Poker vs business

[turnipmonster]

salaries for SW engineers vary a lot (in my experience) based on location and industry. working on risk management systems for energy trading pays a lot better than working on music publishing systems, for example. I didn't think it was severely overstated, but I was also surprised at the google figure as I had heard the opposite ( just through the grapevine though).

--turnipmonster

[sourbeaver]

Still, do you realize how incredibly lucky this guy got ?
You're better off playing slot machines than hoping to float the next Microsoft, if money is all you're in for.

[Alex/Mugaaz]

My only point was comparing Andy Beal to an average businessman or even poker player just isn't fair. I really don't think business is that superior to poker playing except obviously at the upper levels since it can expand and you don't have to supervise it.

Also business owners need to risk the most when they are least capable of having experience. Poker players can work themselves up from the nano limits.

Honestly I think poker playing is one of the best ways to earn (physically work) for cash to use to invest in whatever fashion. Doing a job you love for most people requires being financially independent. I really don't think anyone wants to pay me 100-200k a year to play video games. For me, playing poker isn't that far removed from video games I used to play competitively, so it's doubly rewarding.

Playing poker is just a means. It's pure means. People who think it's an end are the only ones walking down a bad road.

[abcd1234]

[ QUOTE ]
[ QUOTE ]
Broker commission is not the only "rake" involved in short term trading/swing trading. Also add in the spread between the buy and sell price, and taxes. These are also considerations in long term investing but cost considerably less. Almost all money made by traders at large firms is not because of investing skill but by front running their own clients or inside information.

[/ QUOTE ]

You are right, but so what? Taxes affect everyone who doesn't want to go to jail. The bid/ask spread is rpesent in every business. In this thread's example, the McD's franchisees have a spread--the price they pay for food versus what they sell it for. In trading the spread is irrelevant (and also small in actively traded stocks). Do I care if the spread is 19.75/19.875 when I enter if I later exit at 21.25??

As for front running, do I care?

And mplspoker--nice response...Can you elaborate besides saying "no".

[/ QUOTE ]

You seem to be missing some important concepts about transaction costs involved in short term trading. The spread between bid/ask is not the same as McDonalds putting a mark up on the food they sell. And yes the spread does still affect you if you sell at a different price than what you buy - you think the money market makers earn appears from nowhere?
While transaction costs (broker commission, spread, taxes) affect all investors, short term traders are paying a far greater cost making it almost impossible to make money using these technical/swing trading strategies.
My examples of how institutional traders make money(eg front running/inside info) was to highlight the fact that even for those who have greatly reduced transaction costs it is almost impossible to make money short term trading without resorting to suspect/illegal methods.

[scrub]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Broker commission is not the only "rake" involved in short term trading/swing trading. Also add in the spread between the buy and sell price, and taxes. These are also considerations in long term investing but cost considerably less. Almost all money made by traders at large firms is not because of investing skill but by front running their own clients or inside information.

[/ QUOTE ]

You are right, but so what? Taxes affect everyone who doesn't want to go to jail. The bid/ask spread is rpesent in every business. In this thread's example, the McD's franchisees have a spread--the price they pay for food versus what they sell it for. In trading the spread is irrelevant (and also small in actively traded stocks). Do I care if the spread is 19.75/19.875 when I enter if I later exit at 21.25??

As for front running, do I care?

And mplspoker--nice response...Can you elaborate besides saying "no".

[/ QUOTE ]

You seem to be missing some important concepts about transaction costs involved in short term trading. The spread between bid/ask is not the same as McDonalds putting a mark up on the food they sell. And yes the spread does still affect you if you sell at a different price than what you buy - you think the money market makers earn appears from nowhere?
While transaction costs (broker commission, spread, taxes) affect all investors, short term traders are paying a far greater cost making it almost impossible to make money using these technical/swing trading strategies.
My examples of how institutional traders make money(eg front running/inside info) was to highlight the fact that even for those who have greatly reduced transaction costs it is almost impossible to make money short term trading without resorting to suspect/illegal methods.

[/ QUOTE ]

I have a feeling that you're blowing against the wind trying to explain this--that's why I gave up anyway.

Cognitive dissonance pwns.

scrub

[ggbman]

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But that is not to say that one could not take the $100k, $250k, whatever, that you've amassed playing poker, and leverage that money into something that will show you some *real* returns.

Agreed 100%. However, those who also have taken advantage of educational opportunities and other work experience (at the opportunity cost of maybe playing 10-50% less hours) are going to be much better equipped to capitalize on those potential returns.

[/ QUOTE ]

This echoes my sentiments exactly.

[ggbman]

[ QUOTE ]
Law, investment banking, trading firms - these are all jobs in which people who do well are making 200k+ (and in some cases, far, far more) by their mid-20s. Law of course requires 3 years of graduate school and those who do well in investment banking typically spend 2 years getting an MBA. Trading firms generally require no add'l schooling. Software engineers often make over 100k within a couple of years (for the best, Google starts you at well over 100k right out of undergrad). Consulting firms generally get people to over 100k these days by their early 20s.

All of those roles, in my opinion, put people in a much better position to pursue a wide range of career and business opportunities than playing poker does. Yes, I do agree that in a number of those cases, the amount of money you are likely to have in the bank by the time you're 25 is less than the person might be able to bank by playing full-time poker. However, in terms of personal fulfillment and future opportunity, I think these paths are better long-term ways to go than pro poker player for many people.

And, of course, all of those people are free to play poker as a hobby - and often will be able to move up limits much faster than if they were a pro poker player.

[/ QUOTE ]

These are bad examples of low stress alternatives to poker, as you have to work 80 hour weeks well into your 30's at the expense of your social life, much like bottling yourself up in front of the computer all day.

[bdk3clash]

[ QUOTE ]
Cognitive dissonance pwns.

[/ QUOTE ]
Stop stealing my pet-theory-that-I-like-to-jam-into-every-conversation!

[MaxPower]

[ QUOTE ]
My only point was comparing Andy Beal to an average businessman or even poker player just isn't fair. I really don't think business is that superior to poker playing except obviously at the upper levels since it can expand and you don't have to supervise it.

Also business owners need to risk the most when they are least capable of having experience. Poker players can work themselves up from the nano limits.

Honestly I think poker playing is one of the best ways to earn (physically work) for cash to use to invest in whatever fashion. Doing a job you love for most people requires being financially independent. I really don't think anyone wants to pay me 100-200k a year to play video games. For me, playing poker isn't that far removed from video games I used to play competitively, so it's doubly rewarding.

Playing poker is just a means. It's pure means. People who think it's an end are the only ones walking down a bad road.

[/ QUOTE ]

I was comparing the most successful poker players in the world to an extremely sucessful businessman (but not the most sucessful). The fact is that that there are thousands of business owners that no one has every heard of who can buy and sell Brunson, Greenstein, Reese, etc.

If you look at the way Andy Beal made his fortune he was very much the grinder working his way up from the nano limits.

You are right about poker being a means.

[tek]

[ QUOTE ]
You seem to be missing some important concepts about transaction costs involved in short term trading. The spread between bid/ask is not the same as McDonalds putting a mark up on the food they sell. And yes the spread does still affect you if you sell at a different price than what you buy - you think the money market makers earn appears from nowhere?

While transaction costs (broker commission, spread, taxes) affect all investors, short term traders are paying a far greater cost making it almost impossible to make money using these technical/swing trading strategies.
My examples of how institutional traders make money(eg front running/inside info) was to highlight the fact that even for those who have greatly reduced transaction costs it is almost impossible to make money short term trading without resorting to suspect/illegal methods.

[/ QUOTE ]

I'm not missing anything. My point is I don't care about MM's profits or brokerage commissions.

I don't care about the poker rooms rake or cost of food and drinks at the poker room.

My profit from each activity is based on my gameplan working.

Every business has costs involved. Retail stores buy merchandise and restaurants buy food. There are also admin costs, taxes, etc.

Should everyone go home and say I'm not working because people make money off me?

You sir, are an idiot. If you lose money trading or playing poker, then go yell at your wife or whatever...But don' be an Alan Schoonmaker and tell everyone that they can't make it [img]/images/graemlins/tongue.gif[/img]