How a bridge champ beats the market

Found via Simoleon Sense.

You might say that Brad Moss aspires to be to bridge what Warren Buffett is to investing. It turns out that Moss, a bridge champion (he's never played Buffett but would like to), is a fine investor as well. This 40-year-old uses the skills he's learned playing cards to earn impressive returns at his small but growing hedge fund.

Wall Street has long been home to card players who turn their mathematical minds to finance. Moss, whose team is the ranking 2010 world champion and who is the American Contract Bridge League player of the year for 2010, draws a direct line from the game theory of bridge to his ability to assess investment risks. It's a skill that enabled him in the late 1990s to rack up personal wealth in the millions of dollars as an options trader in his native New York.

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The connection with bridge, says Moss, is the ability to decide what data matter, and then to have the judgment to act on it. "In bridge and investing, you are constantly being bombarded with an enormous amount of information," he says. "The key is seeing all the possibilities." There's more. In bridge, an opponent's tempo of play will tell an expert more than an amateur. Similarly, in investing, knowing which market indicators to monitor, and when, is more critical than watching every piece of information.