Garry Kasparov, the legendary chess champion has written a fascinating article entitled “The Chess Master and the Computer” in the New York Review of Books. The main subject of the article is a precis of a book entitled “Chess Metaphors: Artificial Intelligence and the Human Mind
However, despite the subject of much of the article being chess Kasparov makes some remarkable comments with relevance to the Texas Holdem Investing concept and how perhaps poker may now be the best game for teaching risk.
The core subject of “The Chess Master and the Computer” is how the advent of chess supercomputers has changed the face of the chess world, and in many unpredictable ways.
Game (and Investment) Outcome Space
Early in the article Kasparov refers to the interesting analogies that are used to explain the vast range of potential moves in a game of chess. One of the more powerful metaphors used is that when a chess player attempts to look out 8 moves there are as many possible games as there are stars in the galaxy!
At the end of the article Kasparov then talks about how poker has all of the complexity of chess, with the added layer of incomplete information (chess players can see all of the pieces), which may mean it is a better medium for teaching about making decisions in uncertain environments. Clearly the investment world to be one of the ultimate uncertain environments, thus making poker an ideal tool for learning the core concepts of investing.
Education of Chess Players (and Poker Players and Investors)
One of the unintended consequences of chess supercomputers is that younger players who are familiar with computers can now play and learn against “professional” chess supercomputers from the comfort of their home. The ability to learn at such levels has created a new breed of chess masters, often from unlikely countries such as Norway.
The relevant point here for Texas Holdem Investing is how the internet allows poker players and investors to train at their craft from anywhere in the world – you don’t need to be based in New York or Chicago (for investing) or Las Vegas (for Texas Holdem).
Kasparov also notes that playing chess on computers where there is access to information on the right types of moves and strategies has helped players accelerate and compress the learning process for chess. Kasparov refers to the well-known “10,000 hours to expertise” cited by Malcolm Gladwell, and seems to imply that computerised chess learning has compressed the amount of time it takes to reach the 10,000 hour mark.
This idea is an integral part of the Texas Holdem Investing concept and program. Learning by computer does not reduce the 10,000 hours, it just makes it a lot easier to get there in the shortest possible space of time. Essentially, one can play more scenarios in a shorter space of time, and can access a vast computerised database (the Internet!) of information on strategy improvement.
This theory of fast-forward learning that can be achieved for investors in terms of the key skills of risk management, investing discipline, and emotional control is one of the unique benefits of Texas Holdem Investing (for a longer discussion see “Texas Hold’em Poker – The Fast Forward Button for Investment Training”).
Poker is better than chess for teaching risk in current times
Kasparov finishes off the article with an incredible observation by a former world chess champion who clearly still retains a passion for the game of chess.
Kasparov proposes that chess may be the wrong game for our current times and that poker may be more appropriate. He notes that poker is a game of imperfect information and variable stakes which means that players can learn to appreciate the effects of risk management, chance, and bluffing. As Texas Holdem Investing notes, these are three critical elements in the sphere of investing (bluffing is not always an obvious aspect investing, but try telling that to someone who loaded up on Enron stock based on the reports from management).
The chess master notes that poker outcomes are significantly dependent on human psychology, which indeed is a critical aspect of navigating the investment world. Kasparov feels that perhaps poker can help individuals learn how to take risks and so the mass take-up of the card game is not a bad thing.
According to Kasparov learning poker can teach people that there are no rewards with out corresponding risk. This is one of the most vital lessons that must be learned before putting your money at risk in the investment world. Texas Holdem Investing shows how to systematically approach learning poker so that you can embed this lesson into your mental circuitry before swimming with the investing sharks.
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One important element which makes poker a game of unpredictability is the psychological factor which Kasparov has mentioned. Indeed, psychology plays a vital role in the outcome of the game. It prevents others from making an exact response because they are not sure what they are seeing. And thus, risk is essential.