In the late ’90s, gambling on Internet stocks was
considered a national pastime. After speculators lost their
“overnight” fortunes in the crash of 2001, they found
alternative frills to gamble with their remaining money.
Since then, Texas Hold’em tournaments ““ like the
technology stocks before them ““ have become a popular
pastime.
While there is no definitive method to measure the newfound
popularity of Texas Hold’em, eager students can find a poker
game being played almost every night.
If you’re interested, why not check the advertising
section of a local newspaper. Similarly, if you walk down
Fraternity Row, you’re bound to find someone carrying a
briefcase of clay chips.
If you live in the dorms, why not look close to home?
Probabilities indicate that if you have more than one roommate, at
least someone will be interested in “learning” how to
play cards. After all, according to the National Council on Problem
Gambling, 60 percent of all adults living in the United States have
gambled within the past year.
While we may be living through a poker fad, the question still
remains: How should student gamblers make money? Is Texas
Hold’em a viable choice, or can students find better
opportunities in other gambles?
For the majority of students, Texas Hold’em should be a
defensive game.
When eight players sit at a table, only one player is supposed
to win the hand. Assuming all players are equal in ability and that
no one leaves the table, over the long-run you are likely to win
12.5 percent of all games. In other words, you should fold before
losing more than your ante ““ 87.5 percent of all hands.
As experienced players sit and fold countless hands, students
may have better odds investing in the stock market.
Much like poker, successful investing requires the nerves to
execute reasoned decisions. After researching a company that is
misvalued by the public, the contrarian’s investment may
yield profit.
Unlike poker, this investment philosophy has an offensive
strategy. If you like the company, it’s your choice to bet.
In contrast, in a Texas Hold’em game, if the player before
you raised, you are forced to act: call, raise or fold.
In the long-run, by selecting each bet, the probability of
making a successful investment should be higher than 12.5 percent.
With this in mind, should students pick stocks or cards?
Even though investing may hold better long-term odds than card
playing, either venue can make or break your bank.
For the seasoned Texas Hold’em players, the current poker
hype is like a daily royal flush. Every night poker sharks can find
tables full of patsies offering both entertainment and an easy
kill.
Concurrently, the capricious stock market gambler can wake up
any given morning to discover that half their net worth has
disappeared.
With a beginners’ understanding of stocks and cards,
should students buy into Wall Street or the local poker
tournament?
While the long-term odds favor investing, either choice requires
practice. For diehard Texas Hold’em fans, online casinos and
local games can start a lifetime poker hobby. Even though money is
always fashionable, finding a profitable venue is much less
flashy.
Daniel Osowsky is president of the Undergraduate Investment
Society. Look for the organization’s columns every other
week.