Bridge is often said to be one of the most challenging yet amusing games in existence. Thus, it doesn’t come as a surprise that some of the most successful and wealthy people in the country, Warren Buffett and Bill Gates included, spend much of their free time playing the game. In fact, Buffett’s screen name is thought to be “T-Bone”, which is just one of many interesting facts about him.
Buffett estimates that he spends about 10% of his walking hours playing bridge, so when asked if he thought there were traits from the game that correlate with business and investing, he definitely had some connections to make.
“The approach and strategies are very similar in that you gather all the information you can and then keep adding to that base of information as things develop. You do whatever the probabilities indicated based on the knowledge that you have at that time, but you are always willing to modify your behavior or your approach as you get new information.”
Buffett easily draws similarities between the game of bridge and investing in stock market. He explains that the strategy of researching first and building a knowledge base and then taking action are important in both instances, and even goes on to say that while in bridge you try to get the best from your partner, and in business you try to get the best from your management and other employees.
“It’s got to be the best intellectual exercise out there. You’re seeing through new situations every ten minutes…In the stock market you don’t base your decisions on what the market is doing, but on what you think is rational….Bridge is about weighing gain/loss ratios. You’re doing calculations all the time.”
I really like what Buffett says here about being rational. While there is a certain amount of intellect that goes into investing, Buffett has said that if you’re in the investment game and have an IQ above 150 it really isn’t necessary— you might as well sell 30 points to someone else. Don’t get me wrong, Buffett isn’t saying you don’t need intelligence to be successful. We know that Buffett holds education and knowledge in high regard, and he suggests that you spend plenty of time reading and learning before you begin making investments anyway. But he is saying that more important than intelligence is “temperament to control the urges” that aren’t backed up by logic.
“You have to look at all the facts. You have to draw inferences from what you’ve seen, what you’ve heard. You have to discard improper theories about what the hand had as more evidence comes in sometimes. You have to be open to a possible change of course if you get new information. “
Playing your hand strategically— in bridge and the stock market— will set you on the path to success. Bridge is a great example of how sticking to a strategy that has plenty of thought backing it up can be fruitful.