Poker and Picking Stocks OR What every Finance guy needs to know, Part III

In Part II, I talked about different types of poker players / stock market players.

But what do you do to become better at poker (stock picking)?

1) Experience
Play as much as possible, for as little cost as possible. Get to know how the system works, and what happens from one hand to another.

2) Fundamentals
Understand the math behind all the numbers. Both in poker and in stock picking, you need to understand statistics. But with stocks, you also have to understand why people value a stock. You have to consider the profits of a company. Also, you have to understand underlying economic concepts. Understand how the Federal Target Rate, Foreign Markets, Foreign Exchange rates, and commodity prices (such as oil and gold) affect the markets.

3) Knowing the players
You have to know the people, and have to establish a rapport. Sure, if its a one time deal, you can take everyone's money and leave, and maybe knock over some furniture in the process. But if you play a lot, you'll need to be likable and have a reputation.

That's it.

Getting 1 is tough. Many people spend their whole lives trying to get it. Getting 2 takes time as well, and takes a sharp mind to grasp the numbers. Getting 3 takes social grace and some ethics and morals.

The three combined, to borrow from theater, makes you a triple threat, at the poker table, and on the stock market.