall Street' has found a way to disagree or contradict something from just about every one of them. Thing is, I have to agree with Brown. His reasoning is just too good to do otherwise. I have always been a fan of top-down thinking, but he has taken big picture poker analysis to a whole new level. (Call it meta-poker, perhaps.) His deconstruction of game theory, and his observations on the folly of viewing all poker players as opponents, are classic. My one small complaint is that some of the poker examples were, ah, mathematically intense shall we say. But then come on, the guy is a quant with a PhD, so he had to show some chops right? This was a very small quibble, and it may just be some uncharacteristic laziness on my part (I read the bulk of the book on a long plane trip). Overall, Brown has the best balance of theory, application and street smarts that I've seen. He's the real deal on all three counts.

This Book Could Change the Way You View Finance

I read dozens of finance books a year. This book rates in my top five for the decade so far. Some reviewers claim that it didn't prove helpful for their trading. I suspect that such comments are a first reaction, and that the ideas this book provokes will indeed help traders. But this book is too ambitious to merely give trading hints. I think it could spur new research and theory, and open up a whole new way of looking at finance. The author is compelling, especially in his historical arguments that gambling and finance have always been entwined. As you read, you want to say "no," but you have to admit "yes." In the future, I expect to hear from big hedge fund performers that this book was crucial to their success.

Enlightening and Entertaining

I'm an investment professional with a casual interest in poker, but have never played at the level (stakes, skill) described by the authors. While I can't speak to the book's value to players seeking to improve their outcomes at the poker table, this book should nonetheless be of real interest to many on Wall Street and others who are interested in learning how the spheres of poker and investing overlap. It's well-written, a fun read and provides lots of fascinating anecdotes.

Intruiging Book

I almost wish this book was less good. I have a huge pile of readings that I must read, but I keep picking this book up because it's so fascinating. The author uses poker as a framework to tell fascinating stories about risk. It is extremely accessible to the layperson, but the information within is of practical worth to the professional. I have no real interest in poker, but it is a perfect metaphor to illustrate that people's perception of risk is just as important as calculating numeric probabilities. From the beginning, the author provides a framework for taking calculated risks, and illustrates this framework with amusing stories from recent history. I would recommend this book to anyone who wants to better understand the decisions that professional money managers make every day. I've seen a couple of negative reviews on this page that said something strange about not wanting to see these concepts in print. What a strange comment! In an odd way, it is the highest praise that one could give this sort of book: that its contents are so valuable that they should not have been given away. In any case, the author is not only an executive director of Morgan Stanley, he's also a well known personality in the world of quantitative finance, with an outstanding reputation for helping novices learn to apply their minds to solving problems. Perhaps those other reviewers could provide more than vague insinuations? Perhaps the most honorable thing would be to simply remove themselves.

Simultaneously lucid yet dense with welcome and instructive detail

Move over William Poundstone (author of "Prisoners Dilemma" and "Fortune's Formula"). John Allen Paulos (author of "A Mathematician Plays The Stock Market") can read this book and revise his own flawed works with this insight. Michael Lewis (author of "Liar's Poker") can stop typing now. There is a new king of lucidity concerning the nexus of games and game theory, mathematics, finance, gambling, markets, and the simultaneously brilliant and frail humans who engage and advance our knowledge of them all. His name is Aaron Brown. Aaron Brown's "The Poker Face of Wall Street" accomplishes the impossible, for it is simultaneously a readable and enjoyable narrative work, yet also dense with mathematical and behavioral finance theory. Nearly every page supplies a lucid thumbnail explication of an economic or behavioral finance concept, backs it up with an appropriate example, often offers an alternative view, and then provides an historical anecdote to expand the concept and make it at once both memorable and familiar. Yet this is not a pedagogic work, but a popular offering for a wide audience of those who are curious or love poker, finance, or both. Brown's method is to use the game of poker as his narrative spine, upon which he weaves the histories and intersections of finance and gambling, economics and risk, information theory and human behavior. He tells the tale of his own love affair with the game, going to the poker dens of 1970s Los Angeles long before there was a World Poker Tour or the Commerce Casino existed. These modest halls (often operating Veterans of Foreign Wars meeting halls) were an anomaly and a pause in history after the saloons of the wild west were tamed and before the leveraged glamour of Las Vegas lured the core tourist and casual poker player away. My own uncle spent his life in such places as a career poker player who made a modest living at the game, but often working ten and 12 hour days to do so, and with not infrequent setbacks. Yet, these nondescript low rise cinderblock buildings were the birthplace of poker as we know it today, and were where the world famous celebrity players of the hour originally honed their skills for today's high stakes televised games from the well of glamour. Yet this is not simply a memoir of a poker great also-ran, but a sound examination on the dimensions of why the game is rational and irrational, tractable yet inexplicable, simultaneously transcendent and incarnational. Familiar poker personalities appear here and there, often emerging again in the work as other dimensions of their contribution to the game become more famous. But the work is not concerned with a recounting of great memories of a silent Cowboy facing a taciturn Chinese, both bluffing, and both betting all-in. Rather, it uses poker to point to gambling, gambling to point to math, and math to point to risk, and risk to point to investing, and investing to point to finance, and finance to point to economics, and economics