Seidel has moved effortlessly between options trading and
poker playing, using one career as a hedge against the other. He believes that
poker is the tougher of the two vocations, finding proof in the fact that there
are thousands of successful traders but only a handful of guys who can make it
at poker. Still, the two games have their similarities. “Trading and poker both
rely on an ability to not just figure out but to put into effect your analysis
of probability—and to do it very quickly,” says Seidel, who claims to have met
plenty of MBAs with sufficient technical know-how but not enough gambling sense
to fully exploit their techniques. “Different opportunities come up all day
long—in the poker room and in the trading room—and they may be good. But how
good are they? Taking a position—at a poker table or on a stock—is a gambling
decision that requires a lot of patience. On Wall Street you can look at pitches
all day long and not swing until it’s the perfect one. That’s one of my
strengths. I’m willing to pass on things and play small if I need to— until the
perfect situation presents itself.”
There’s also the people game of poker, which easily translates to Wall Street.
“At PaineWebber, I had a boss who panicked whenever things started to go badly,”
remembers Seidel. “He’d say, ‘Anybody here who’s long is fired.” That was always
the buying point. Whenever this guy panicked, it was time to make your biggest
plays. I had to do it in a subtle way, but my boss was the most reliable
indicator as to where the market was going. That happens in poker all the time.
There are situations where somebody loses a critical hand, and you just know
he’s about to go on tilt. It’ll be only a matter of time before he’s broke. And
that’s the moment when you want to go after him.”
Blair Hull’s critical hand was dealt in 1999, when he began negotiating the sale
of his firm to Goldman Sachs, just as he was primed to bring it public. The IPO
road show in Amsterdam was weeks away when interest heated up from Goldman—the
Wall Street giant realized that it would be more efficient simply to buy an
electronic market-maker than to try to create its own. In the planned IPO,
Hull’s company was seeking a market cap of $350 million, putting its leader in a
good position to turn down initial offers from Goldman; the investment firm, for
its part, was particularly drawn to the fact that Hull Trading was a going
concern that would run just fine even after Hull himself was out of the picture.
“We used to say that you could put a grenade in the company, take out every
other person, and we could still go to work tomorrow,” Hull remembers with a wry
chuckle.
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