As a chessplayer, you have the attributes of a Wall Street trader

Boaz Weinstein’s opening move on Wall Street came as a result of chess. A bold statement  which is worth thinking about!

"Chess helps in trading, Mr. Weinstein said. To become a good chess player, he learned to focus on how he made decisions because he could not calculate the results of all his possible moves. Learning to deal with that uncertainty or risk has been useful. When you make an investment, “you can have an 80 percent chance of being right. And then the 20 percent comes up. But really it is the process that you used to make the decision", he said.”

These extracts are taken from the DealBook section in the New York Times as reported on 29 September 2011.

Let's face it, chessplayers are often viewed as "supergeeks" who have only the most tenuous grip on reality. But let's sift through the article a little more to find out why a chess player (such as yourself, for example) may indeed possess attributes which may lead to success in the business world. Thus:

“So many people in the investment world have bull-market mentalities. They do well when things are going well - Mr. Norwood said. In chess, he said, you are constantly facing setbacks, and the people who become great players learn to overcome them."

Here is the only part of the article's thesis that I take exception to. Why do we have to exclude the majority of the chess-playing fraternity from the argument? You don't have to be a "great player" to have have the attributes as described. It takes a certain amount of courage to even begin a chess game - with all the attendant potential humiliation of losing, the necessity of concentrating in a way that is quite beyond the majority of the population and so on.

So what other analogies are there between chess and investing? Here's what Mr. Hirsch, the founder of Seneca Capital, says:

"memory, pattern recognition and the order in which you play moves are important in chess, and the same is true in investing".

Apparently, Boaz Weinstein, who I mentioned at the beginning, often considers "chess players when hiring" - so maybe you could yet retire "a multimillionaire at the age of 40" as did one David Norwood, a well-known Grandmaster.

"Go for it", say I!

You may be interested in one of the comments made on the article by 'Michael' from Montreal, thus:

"If we deconstruct chess we find that all chess can be defined as a "chain" of moves. From the beginning to end this chain of moves is defined by the present state of the board. Aka past moves have no impact on the next move. Of course one might question the logic of this. "Don't chess players plan their attacks?" the answer is that yes they do. But no matter what your last move was your current move is entirely dependent on the present location of all the pieces.

This is the definition of what is called a Markov chain, a probability model which depends only on the current state of your sample. Markov chains are the one most useful probability models in the world and can be used to model anything from weather systems to financial markets.

Chess by itself cannot give a person the tools to deal with financial markets (as noted in the article) but it does give people a certain intuition and imagination which can help people grasp the complex prediction models that are oftentimes extensions of or based on Markov chains".

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The Chess Gods - Part 2

2011 Grand Slam chess tournament - the São Paulo first leg

I have already given some my own impressions during the tournament here. Now that the first leg is over, I have more things to tell you.

When I was there I managed to get Vasily Ivanchuk's autograph - quite a good choice in view of the fact that he was the tournament leader after the games in São Paulo had finished ie he was ahead of Anand and Carlsen at the half way stage of the 2011 Grand Slam.

1. Vasily Ivanchuk - 10
2. Hikaru Nakamura - 7
3-6. Levon Aronian, Viswanathan Anand and Magnus Carlsen - 6
6. Francisco Vallejo - 3

His game against Aronion in Round 4 was particularly exciting. You can see the moves and a full commentary on the game at ChessVibes which sets the scene nicely as follows:

"When Vassily Ivanchuk is in top shape he can be the world's best player - at least for a while. He already proved this back in 1989 when he won the Linares tournament ahead of Karpov, aged 19, and two years later he repeated this when Kasparov also participated - who famously lost to Ivanchuk in the first round, in a 3.Bb5+ Sicilian. Another good example is the MTel 2008 tournament which Ivanchuk won with the superscore of 8/10.

After becoming 3rd at the World Cup, everything is going Ivanchuk's way so far in Sao Paolo - this time even luck is on his side! On Friday, in terrible timetrouble he missed a winning continuation against Levon Aornian, who then, with enough time on the clock, blundered to lose anyway. After drawing with Nakamura in the first round this was the third consecutive win for Ivanchuk. Especially with the football score in use, victories taste very sweet in this tournament."

I like Ivanchuk's comment about his strategy for the second half of the tourney. He explains that he will avoid any attempt at an overall strategy, in favour of simply focusing on each match as it comes. One interviewer suggested to him that, in view of the fact that "Hikaru was your closest pursuer, it's obviously very important to beat him in your head-to-head match". The reply was "No, because each game ... I'm trying to be very concentrated on each game, it doesn't matter who's playing against me". As we are always told - "play the board, not the man"!

Ivanchuk also impressed by being strong enough to recover from the effects of a robbery as he was leaving, or I should say, trying to leave, São Paulo - he won his first game in Bilbão against Nakamura! Here is ICC's take on the affair (they call him the 'Samba King'!).

"On a sad note, regretfully we have to report that Vassily Ivanchuk and his wife were robbed at gunpoint in the hotel driveway before boarding a taxi to the airport to go on to Bilbao. It is believed that the opportunist thief, on hearing on TV that Ivanchuk had won the Sao Paulo leg, may have thought that he already had received the prize money. Thankfully, neither were hurt in the attack, but Ivanchuk's wife's passport was stolen and she had to return to the Ukraine to receive a new one.

Hopefully the incident will not otherwise mar Ivanchuk's performance in Bilbao; and it was nice to hear that in the spirit of the game, his nearest rival and first opponent in Bilbao, Hikaru Nakamura, immediately offered support for his opponent and the possibility of a postponement of their game (should Ivanchuk need it) by tweeting: "Quite disappointed to hear the news from São Paulo about Ivanchuk being robbed. Hopefully we can postpone the game till the 9th."

'WhyChess' has an interview with Ivanchuk about his reaction to the robbery here.

If you want my take on the dangers of an Englishman living in São Paulo, here goes. I enjoy living here with my lovely Brazilian wife. I don't travel around the city much so I'm not in a position to comment much. I do know that the levels of petty crime have dropped considerably over the last 15 years or so. Apparently the criminals don't find that 'gringoes' like me are carrying as much money as they used to (!) - so there is an increased number of professionally organised crimes who target banks and so on.

As many people have said already, most big cities have their dangers. As a couple of commentators put it (on the ChessVibes site)

"One should not be so quick to blame Sao Paulo. I know of four titled players who were robbed at gunpoint several years ago in one of the nicest sections of Philadelphia."

"In 1990, Artur Yusupov (then a world-top player) surprised burglars in his apartment in Moscow, was shot and barely survived. He then emigrated to Germany which he represents ever since".

There are things that city dwellers anywhere should be aware of, obviously:

1. Certain areas should always be avoided, especially at night.
2. Dress down, not up eg don't have a nice watch on view.
3. Walk confidently, don't dawdle (poring over a city map is a dead giveaway).
4. Stay alert, be aware of suspicious behaviour or people following you.
5. If you're at the point of a knife, you should have a satisfactory amount of cash on you, ready to offer them. Don't hesitate in handing stuff over eg your shoes.
6. Offer no resistance to muggers whatsoever. They'll likely be on drugs and will have no hesitation
whatsoever in shooting you. Pride is a luxury you cannot afford.
7. Don't drive with the window down, particularly near traffic lights. Always lock the car doors. Don't leave any inviting stuff on the car seat when the car is parked.
8. Having an old credit card on you to give to robbers is an old ploy. My wife suggests that offering this up could get you in deep trouble if they notice it's out of date. It's common practice to take you to an ATM too - again, you will be in deep trouble when they realise you are trying to play tricks.

The closest I've come to the criminal element so far is when I found a nice gentleman in a car waiting for me when I came out of a bank. He explained that he had to catch a plane and that the lovely coats on his back seat were samples from a show which he had been given but no longer wanted. Did I want to buy any? Well I'm not part of the high society set so I tried to explain that I did not require a dinner suit just now, thank you very much. Ah, but I would be helping him out a great deal if I would fork out some dosh - velly cheap. He got very fed up with me as I, not realising I was basically being asked to be a fence for some stolen goods, started a long and rambling account in (very) broken Portuguese about my circumstances, about how nice the clothes were, how I was really sorry I could not oblige etc. Spoilt his day completely, prob'ly, LOL.

As for the chess at the Grand Slam, well, I tried my hand at a blitz tourney - another of the side events that the organisers provided. I won a couple is all. Here's a video of the blitz tourney. The camera gradually focuses in on the White player doing a demolition job on his opponent on board 008.

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