With a standard deck of cards, there are around 2.5 million potential hands at the start of each game of poker. The key to success is in the decision process—determining how to play a hand, and how much to bet, despite not knowing which cards are in another player’s hand. Like in poker, every investment decision includes at least some degree of uncertainty. What lessons can poker teach investors about sizing their bets, managing risk, and making better decisions for their portfolio?
This episode of The Outthinking Investor delivers insights on the benefits of probabilistic thinking, the best methods for analysing portfolio decisions, and how investors could develop a sound decision-making process for targeting returns - even when facing uncertainty and market volatility.
Our guests are Annie Duke, a decision scientist, former world-class professional poker player, and the author of books including “Thinking in Bets” and “Quit”; Tina Lindstrom, Head of Oil Derivatives Trading for North America at Marex; and Adam Papallo, Head of Implementation Research at PGIM Quantitative Solutions.
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