Caspar Berry, former professional poker player and entrepreneur, will be speaking about risk and uncertainty at the CISI’s Financial Planning Conference in October
Former professional poker player Caspar Berry will be using poker as a metaphor in his keynote speech, ‘Dealing with risk and uncertainty’ at the Financial Planning Conference on Tuesday 4 October. He agreed to provide us with a preview.
How do you relate playing poker with financial services?Playing poker is just the act of making a series of investment decisions, ie, resource allocation decisions in a terrain of uncertainty. In poker there are allocations of chips (money) into a series of hands and situations with an upside or return (the pot). In life there are equities, employees, relationships ... the list is endless. At a fundamental level the process is exactly the same, although the way the various situations manifest themselves differ sometimes at a surface level. Some people in financial services feel uncomfortable with this because of the connotations of poker – which is a shame I think, because of their essential sameness and the way we can learn anything by dislocation and then application.
Please summarise your talk to give your audience an idea of what to expect. Will you engage the audience in any activities?
I am a former professional poker player who went to Cambridge to study economics. This makes me more interested in the way in which decision making is made in the real world than it is at a poker table. I use poker as a ‘springboard’ or metaphor to bring the subject to life, rather than as a prison within which I'm going to engage people in poker-related anecdotes. I won't be wasting time telling a risk savvy audience how risk operates, which is necessary with some crowds who have to understand risk, but whose specialism lies in other fields. Rather I will seek to show why poker is a valid metaphor – due to the hidden uncertainty of everyday life – before going on to explore a couple of ways in which poker can throw into sharp relief the challenges we face as investors everyday: most notably, the value and impact of emotions in the face of uncertainty and the extent to which we may be underestimating the true nature of the challenge that it poses. To this end, I will be doing a few exercises to show how brilliant – and flawed – our emotions can be.
Describe your poker strategy in five words
Cautious, calm, tight, selectively-aggressive
How would you go about assessing risk in a game of poker?
Simple risk and reward analysis employing simplified calculations with best guess probability values inserted. Some of this is 52-card deck logical deduction while some will always be personality categorising induction. Decisions need to be made relatively quickly, so thinking away from the table is required.
What are your top five tips for dealing with risk and uncertainty?
- Accept uncertainty as a reality, embrace multi-outcome probabilistic thinking
- Be constantly humble and open to new information
- Seek out and consider information and data outside of one's speciality and be open to the interconnectivity of all things
- Don't overestimate the amount of information you have as a proportion of the whole. It is infinitesimally small, perhaps literally. And therefore all probabilities can only be subjective, based upon the fraction considered, but accept it as the best you have and be prepared to make decisions based upon it.
- Beware of outliers: don't over or underestimate them. As best as you can try not to dismiss or exaggerate their impact.
- Be as open to the data of experience, which sometimes manifests as intuition, as you are to the data of spreadsheets, and allow each to inform and impact the other.
How do you identify what the best decisions for you are? What questions do you ask yourself?
All decisions must start off with a consideration of what you want. The decisions we make are the manifestation of our unconscious wants, or at least our strategy to achieve them, however flawed that strategy may be or however different such a want may be from our consciously stated desire. I then need to ask what is unacceptable in my journey of achieving this want. I am not a machine – and neither is any organisation – and so I need rules and guidelines. Next I must reconcile myself to my acceptable short-term costs, risks and pain. This makes such short-term costs acceptable and makes the journey – while difficult – much easier than it might otherwise be.
What prompted you to change careers from a professional poker player to a professional speaker and trainer?
It was more of an evolution than a ‘change’ or decision. I passed through the realm of ‘entrepreneur’ first and this was how I first became aware of the fundamental similarities between poker and business and investment.
About the Conference
The CISI Financial Planning Conference will take place on 3–5 October at the Celtic Manor Resort Hotel, Newport, Wales. This is a 'must attend' event for many CISI financial planning members and Accredited Financial Planning FirmsTM. It provides opportunities for personal and business development, quality structured CPD, the sharing of best practice, catching up with friends and making new connections.
To view the full programme and speaker line-up, visit cisi.org/fp16 where you can book your place, along with any specific sessions that you would like to attend.
We look forward to welcoming our new members from the financial planning community to the conference, as well as our existing members from wealth management functions and firms.