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Poker Is Really A Miniature Stock Market On So Many Levels
By 519studio
Poker is really a miniature market on so many levels. You can apply much of what you learn from one to the other.


One of the biggest similarities is how little your profits matter. If you make $1,000 in anything it is a big deal, but if you make $1,000 in the market or in a single pot it doesn’t matter. That money can come and go, anyone can make money in the markets or playing poker.

That is why I don’t look at it the same way, one great trade or one good hand can help you out, but it is about the long term. One big win does not make you the king, but rather it is about making consistent money over a longer term time frame.

Here's how that can happen. A balance sheet with a high amount of accounts receivable can potentially show a large, healthy profit. But the accounts receivable are amounts that are owed to the company, not available cash in the bank. If an emergency arises that requires more cash than the company has available (think of a tornado demolishing a warehouse full of inventory, and a high insurance deductible), the company can find itself strapped for cash.

At the very least, if it can borrow money, it will incur a new debt and decrease profits. At worst, if it can't borrow money, it could end up going bankrupt or entirely out of business. So cash flow per share is an important indicator of a strong company.

The demographic trends of the past have just not been strong enough to offset all the other influences on the market.

But this is the granddaddy of all demographic shifts. We have never witnessed anything like this, and I am convinced it is going to be a determinant of asset prices going forward” says Jeremy Siegel, the Wharton finance professor and author of the book "Stocks for the Long Run."

Jeremy Siegel believes the market could crash to as much as 50% of current worth. This would spark a downward spiral in stocks as not only the baby boomers rush to take out their money but also anyone else that wants to salvage their investments will likely sell as well. In light of America’s economic slow growth rates the effects could be as much as double what others are predicting.

However, if you obtain average scores in most diagnostic tests, it means that the probability that you will be able to develop the skills relevant to market trading is high. You are a perfect candidate for tutorial classes run by leading brokers.

To avoid such risks, you must diversify your portfolio. Basically, it means buying a little bit of a lot of different types of stocks and bonds. It is a good idea to have some stocks in the technology sector, telecommunications, biomedical, and consumer corporations.

There are also companies that offer "safety stocks". It will be a sound decision to have several shares of companies such as this in your portfolio. This is because such stocks rarely fluctuate and most often offer a slow and steady growth, thus giving you an assurance in your investments.
See: stockmarket

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