It was getting late in my monthly poker game, down to the last four players from an initial table of eight. I was holding a queen and a three -- not a particularly strong hand for No Limit Texas Hold 'Em, but I was already in for the little blind, so what the heck. Besides, I had won the previous pot, so it was a little easier to play the hand.
The flop came up with a queen and two other cards that didn't really interest me -- no other face cards, no three for me. One of the other players made a healthy bet. I've played enough hands with him to know (or at least very strongly suspect) that he also had a queen. So even though I assumed his hand was better than mine (his kicker was almost certainly higher than my three), I stayed in, halfheartedly calling his bets. Maybe I could have chased him and bought the pot with a huge bet, but it's a hard wager to make when you're fairly certain the other guy has better cards.
It was miserable poker, but I had already invested a bunch of my chips. I should have folded and gone on to the next hand. But, as happens way too often, I couldn't let it go.
In the end, my opponent flipped over a queen-10 (no surprise), taking a nice pot made up primarily of my chips. It was the beginning of the end for me, and I wound up a disappointing fourth place. Most importantly, it strengthened my commitment to keep a healthy distance from Harrah's (NYSE:HET).
But as I was reading through the inaugural Motley Fool Inside Value, I learned something about my poker -- and my investing.
Quoting analyst Philip Durell's review of the investment psychology book Investment Madness, by John R. Nofsinger, "Our investment successes are the result of skill; failures are bad luck. We avoid regret and seek pride, leading us to sell winners too early and ride losers too long. And we have a tendency to risk too much after a gain because we treat the gain as 'house money' and risk too little after a loss because we are 'snake-bit.'"
There could be no better synopsis of my gambling and investing style. I still own my shares of Ballard Power Systems (NASDAQ:BLDP), for heaven's sake, certain (probably as a result of my pride) that it's only a matter of time before the fuel cell changes the world and makes me rich.
Like my queen-three, that's a hand I really should have folded long ago. Unfortunately, some lessons take a long time to sink in.
Motley Fool Inside Value is a brand new publication that scours the market for companies trading for 50 cents on the dollar. Give the newsletter a try, free for 30 days.
For reasons he can't fathom, Fool editor Roger Friedman still owns shares of Ballard.
