Investing and poker have a lot in common. Both involve a balance of known and unknown information, and both involve updating probabilities when new information is presented. One might suggest investing is slightly trickier than poker given that the “rules” of the game can adapt over time, but at a high level both share a lot of similarities when it comes to psychological decision making. This article from the Wall Street Journal explores the similarities between investing and poker, with help from Annie Duke who used to be on the professional poker circuit before writing the book “Thinking in Bets.” One of the key takeaways from the article is that because poker and investing have heavy “luck” components embedded in short-term results, investors need to focus less on the result-based outcome and more on the decision-based process. Being resilient to short-term noise is a key component of being a successful investor, much like being a long-term successful poker player. Anyone can sit down at a poker table and win a hand by getting lucky on the river card (assuming one is playing Texas Hold’em), but going all-in when the probabilities aren’t in your favour is a surefire way of depleting your bankroll. Investing can be looked at in a similar light. You may have a strategy where your models are right 55 percent of the time and still have an extremely successful strategy. The challenge is that 45 percent of the time you will be underperforming and you’ll feel like folding even when the probabilities are on your side over the long term.