7 Poker Strategies From Warren Buffett (#5 Might Surprise You)

7 Proven Poker Strategies From Warren Buffett Investing Principles

This article was written by blackrain79.com contributor Fran Ferlan.

At a first glance, poker and the stock market don’t share the same conceptual universe. After all, one is pure gambling, and the other is a sophisticated skill game of math and psychology.

In one the successes and failures are at a whim of external forces beyond the individual’s control, and in the other one an individual can overcome both external and internal hardships with the power of patience, perseverance and continual self-improvement. 

One is subject to stringent government oversight, and the other one...Well, they might not be that different after all.

If you pause for a second, there’s a lot more in common between the two than meets the eye. They both boil down to the same thing, and that is risk management. 

There is nothing inherently good or bad with either of them, it’s about how people approach them. 

People that are risk-averse will steer clear, and the ones with higher risk tolerance will jump in head first without so much as a second thought.

Neither approach is necessarily the correct one. Both can lead to abundance or financial ruin. It all comes down to people’s individual temperaments and preferences. 

I’m not sure how Warren Buffett feels about poker (he is an avid bridge player, though), but his business savviness is certainly transferable to the felt. 

If you want to succeed as a poker player, you need to treat your poker like a business. 

And who could be a better source for business tips than Warren Buffett, the CEO of Berkshire Hathaway and one of the best investors of all time.  

Here are Warren’s seven tips to boost your profitability, starting with the cardinal business rule.


1. Protect Your Downside


"Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1." - Warren Buffett

With the abundance of poker material on how to increase your winrate, it might be worth flipping the script and figure out how to not lose money in the first place. A penny saved is a penny earned. 

Granted, losing money in poker is inevitable. If you want to double your money, fold it in half and put it in your pocket. Everything else includes risk. 

Poker players are risk takers by default, some more than others, to be sure. But the most successful ones aren’t the ones that take an exorbitant amount of risk, but the ones that lose the least amount possible.

Think of it this way. 

If you’re crushing your current limit, there’s a ceiling on how big your winrate can be, no matter how good you are. But if you suck, there’s no telling how much money you can lose. 

There’s a limit on how high you can climb, but there’s no limit on how low you can fall. There’s only a small number of ways to succeed, but the roads to ruin are innumerable.

With that in mind, the best way to improve your bottom line is simply avoid making costly mistakes. After all, your poker success will come mainly not from your superior skills, but from the inadequacies of your opponents.

7 Proven Poker Strategies From Warren Buffett Investing Principles
Yes, even the legendary investor Warren Buffett plays a little poker from time to time!

You don’t have to be the best poker player in the world to make money. You just need to make less mistakes than the majority of the player pool you’re up against.

Thinking about how much money you can potentially make is putting the cart before the horse. Most players actually lose money playing poker, especially in the beginning. So if you’re only starting out your poker journey, you should dispense with calculating your hourly rate and figuring out how you can retire early with your winnings.

What you should focus on instead is improving your skills. Money will take care of itself eventually. On your journey you will encounter countless obstacles, and all the money you prevent losing will put you closer to your goals. 

Losing some money is inevitable. The key is not losing any more than necessary.

What this means in practice is you should only play with money you’re comfortable with losing. You should practice proper bankroll management and game selection, and most importantly, don’t tilt away your progress. 

Easier said than done, of course, but think of it this way: every dollar you don’t lose to tilt is a dollar you don’t have to win back by playing your absolute best. 

It’s a lot easier to reduce expenses than to increase your revenue. Every business owner is looking for ways to reduce their expenses in order to increase their overall profitability. 

Poker is no different. You are in the business of making money from poker. And businesses that don’t curb their unnecessary spendings are doomed to go under. 


2. Everyone Can Run Hot For a Time


"Only when the tide goes out do you discover who's been swimming naked." - Warren Buffett

Poker is deceptively simple. Everyone thinks they know how to play, and almost everyone overestimates their skills. 

When everything goes well, it must be thanks to your genius abilities, and when things turn sour, it’s just bad luck.

It’s like when they interview the drivers involved in car accidents they caused and ask them about their driving abilities. Nearly everyone says they’re an above average driver. Makes you wonder where all the bad drivers are, then. 

Not everyone can be above average. It’s statistically nonsensical. Same thing with poker. Visit any forum and everyone seems to be a winning player. 

One of the worst things that can happen at the start of your poker career is actually running well, not bad. When you’re a beginner at anything, chances that you’ll stumble and fail are virtually a hundred percent. 

But with poker, you might be unfortunate enough to run hot at the beginning. You might think you have it all figured out and you can basically print money.

This is something that Nathan talks about in his latest video on his 12 advanced online poker tips.


You’re quite satisfied with yourself, you start calculating your hourly rate, and start counting down the days till your early retirement. You fantasize about quitting your day job and going pro. 

And then, out of nowhere, reality hits you. You encounter your first serious downswing. You pay no mind to it, because after all, you know variance is a thing, and it’s just a matter of time before things turn around again. 

But they don’t. The deck has gone cold, and your previous triumphs are an ever distant memory. 

The worst part is you don’t attribute it to any mistakes on your part. After all, you’ve been crushing it for months. It doesn’t even occur to you that you might be getting outplayed. 

Your frustration builds up, you start playing suboptimally, which frustrates you even more, which causes you to pile up even more mistakes. You start chasing losses, jump the limits, ignore the proper bankroll management and so on. 

Your pocket Aces get cracked a third time in a row, and you rage-quit in desperation. Bad luck indeed. You might want to take a raincheck on firing your boss after all.

Poker is a fickle mistress. Everyone can go on a winning streak. It doesn’t necessarily mean it’s due to their extraordinary skillset.

Everyone can play well when the deck keeps hitting them, but sooner or later, the well runs up dry. 

And this is where the true talent shines through. Not in the times of prosperity, but hardship. Someone who’s been running hot and gets overconfident is in for a bitter disappointment.

Don’t think you have it all figured out. It’s only after you’ve weathered the storms can you see your true results. And the storms are coming. 


3. Think Long Term


"Do not take yearly results too seriously. Instead, focus on four or five-year averages." - Warren Buffett

Poker is a long term game. Unfortunately, the long term is far longer than most people think.
We’re talking years and decades. It’s the opposite of a get rich quick scheme. 

As everything else worth doing, it takes discipline, time and effort. And again, a lot more than people might think. 

When you look at the world class professionals taking down a huge tournament prize, you might think they just got lucky. 

Fair enough. 

Winning a huge tournament does involve a particularly fortunate run of cards. 

But what you don’t see is years and years of playing without extraordinary results, and countless hours of studying, fixing your leaks and trying to improve without immediate monetary reward. 

They call it a grind for a reason.

7 Proven Poker Strategies From Warren Buffett Investing Principles
BlackRain79 fixing leaks in PokerTracker even while at the beach!

If you’ve been playing a while and aren’t quite where you’d like to be in your poker journey, it pays to take a step back and reflect on how much effort you actually put into it, and how much time and energy you’re actually willing to dedicate to it to get the results you’re hoping for. 

A number of players get into the game thinking it’s easy money, and they are soon left disappointed. The bigger the expectations, the bigger the letdown. 

The hard truth is that most people just don’t have enough fortitude to endure the neverending swings and the emotional strain that comes with it. They’re overly focused on the end result, and not nearly enough on the process itself. 

Your progress and improvement as a player should be its own reward. If you’re in it only for the money, you should look elsewhere. There are easier and far less stressful ways to make a quick buck. 


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4. Don’t Protect Your Winnings and Don’t Chase Your Losses


"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." - Warren Buffett

Being a successful poker player means doing the exact opposite of what human nature compels us to do. We are a risk-averse species. We like making money far less than we fear losing it. 

So when we win money, we fear losing it back and want to “book a win”, and when we lose money, we want to win it back to get even. 

This is exactly the opposite of what you should be doing. 

When you are winning, you are far more likely to win more than when you’re losing. If you’re winning, it means that either you’re playing your A game or the games are soft, or both.  

What’s more, you’re in a good place emotionally. You feel good, you’re relaxed, and you’re far less likely to be making mistakes. 

You’re more comfortable taking calculated risks, pulling off a big bluff you wouldn’t usually be comfortable pulling, or calling down your opponent far wider than usual because you feel you have a good read.

Conversely, when you’re down money, you’re far more likely to be emotionally compromised in some way or another. You’re a human, after all. 

Nobody is totally immune to it. Are you more likely to tilt if you’re up or down three buyins?

It’s not really a surprise by any means that your emotions affect your play and vice versa. But people are usually more inclined to cash out exactly when they should continue playing, and hang on exactly when they should call it a day. 

They either get overprotective of their winnings, or overly focused on getting even. It’s understandable, of course, but it’s hardly an optimal strategy. 

Whether you are up or down is totally irrelevant as we just discussed in the previous section because if you play enough hands, using a simple proven poker strategy, and don't tilt, your graph will look like this.

Stock market trading and poker

So, the only thing that actually matters is whether or not you are able to play your best game and make good decisions. 

Like the great Dusty Schmidt once said, if the games are good, I’ll tape my eyelids open if it keeps me at the tables.

The games aren’t always going to be good, however. Most of the time they’ll be quite slow. 

But every now and then, the poker gods will send a huge whale to your direct right. Maybe even a pod of them. (A group of whales is called a pod. The more you know…)

When that happens, you don’t just double up and go on your merry way. You stay there as long as they’re willing to donate their money to you. 

All you have to do is stay there, and most importantly, have a sufficient bankroll to endure a couple of suckouts and bad beats you’re bound to encounter. 

Opportunities come to those who are prepared for them. So get a bucket and count your money.


5. Keep it Simple


“The business schools reward difficult complex behaviour more than simple behaviour, but simple behaviour is more effective.” - Warren Buffett

If you’ve been playing poker for a while and haven’t achieved the results you’ve been hoping for, it’s natural to assume you’re doing something wrong. 

You know the winning strategy, you have a good grasp of the starting hand selection, and you don’t go on insane monkey tilts, but you’re still not making bank. You must be missing something. 

So you start reading into all the latest cutting edge strategies and turn to the pros to provide some answers. 

You learn about solvers, blind defence, optimal turn betting frequencies, check-raising the river as a bluff, light 4-betting and all that jazz.

There is nothing wrong with studying some advanced poker strategy, of course. It’s crucial for you to keep learning and expanding your knowledge base. 

The problem is that the knowledge needs to be built on a solid foundation. You can’t build a house starting with a roof.

This is something that Nathan talks about in his popular 14 poker beginner tips video.


A lot of players are quick to assume they have it all figured out, but have glaring weaknesses in understanding even the most basic concepts. 

It’s better to underestimate your knowledge and be pleasantly surprised with your results than the other way around.

The second problem with reading too much into fancy math is that it’s often not even applicable on the felt in real time. If you like the math minutiae, more power to you, as poker essentially is one complex math problem. 

But the vast majority of the time it’s no more complicated than what you learn in grade school. It’s just odds and percentages, and that’s good enough. No magic required. 

Remember that poker is a game played against other people, not robots. And it hasn’t been solved yet. For every strategy, there is a successful counter-strategy. 

So your success isn’t predicated on being a math wizard, otherwise the best poker players in the world would have a math or a physics degree. 

If you aren’t playing mid or high stakes, chances are that delving deep into the intricate mathematics is a waste of time.

It’s kind of like studying technical stock analysis. You try to figure out the trends and patterns, but you’re still making educated guesses at best. 

It doesn’t take a genius to recognize a good business. It also doesn’t take a math degree to be a consistent winning poker player. 

Keep it simple, focus on the fundamentals, and work off the felt to plug your leaks by using a program like PokerTracker for example. 

It doesn’t have to be any more complicated than that. 


6. Have a Healthy Bankroll


"Cash ... is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent." - Warren Buffett

You need to have money in order to make money. If poker is your business, then your bankroll is your inventory, and your skills are the edge over your competition. 

You can’t make a profit without a sufficient bankroll anymore than you could make a profit as a retailer without the merchandise. 

You also can’t profit if your skills are inferior to the general player pool you’re up against. If you are the sixth best player in the world and play against the top five players in the world, you’re going to lose money. 

So there’s two lessons to be derived here: first, have a sufficient bankroll for the games you’re playing, and second, only play in games you have a reasonable chance to win. 

It’s better to err on the conservative side.

7 Proven Poker Strategies From Warren Buffett Investing Principles

Overconfidence is the bane of every business, poker included. Eat some humble pie. 

It’s better to underestimate your abilities and make a small profit, than overestimate them and suffer a huge loss. You don’t have to learn every lesson the hard way.

It goes without saying that you should only play with money you’re comfortable with losing. If the thought of losing a hundred percent of your investment is causing you anxiety, you’re playing in the wrong games. 

The success or failure of your endeavour hinges on you making the best possible rational decisions at any given moment, and that ability can be easily compromised by emotions such as doubt, fear or outright panic. 

Emotions and business mix as well as drinking and driving. So don’t let your insane monkey brain take the wheel. 

Leave your emotions at the door, and if or when they start creeping in, disengage and go for a walk. Your bankroll will be better off for it. 

A+ bankroll combined with a B game is going to produce better results than an A+ game with a B bankroll.

This is discussed in much more detail in the professional poker sections near the end of The Micro Stakes Playbook.  


7. Strength of Character is Crucial


"The most important quality for an investor is temperament, not intellect.” - Warren Buffett

Intelligence and success in business aren’t always directly correlated. Intelligence doesn’t hurt by any means, but it’s not the whole recipe. 

The anecdote of one of the most brilliant minds in human history, Sir Isaac Newton, comes to mind. In 1720, Newton owned shares in the South Sea Company, the hottest stock in England at the time. 

Feeling that the stock was overpriced, he sold his shares and made a decent profit of 7000 pounds. But as the months passed by, the stock kept soaring, and he bought the shares back at a much higher price. 

The stock plummeted shortly thereafter, and Sir Isaac lost 20 thousand pounds, which equates to roughly three million dollars in today's money.

You can draw your own morals from the story. The point is that we’re all subject to making irrational decisions when emotionally compromised. Even geniuses.

This is also one of the biggest reasons why you make bad plays while on tilt at the poker table!


On the flip side, you don’t have to be a genius to do well. Patience and discipline is what gets you there. I’d argue that being exceptionally intelligent is even outright detrimental in some aspects. 

There’s a certain vanity pertaining to smart individuals who always seem to be looking for a shortcut of sorts. 

Always trying to figure things out and thinking there must be a better, easier way than the tried and true methods. 

It very well might be there is, but there is also wisdom in not trying to fix what isn’t broken. The world is always changing, and it’s true that you should change with it lest you get left behind. 

You should keep looking for edges and keep up with the latest trends, of course, but you shouldn’t be too quick to dismiss what is already working, thinking that it’s a thing of the past. 

Things don’t change nearly as dramatically as one might think, especially when it comes to people. 

And let's always remember that poker is a game played between people where often the most simple poker strategy is the most effective one!

IQ is one of the best predictors of long-term success in basically any endeavour. But in and of itself it’s worthless. It doesn’t tell anything about the person’s character and mental fortitude. 

These are just as important, especially when things don’t go your way. And chances are they won’t. 

When life throws you a curveball, it isn’t logic that’s going to pull you through. After all, life is random, unpredictable, and sometimes deeply illogical. 

Coming to terms with it has to do with wisdom, not IQ, and the two are very distinct categories.

So the next time you encounter a soul-crushing downswing, instead of bemoaning your luck thinking you don’t deserve it because your skills are so vastly superior, use it as an opportunity to demonstrate your patience and perseverance instead. 

Good businesses survive and thrive in crises, others crash and burn. 


Final Thoughts


If you are a poker player who is serious about the game, then you are essentially an entrepreneur. You are in the business of making money.

And this of course requires two things:

1) Learning a proven poker strategy for consistent success.

2) Making sure that you are using all of the best poker software and tools, to continually improve your game, and stay on top.

But furthermore, if you want your business to thrive, you’d want to heed the wisdom of people who’ve been there, done that. And who fits the bill better than the Oracle of Omaha?

If you are in the business of making money, the first rule is not losing money. It’s difficult for a business to be profitable, but losing money is effortless. It takes a while to climb a mountain, but only a second to fall off the cliff. 

With that in mind, you should always aim to protect your downside. This means never losing more money than you’re comfortable with, as well as avoiding mistakes, like tilting away your profits. 

Doing only that will already put you well ahead of the majority of the player pool.

Remember that everyone can go on a winning streak, and it’s easy to think you have it all figured out when you have a feeling you can basically print money. 

But beware that heaters are deceptive, and fleeting. They say very little of your actual capabilities. 

Everyone can play well when the deck keeps hitting them. Only when the deck goes cold for extended periods of time will it attest to your true capabilities.

So you shouldn’t really pay too much mind to day-to-day or month-to-month results. The long run is a lot longer than most people realize, but it’s the only true indicator of your prowess, or lack thereof. 

Instead of worrying about short-term fluctuations, focus on the process. Keep learning and improving your skills, and the results will take care of themselves eventually.

If you’re running well, however, you should keep playing. You’re far more likely to play your A game if you’re already winning. Don’t worry about protecting your winnings and keep pushing the envelope. 

Conversely, if you’re down money, you should take a break if the games are not good and if you feel you can’t keep playing your A game. Live to fight another day. As Warren said, if you find yourself in a hole, stop digging.

Warren is a huge proponent of simplicity, in business and life in general. For some reason, people have a tendency to needlessly complicate things to their own detriment. 

You don’t need to know all the cutting edge strategies to get satisfactory results. Focusing on the fundamentals and avoiding mistakes is all you need to do. There’s enough work in that already.

In order to follow these pieces of advice, having a sufficient bankroll is essential. 

Without it, you can’t ride out the short-term fluctuations, and you won’t be able to capitalize on opportunities that present themselves (i.e. seeing particularly soft games on a higher limit than you usually play). 

Cash is the lifeblood of your business, so keep it healthy, or your business will bleed out.

Finally, be aware that there’s more to success than intelligence, and being a know-it-all is a detriment to your results, as well your personal growth. 

When things inevitably turn sour, it’s not intelligence, but the strength of your character that will get you through. So stay humble and keep learning. 

Lastly, if you want to know the complete BlackRain79 strategy to crush small and mid stakes poker games, grab a copy of the free poker cheat sheet.

7 Proven Poker Strategies From Warren Buffett Investing Principles