Blackjack, poker, chess. Have you ever wondered why some of the greatest financial minds excel at all three? From the poker tables of Vegas to the trading floors of Manhattan, Wall Street tycoons have a long walked in both worlds. But the sharpest minds in finance aren't just in it for the thrill. They're making calculated moves based on a deep study of probability, risk, and knowing when to make their biggest bets. It's the same playbook they bring to the casino and understanding how they think about games like blackjack or poker can unlock important lessons for the market. I've been barred from many casinos and ironically the first U.S. casino I was ever barred at is Bally's. This is Boaz Weinstein. He's known for some pretty massive bets, including taking the other side against JP Morgan's infamous London Whale disaster where he was able to make his firm nearly $300 million by some estimates. Like many successful traders, Weinstein is also a gaming prodigy. He became a chess master by the age of 16, and he's a skilled blackjack player with the rare ability to count cards. It's a game that I still, this many decades later. I'm attracted to the challenge of it, of figuring out what the right bet size is, using a certain risk tolerance. I feel like is very connected to a strategy I employ at Saba Capital. I also want to just kind of set some of the, some of the basics here. We're at a table it looks like with a $100 minimum. So I'm gonna bet between $100 and $2500 a hand, and we'll see what happens. Card counting is not a foolproof way of winning. The odds of me at the end of this session, being up with you probably is only about 60%. Okay, let's get started then. Do you show the burn card? We do it if you ask. Yeah, so I'm gonna ask, normally I wouldn't because it kind of says I'm a card counter. I would like to know what's under the, under that card please. - Alright, let's see what's underneath. - Okay. Alright, so that's great. - Six of diamonds. - That's, that's the best card to see. - Okay. - I'll get you started. Best of luck. Please. Card counting is frowned upon by casino owners, but it's not illegal. In this case, Weinstein's childhood friend owns the casino, so today we get a rare chance to see how he does it. In blackjack, you try to beat the dealer by getting as close to 21 as possible, without going over. Card counters are like star traders assessing risk and reward at every turn. Both use probability to make informed guesses about the future, placing the right bets at the right time. Here's how it works - Most systems group cards into simple values - plus one for low cards like two through six. The value is zero for middle cards like seven, eight, or nine. And negative one for high cards like 10s, face cards and aces. Every time a card is played, these values are added to get you what's called a raw count. Let's just say the dealer played a 10, a king, and an ace. Since each of those is worth negative one, added together, our raw count drops to negative three. When the count is negative, it means there are more low cards than high cards left to play. So the odds are working against you, but a high count means more big cards are coming, which could give you an edge, but it's not that simple. Dealers have more than one deck of cards. To get to what's called the true count, we have to divide the raw count by the estimated number of decks remaining for the dealer. In our case, let's just say there are three decks left in play. So our count is negative one. That's our true count, and you have to track all of this in real time across multiple hands for hours without making a single mistake. Are you aware of what the count is as I sit here with you? Okay, but what's so neat is like, I'm like, it's so negative. There's so many little cards that are going to come out. So many little cards came out Six to zero, okay? But we were due for it. We were due. And so this kind of thing of knowing the future, everyone wants to know the future, right? And so that's one of the meta pleasures of card counting because so rarely in our life do we know the future. It's a game of patience. I would say a lot of things are a game of patience. Even if people don't realize, you know, like investing you could say is a game of patience. It's not so easy to find ways to beat the market all the time or often or at all. I think blackjack may teach patience and we're, we might be sitting here for an hour before I make a big bet. Did you know you'd be good at it? I was always very good with numbers, mental math, even from baseball cards, batting averages. All right, so now we, we have 11. Basically you always want to double your bet when you have an advantage. Here we know we have an advantage because we have 11 and the next card we always think is 10, right? So 21. Card counters know they have an advantage when their true count is higher than three. That means a lot of low cards have been played and more face cards and aces are left in the deck. This is when Weinstein knows he can make a bigger bet. So in investing, if you know you have an advantage, if you smell that there's something mispriced, you want to make a bigger bet, here, even though we're in the middle of the investment, right? We get to double down, okay? And we're going to hopefully get a 10. It's the hardest double down because we're up against the dealer 10. We didn't get everything we needed and we managed to tie, which is actually okay. So like betting your edge is such a good training ground for this game when you get to Wall Street. The problem with investing in stocks is you don't exactly know if you have an edge. You think Facebook stock's cheap. You think Uber stock's cheap, but you're going up against the collective wisdom of the entire market. One of the interesting laboratory experiments in blackjack is we know what the odds are and given the odds, we can come up with a perfect bet given our risk tolerance, given our bank roll. In investing, it's, it's harder. Weinstein invests in something called closed-end funds. This is simply a bunch of stocks or bonds packaged together and listed on an exchange. A fund can trade on the market like a single stock sometimes at a discount. For example, the market price for the fund might be nine dollars a share, even though the combined value of the assets inside adds up to $10, that underlying value is known as the net asset value. And buying at a discount means getting more for less. That's where Weinstein sees opportunity. The reason blackjack is very similar to what I'm doing in closed-end funds is what I love about closed-end funds is I know the counts. There's the counts in blackjack, there's the discounts in closed-end funds. You know we're sitting right now at flat count, actually. We're at net asset value. Exactly. You're good at this. When there's a discount, the investor has an edge, and in blackjack, when there's big cards to come, the player has an edge. And so we know what the edge is in blackjack, we know what the odds are. In closed-end funds, there's uncertainty, but we know how cheap we're buying something. Just like any other Wall Street investor, Weinstein will wait until he finds his edge, in this case the discount, to place his biggest bet. But whether it's blackjack or investing, having an edge is never a sure thing. You can't control the next card or the market. You just try to play the odds when they tilt in your favor. I think it's almost as close as you can get from a casino game to a Wall Street investment. How long did it take you as an investor to not get emotional about markets? I think some of it comes from even this game that I lose so frequently and I think one good thing about sports and about games where losing is a part of it, you never have like a perfect record is that it teaches you to regulate your emotions in that way. Okay, we double down before 11 against 10. So now we just won $400, but plus the double down is $800, and so we are now ahead. Fist bump, a little fist bump, we're ahead. Luck is a major factor. You can't be upset when you lose money on a good bet. I think in in these kinds of games, people think luck plays a huge role, and it does. And in investing they think it doesn't. They think they're right because they were smart and I think luck plays a very big role and it takes a very long time to be able to separate who is lucky and who is good. For Weinstein, the intersection of cards and finance isn't just about hard math, it's about time, discipline, and emotional control. To play the long game you have to endure losses, sometimes substantial ones, and still trust that the edge you've calculated will ultimately work in your favor. So what was the hardest time you've ever lost money? It was 2006 and we were never not up a lot. It was the rapid fire loss of a few hundred million dollars where I just never had that happen before. I think one of my talents is the ability to process tough times and see the bigger picture. And I think some of it may be connected to feeling lucky as a kid to have been born, you know, coming from a place where my mother being born in the Warsaw ghetto, her odds of surviving just simply being a Jewish person born in Poland, out of 3 million Jewish Poles, only 150,000 survived. So understanding that as a kid and feeling so lucky that I'm here, I think that, also plus the learning about loss by games, I think helped me be able to process losing in the markets and trying to keep a cool head We're getting near the end. That is, this is the last 10 I should have put more out. - Okay. - I thought we had one more hand in us. Here. Now, hold on a second. Hold on. Dealer. If it's okay. The reason we made the biggest bet of these multiple hours we've been sitting here is there were extra 10s and aces. - Okay, - Look at the three cards on the table. - 10s and aces, - Right? And that is, and it's so nice that we end here because this is one of the great joys of knowing the future a little bit and we're so rewarded because if the dealer had the ace, we can only lose our money if we get the blackjack, we get paid 150%, at least one of these is going to be a 10 for us, and you're not gonna have a blackjack. That's what we want. And then we end super strong. Okay, we're already ahead and we can end up way ahead. Let's see what the face card is. Starting with four. Blackjack. Another blackjack. Oh my god, this is amazing TV. - Okay. - Oh my god. Blackjack teaches us how to wait for the edge. It's a numbers game, where probability is known, and optimal moves can be calculated in advance, but poker, poker is different. It's messier, less about certainty, and more about psychology, reading the table, managing incomplete information, and adapting on the fly. It's a game that's less about fixed edges and more about risk, bluffing, and knowing when to fold or go all in. Hi guys. - Hi. - Hello. It's so good to see you. Today, I'm sitting down at the table with two players who know this better than most. Liv Boeree - astrophysicist, top female poker player in the world, and Galen Hall, a former poker pro who went on to start his own hedge fund. Lucky for me, we're not playing for money, just my pride. I don't exactly know what I'm doing here. That's fine, neither does Galen. It makes it more fun. That's not what I heard about him. How did you guys meet? Is one thing I wanted to know. I seem to remember we were playing some World Series of Poker tournament, and you were at my table. I think I told you you looked like a model. - Yeah. - And then I seem to remember getting all your chips. Then she got all my chips shortly, shortly thereafter. So you flattered him into losing money. Hey, I was telling the truth, but yes I learned an expensive lesson that day. Don't let your guard down. So funny. So I, since this is our first time meeting too, I have a lot of questions on how you got into this because you were in the investment world also. Yeah, I, I was a poker player first, and then I went from poker to finance. So did you see similarities? Yeah, I mean there's lots of similarities between poker and running a hedge fund. In both disciplines you have to constantly be asking yourself where does the money come from? Every strategy that we build at our firm, the basis of the strategy is some player in markets that we think is doing something non-economic. So it's not necessarily like they're making a mistake but they're, they're buying something for some reason other than, oh I think this is under priced or overpriced. And so we just try and build a map and trade around those. Poker players look for patterns, for tells, for players acting on emotion or pressure rather than logic. Hedge fund managers do something similar. They build strategies not just around market fundamentals but around the behavior of other participants. Institutions forced to sell, index funds with mechanical rules, or traders driven by fear. Like poker pros, they're not betting on what's right, they're betting on how others will act. There's an old adage of if you can't spot the sucker at the table in the first 30 minutes, than you are the sucker. Am I the sucker? - We'll see. - We'll see. We'll see. Okay. Should we deal? Yeah, let's do it. You have 680 in chips. So action on you. Check or bet? Check. Okay, fine. So conservative, I'll check. Boeree is now retired from playing professionally, but recently returned to the World Series of Poker, winning $2.8 million, and setting a record for single cash prize won by a female player. Liv Boeree, with that $2.8 million sets a new high watermark. I mean I technically retired five years ago and like talking about like the, you know, the new wave of poker where everyone's playing in this game theory optimal style. Like, I'm so bad now compared to how I was like seven years ago because I just haven't been studying. So I came in with a very different attitude, which is just like, I'm not a pro anymore. I'm not going to do any studying and, and try and, you know, play optimally. I'm just going to play purely by like feel. Poker was once driven by instinct, bluffs, gut feelings, and reading your opponent. This is the root of game theory. Everything changed in the early 2000's with the rise of online poker. Suddenly, players had access to vast amounts of data and sophisticated tools. For the first time, computer programs could simulate millions of hands, testing and refining strategies against every possible response. These simulations didn't just guess, they were calculated responses to play mathematically perfect poker. The result was something called game theory optimal, or GTO. A style of play that makes a player nearly impossible to exploit. Because if you're using mountains of data to play a mathematically perfect game, it's like you're a robot with no tells, and no obvious weak spots. It used to be all about street smarts, and like hustling and, and intuitions. It was a very intuitive game and almost more like an art. And then because of this like data revolution, you could save all your hand histories, and then build tools to analyze them. You had these, you know, 19-year-old computer science or math majors in college who had played a million hands online, more hands than anybody else had ever played before and mostly just dominated the old guard. Basically like a scientific revolution - Yeah. - in poker. Oh wow. - That's a strong hand. - That's very nice hand. What a start. Just, just basically the nuts. - Okay, I needed the confidence. - There you go. - This is good. - Yeah. That's the thing, poker's all about cultivating an image with people that as long as you're aware of what they think of you now, and you've set that up sufficiently, then you can deviate, - Right. - and get them. So maybe you're playing the long game. And so are markets. You could argue that markets also are about your image, and what you're projecting - to the world. - Yeah, exactly. And that's the dream where you can, you know, you can go short something, tell everybody that you're short and then everybody else - goes short too. - Follows you into it because they believe you. Okay, so let's do the next hand. - So you, - I raised. You raised, okay. - To 20. - To 20. Now it's on you. So that means I put in three. - Yeah. - Okay. And then now I will do what I often do and I will make it 160. - Cool. So, do you always do this? This is a thing he does? Well, he does it a lot. Gaylen is what we would call a, a loose aggressive player. - Generally speaking, - This just seems aggressive. No, he's, he's an aggressive player, but it's, it's a very good strategy to be in general, because if you are aggressive, you're giving yourself two ways to win a hand. Well, that's the fun of poker is - You made it how much? - What are you like? What are your opponents like? What is the appropriate frequency and strategy to pursue in order to win the most amount of money from your opponents at this moment in time? There's another big similarity between poker and markets is it's really important to be introspective and know what you are like at the core as a person, and how you sort of play the game and where your internal biases are. So, when you went from poker to the world of hedge funds was there anything you took with you from poker that helped you in hedge funds? Yeah, so the, the one part that translates there is of course the where is the money coming from question. Where in poker you always have to know where your money is coming from. And in, in our fund, every strategy we have, we have a player in the market we think that we're making money off of. But the other thing that is really helpful is playing poker professionally is like speed running a visceral reaction in understanding at a deep level what variance feels like. You can study all the stats you want and you can run all the simulations and Montecarlos, but like until you've flipped coins or like you've been in situations that are like 50/50 or 60/40 for lots of money and you've lost 20 in a row, you just can't know what that feels like. And every great poker player this has happened to them, not once, not twice, but many times. They've just gone through unbelievable swings of catastrophically bad luck, incredibly good luck. And you really develop like a zen robotic ability to disconnect your brain from the results and just think, am I making good decisions? Are these decisions reasonable? And whatever happens after that, you don't care. That's only something you can get through, just like living through this, having your like embodied feeling of like how the odds are. Having your emotions sufficiently calibrated to probability - poker is one of the best and maybe only ways of having that. Like in markets you have, it's like if your hedge fund runs a too sharp strategy, that means you lose money in 2.5% a years as an actual person at that hedge fund running that during that year where you lost money. It feels insane. It feels like, like you don't understand how the world is working, it just, it feels like you are going insane. Having that experience from poker really prepared me for like the swings that you have in a hedge fund. So, they say that markets are becoming a lot more gamified. You think about the apps, and remember when Robinhood started, there was a huge controversy around whether it's too gamified. Do you guys think that it is too gamified? And if something's too gamified, does that create a problem? It just creates an opportunity for us, you know, in, in some sense that's what a hedge fund is, right? We're like, we're playing games. If people invent a new game that they want to play, great. Let's figure out who those people are. Let's model out their behavior, and then let's try and beat them at the game. Especially during the pandemic, they decided they want to like gamble in the stock market, and treat it like a casino. Like, okay, we can be on the other side of that. The fact that the market has all these real world implications and there are people who can be taken advantage of people operating on information asymmetry. If that becomes too extreme, then it seems like it's not going to be sustainable. You think about it, it's not just the market anymore. Now you can bet on kind of anything, right? If you think about these election betting platforms, I actually think prediction markets are fantastic because, you know, we are in this sort of era of informational breakdown. It's so hard to sense-make about what's true and what's not. Like if I want to know like what's the likelihood that this thing, you know, some big political things happened and someone makes a statement about it, I would go on like one of these prediction markets to see what, what the market says as a way of thinking. Because it's kind of like a hive mind is like the wisdom of the crowd. I think part of the worry, right, with some of these betting markets or even the gamification of markets, is addictive personalities, people betting more than they're able. How do you think about that scale? I think that an introduction of a modest amount of gambling into most people's lives, for many people would actually be a net positive, because it would teach them to think about how to weigh uncertain outcomes, and where their biases lie, and decision trees and things like that. Whereas, like I think most people go through their lives taking way fewer risks than is optimal for them to what they want to achieve their, their goals. There's just like a fear that people have of, of risk taking and obviously like, you know, risk taking comes from a place of privilege, especially your ability to take risks. But even on like very small scales that you think about dating or relationships, people don't take enough risks. I think a little bit of like poker at an early age. - I see what you're saying - helps people think about that. It gives people statistical literacy, right? Some things are just much more likely than others. And like anything that trains people to understand probabilities and just think through things with that, like with a greater degree of nuance and granularity than it either does or it doesn't happen. I'll just leave it up to fate, like, is a service to humanity. So the line between a professional gambler and a Wall Street trader is thinner than we think. They're two arenas where fortunes are won and lost, not by chance, but by preparation, patience, and grit. What sets them apart isn't luck. It's the ability to tolerate risk, to trust the math, and to keep playing long after the losses. Both worlds demand sharp calculation, mental resilience and the ability to act under pressure. The best players and the best traders don't just manage risk, they embrace it. And in games of uncertainty, understanding probability and staying calm and volatility isn't just an edge, it's everything. So let's see. Let's see it. Great. Oh, oh, oh, look at that. I've got small maximum value. Nice.