Backgammon and Risk Management

I will always be grateful to my late father for teaching me how to play backgammon at a very age. The game has provided me a lifetime of enjoyment. In recent years I’ve developed a new appreciation for the game because I have downloaded several backgammon app’s for my iPhone and I play on almost on a daily basis.

I’ve read a variety of articles about Backgammon recently and came across this description of the game by former champion player Tim Holland:

“Backgammon combines the features of every popular game we’ve known for decades. It blends the pure luck of craps and roulette, a lot of tactical skill, and a large element of personal judgment. The social aspect of it is beautiful — you don’t need to go to a club or set up a foursome. You can compete en famille, alone against your wife, or with an almost unlimited number of children or friends.

“Then, it’s so clean and candid; cheating is just about impossible; no one is hiding any cards; there’s no bluff, as in poker. It’s also very democratic and good for the ego because, with occasional luck, beginners can beat the most advanced players. And, of course, it’s the most pacific game I know of; it’s totally devoid of any element of human aggression. You’re never angry at your opponent, as in rummy, or at your partner, as in bridge. Whatever anger you feel is directed at the dice, at some abstraction of Lady Luck.”

Tim Holland, The New Yorker, 1974

I agree with Holland about the social aspect of the game and that aspect is obviously not present when you play against a computer, but I still find playing against my iPhone quite a bit of fun.

I would recommend the game to anyone, but particularly those who have jobs that require some degree of risk management, especially stock and commodity traders. There are a variety of games that could help traders hone their skills risk skills and become more adept at developing strategy. Chess comes mind. As a trader you always want to be thinking a few moves ahead. Backgammon is the same way, except it adds more of an element of chance because moves are dictated by rolls of the dice. In order to become good at the game you really have to learn how to master the odds and play the percentages. There may be some scenarios where you make all the right moves, yet you still lose simply because your opponent was beneficiary of rolls that gave him a great advantage, but if you are disciplined and play the odds correctly you are going to win more often than not. It is the same way trading and investing.

To be continued…..













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