It's time for poker players to start putting their money to work.

[lala]

[ QUOTE ]
I will give a little advice, but you have to understand that your questin is like asking -- How do I play jacks in no limit hold'em? Please answer in 5 sentences or less...as you know, its much more nuanced and situation specific than that.

I am talking about developing lifetime habits of saving and investing, as well as developing a lifetime relationship with a financial advisor (something that most people desperately need and few do).

That said, in response to your specific question...investing in index funds is much better than buying individual stocks for an investing novice. During most environments it is hard to go really wrong this way. You are rarely going to make big returns (e.g. 40%+), but the same can be said of big mistakes.

The key caveat is that every 15-50 years we end up in an environment where even indexing is dangerous. The year 2000 was an obvious case...many people began indexing to the Nasdaq during this period and lost 80% in short order. I cannot tell you in an internet post how to identify when you are in an environment with the potential to inflict this kind of damage. My current opinion is that we are not in that kind of environment today.

[/ QUOTE ]

well diversification is the key when buying index funds. Anyone who lost a lot in 2000-2002 was just gambling in tech stocks/megacap, and a diversified portfolio with large/mid/small/int'l funds would have held up a lot better during this period.

[Scorpion Man]

Better....but still easily 35% .... i would have to go back and do the math. Emerging markets were horrible too. The simple fact is that in the bubble most young guys like people on this forum would have gone the tech route.

[critikal]

First off, congratulations on all of your success and what not. I'm wondering how I go from someone who does not know very much about investing, to someone who could potentially make a career in it (the field interests me). What helped you get started? After getting started in the field I'd assume work experience/some natural ability carried you up? Do you have any books or other resources that you would reccomend?

Thank you for your input/general advice in this thread.

[Scorpion Man]

Hmmmmmmmmmm. That is a lot of questions, some with not very short answers. Trying to be brief:

How did I do it?
Worked my ass off from very early, great grades (all the way through), went to (IMO) the top 2 schools in the country, one for undergrad, one for MBA. Had good jobs every step of the way (started a successful business between summers at school, worked for a consulting firm my last summer).

Post MBA I identified a young and growing field (hedge funds) and focused on it when others were not (they are now, however). I also had a ton of drive and worked my butt off at those jobs and, most importantly, performed in terms of investment acumen.

In terms of getting started, you have to be genuinely interested. I bought my first stock when I was 10 years old ($40 total purchase). I was the only kid at summer overnight camp who got the investor's business daily mailed to him (sad, I know). The way you guys feel about poker and are this board debating things...it sure helps to be that passionate about stocks. This will show when you interview for jobs.

It is hard to answer your getting started question without knowing anything about you. The answer for someone who is a senior at Harvard with a 4.0 GPA is very different than the answer for a 33 year old unemployed poker player. If you tell me more about yourself, I could give you a better answer.

For starters...read everything in sight. Start with the Wall Street Journal daily, and include books. To make a career in investing you have to understand accounting for sure. It very much helps to understand finance, although its not 100% necessary (but its probably hard to get a job without it).

Also, the question of how to learn to invest on your own is very different than the question of how to get a job investing. I loved it. Investing in stocks has a lot in common with playing poker. You also get to be very knowledgeable about the world around you and have the responsibilty to ask, at every turn...how does this busienss make money? How do they defend their market position? What is happening to their pricing power and inputs? An MBA helps frame these questions...although I have not figured out if getting an MBA from a second rate school is worth the time and cost.

I will recommend books to you if you reply and tell me what it is you are trying to accomplish.

[critikal]

Thank you for the reply.

As for background information, I'm an 18 year old college freshman just starting out at a state school. My Major won't be declared until junior year (need to apply to the business school) but I'm planning on doing either Finance, or Management Information Systems with Entrepreneurship. I'm not making too much from poker, but currently manage my college fund.

The kinds of books I'm looking for are books that will give me the basics. I know very little about how the bond market works, how short sales work, futures etc.


edit: hit submit too early.

[Scorpion Man]

Good. You are still young and haven't screwed things up yet.

#1, get great (not good, GREAT) grades. if you don't do this, it makes everything infinitely harder

#2 do everything you can to separate yourself from the rest of your class..this can take many forms, but in some ways its similar to getting into college -- "extra curricular" activities matter. So do the summers.. a LOT. You are going to be competing against all the other college grads...you have to have a story to tell about your summers that is a combination of interesting, relevant to the jobs you want, and impressive...i.e. shows your prospective employer that you will work harder and smarter than the other candidates.

#3 Get educated about your chosen fields. If in an interview you can mention you have read 100 investment books and have been investing your own money (even if its very small) for years, you are much more credible than other candidates that cannot say either.

This is a start. PM me with any other specifics.

good luck

[Newt_Buggs]

[ QUOTE ]
I guess my question is this -- is there enough of a base of poker players out there that one could create a boutique financial practice catering to their particular needs and questions -- combo of tax planning, investing, and given their age (if they are smart enough to listen) -- advice on overall spending and financial management.

[/ QUOTE ]
I don't know about the rest of the forum, but I'm very interested.

[hedgeyerbets]

Whay do you want to do this scorp? It seems like it would be much less lucrative than, and would involve more tedious work (with less time to deal with the actual investment process) than a typical hf pm type role. Am curious.

[Newt_Buggs]

[ QUOTE ]
Whay do you want to do this scorp? It seems like it would be much less lucrative than, and would involve more tedious work (with less time to deal with the actual investment process) than a typical hf pm type role. Am curious.

[/ QUOTE ]
I can't speak for the OP, but I'de assume that if he's retired in his late 30s he isn't very concerned with making money and more with doing something that he views as fun and helpful.