However, CNN Money tells MHProNews that Einhorn, a billionaire, says poker is for fun, and investing is the tougher sport.
Einhorn said he approaches both poker and investing as if he’s solving a puzzle, something manufactured housing professionals might feel some strong kinship to in recent years.
In both poker and investing, there are things you know: The cards in your hand, a company’s financial statements.
Then there are the things you can have a hypothesis about. In poker: What is my opponent thinking? How does he play? In business: What is the agenda of the management of the company? What is the psychology of the other people who own the stock?
“You can develop a strategy based on what you know and what you suspect,” he said.
And finally, there is a range of possible outcomes. What cards will come? What’s going to happen in the world? What’s going to happen in the markets? He says to put those ideas together, and you can “solve the puzzle.”
There are some big differences however. “With poker, you have a resolution of the hand within a couple of minutes,” Einhorn said. “Whereas, even if the thought process in investing is very much the same, you’re looking at an outcome that could be 2, 3, 4, 5 years from when you make the original decision. And the mindset related to that is very different.”
In any case, Einhorn’s humble about his poker abilities. Describing one big tournament: “I think I got taken advantage of two or three times, but over three days, that’s not so bad. However, I probably got taken advantage of a few more times that I don’t even realize.”
The 46-year-old Einhorn, an American hedge fund manager, is the founder and president of Greenlight Capital, which he started in 1996 with $900,000. Greenlight has generated about a 20 percent annualized return for investors. Sounds like his hedge fund is a safer bet than Vegas? ##
(Photo Credit: Bloomberg/Getty Images)
