Posts Tagged ‘David Einhorn’

The One Drop Investor Edition: Volume One

by , Jul 1, 2012 | 5:17 pm

The skill set required for poker and investing are similar. Success at either requires an ability to minimize losses, maximize gains and manage a bankroll. Trading firms and hedge funds often recruit from the professional poker ranks, as this LA Times article, featuring Chris Fargis, explains.

So it should be no surprise that a number of the players in this year’s WSOP million dollar buy-in One Drop Tournament hail from the investment world. Two of the most notable investors that may(?) play in this year’s One Drop are Andy Beal and David Einhorn.

2006 picture of Andy Beal at the Wynn (taken by Amy Calistri)

Andy Beal
Investment Style: Buy Low, Sell High

Dallas Banker Andy Beal was one of the first to sign up for the million dollar charity event. Although a recent post by Gary Wise suggests that Beal could be a no show.

Beal made his first fortune investing in multi-family residential properties, bought for a song at HUD auctions. Beal Bank made another fortune buying up distressed debt in the wake of the S&L crisis. In 2009, Beal moved up to #52 from #321 on the Forbes list of the 400 Richest Americans. He made roughly $4 billion buying up toxic assets after the financial meltdown.|

Beal is no stranger to the poker world. In 2001, Beal took on some of the world’s best poker players in a series of heads-up limit hold’em matches chronicled in Michael Craig’s book, “The Professor, The Banker and the Suicide King.” He reprised those matches in 2006, covered in this Bluff Magazine article.

Beal is a patient investor who always knows how to invest 1000 dollars to turn it into more. But he likes his poker like he likes his cars (Beal owns a number of race cars). He finds nine-handed play tedious. And he likes to push the stakes up into scared money territory. If Beal opts out of One Drop at the last minute, as Gary Wise reports, I blame the slow action of tournament play.

Einhorn at the 2006 WSOP

David Einhorn
Investment Style: Sell High, Buy Low

According to this Bloomberg article, the hedge fund manager David Einhorn is planning to ante up for One Drop.  The manager of Greenlight Capital has made a name for himself by shorting stocks — betting that their price will fall. In 2007, he shorted the investment bank Lehman Brothers. The 150-year old financial services company went bankrupt in September 2008. Lately, Einhorn is raking it in on his Green Mountain Coffee Roaster short.

Einhorn finished 18th in the 2006 WSOP Championship, donating his $600K+ to the Michael J. Fox Foundation. When it comes to poker charity events, Einhorn’s recent track record may be hard to beat. In May, he won the 7th annual Hillel Texas Hold’em Tournament and in March he won the 5th annual Michael J. Fox Foundation Poker Tournament. If you plan on playing against Einhorn, he discusses  his playing style here.