The Ceiling Concept

[warrantofice]

Jimbo could you explain your argument a little bit more. I don't have a business background so your reference to Quant is a little over my head.
And when you refere to
" All the big boys in the market are/could act independently without any of the others"
I don't understand were i discussed investing independantly or not.

(note i was going to write some sort of a response to Jimbo but it turned out as another summary of my previous points. But i love it to much to delete it)

My point originally was about earning such a large amount of money that it become difficult to invest it properly in a given market. So for some arbitary ceiling's i would say that if you were investing your money (i'm from canada) in the Montreal stock market, once the amount of money that you managed grew to, say 100 million dollars, you have basically outgrew that market, but you could move to the NYSE and begin to invest your money there. Because there are more people and larger companies, your investment becomes much smaller as a percent of the entire exchange, thus its easier to make 'smaller' strategic investments. But when the money your investing excedes 500 million dollars then you run into problems again. Not to say you can't still make the same returns as you did with 100 million dollars, it just become much more difficult. You have to be even better at investing that money and your going to be looking at companies that generally will generate smaller margins because there so large and heavily traded.

Tying this back to poker though, the point i am making is that the same principle that occurs in the stock market, occurs in poker aswell. Obv. the poker base is much much smaller than the stock market, so the ceiling becomes much lower because of that.

I think you are wrong if you think that the stock market and poker are different. I think they are very much the same, obvs they have huge differences but the principle of both is similar. Very similar

[Jimbo]

[ QUOTE ]
I think you are wrong if you think that the stock market and poker are different. I think they are very much the same, obvs they have huge differences but the principle of both is similar. Very similar


[/ QUOTE ]

versa but not visa, in other words stock traders seem to be able to become good poker players, wheras there is a lot of evidence that the converse is not as true.

I think you skipped my main point. If there was only one Warren Buffet type guy in the stock market he could make all the money he would ever need, if there was only one Doyle Brunson who would play in the big game he would be lonely and make nada.

Quant funds buy and sell based on math formulaes, unfortunately it turns out most of them using different formulaes come up with the same stocks to buy and to sell at about the same times. So they drive prices up higher for each other when buying and drive them down faster and lower than normal when selling. So they would rather be alone thanhave others at the big boys table and like I said in Poker this will not work without other major players in the game as well.


Just one more thing, a billion dollars is small these days, so 400 million isn't hardly noticed on the major exchanges. This doesn't change your point, just your decimal places.


Jimbo

[warrantofice]

I will disagree with you again Jimbo, that poker players cannot or have trouble becoming good stock traders. I don't mean to be some sort of arse, but i would like to hear what sort of evidence you have to prove 'the converse is not as true'

I could easily write a couple of paragraphs stating why attributes developed in becoming a winning poker player would help in becoming a successful investor. Obv. you can't step right from one to the other, and the 'base' knowledge needed in investing is much larger than poker. however to be a winner at poker there is so many special qualities that must be developed that would help with investing you money in the stock market, something that i don't think all stock investors have mastered but which need to be mastered by a poker player so they don't become a major leak. (I might go into more detail later)

but to summarize the point - distancing yourself for you investment, for a poker player to bluff and play aggressively they must not look at they money as that but rather as a tool or chips used to make more money. This pertains to basic investing in that if you have made the correct choice and you believe the stock still can make money you shouldn't be concerned in a drop in stock price. Or if they need to they can sell the stock and not be concerned with a loss. many good investors have a lot of trouble taking a loss and get to attached to their investments. Poker players learn quickly when you drop a poor investment, be it a bluff or a 3rd nut hand.

Attribute 2: Making the corrected decision, in both poker and investing you can make the correct descion and still loose money, lots of money. But as a good poker player knows, i doesn't matter if you loose money (obv to a point and within your bankroll) so long as you made the correct descions along the way. because so long as you continue to make the correct decisions you will make money in the long run.

Poker players are concerned with long term results not short term results. playing poker you learn extreme displine, you can't or the better people don't play drunk or tired.

anyways i feel like i'm beating a dead horse here. you get the point. i'd love to hear a counter point to this, but i think is pretty comprehensive my argument. obv it riddled with spelling and grammar errors but hey not everyone a broker.

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the rest of your argument.
'I think you skipped my main point. If there was only one Warren Buffet type guy in the stock market he could make all the money he would ever need, if there was only one Doyle Brunson who would play in the big game he would be lonely and make nada. '

the point above is a little crazy. i mean if there was only warren buffet. he would be just as lonely as doyle brunson. and the funny part about that is they would both be old people clinging to pieces of paper that basically mean nothing. Stocks and cards really are nothing, they both get their power/value from everyone agreeing they have value. just like money. So if only warren buffet owned shares they won't be worth a dam thing, unless they were voting shares but you knwo what i mean.

And when i was talking about 500 million, that number may have increased by a couple hundred million, but the problem isn't exactly getting noticed on the market, its the fact that companies that are traded in the $15-$40 dollar range (obv take into accound the multiple the companies traded at) - in and around that value. are generally the juicest stocks to be trading with
because at that level they are established companies so their is less risk of them going to zero but there is also a larger high side too because there is still lots of room for them to grow into zadda zadda zadda. but when you reach around the 500 million dollar mark. your not really able to trade in these companies because you need so many of them to soar for it even to influence your bottom-line. so your forced to trade in the larger companies.

4 cents?

[soop]

In other words the games get harder as you move up?

[warrantofice]

yes and no.

no because its no just the games getting harder but there are less places you can invest your money at a higher return

[rakemeplz]

[ QUOTE ]
yes and no.

no because its no just the games getting harder but there are less places you can invest your money at a higher return

[/ QUOTE ]

Isn't this why that bryce dude is quitting poker?

[Dalek]

The ceiling concept could apply at different stakes - you can only win so much playing 100NL. You could increase this if the stakes became 200NL so you should move up (this assumes your skill in relation to opponents is the same which it wouldn't be). You should therefore increase stakes. If you get to the highest stakes and are still constantly winning, there is no way to make more money per hour (aside from eveyone agreeing to increasing stakes).

However, your argument to then do something else is short sighted. Garbage Men don't get paid as much as Doctors but they don't go 'I want more money, i'll be a doctor'. Poker Players can't suddenely be good on the stock market. Even if they could they may prefer to dedicate their time to poker as they enjoy it more.

[Jimbo]

[ QUOTE ]
the point above is a little crazy. i mean if there was only warren buffet. he would be just as lonely as doyle brunson. and the funny part about that is they would both be old people clinging to pieces of paper that basically mean nothing. Stocks and cards really are nothing, they both get their power/value from everyone agreeing they have value. just like money. So if only warren buffet owned shares they won't be worth a dam thing, unless they were voting shares but you knwo what i mean.


[/ QUOTE ]

After reading this I give up on you. Too stubborn to even try to understand. My last effort and as simple as possible. Doyle cannot make money playing poker by himself, Warren can make a fortune investing by himself. You are constructing a ceiling based on percentages not in absolute dollars so I see no value in that statistic. I can spend dollars, I cannot spend percentages.

Jimbo