Jan

15

Nigel DaviesOnce in a blue moon, one comes across a seemingly specialized book that is beautiful and instructive in its own field but also is perfectly applicable for everything that important in your own turf. Such books as Horse Trading by Ben Green, The Secrets of Professional Turf Betting by Robert Bacon, and Zen and the Art of Motorcycle Maintenance by Robet Pirsig immediately spring to mind. The Rules of Winning Chess by Nigel Davies joins the pantheon of such books and is highly recommended to all traders, athletes, game players, parents, and kids.

The book is divided into five sections. Rules for improving yourself as a player, rules for preparing yourself for play, and rules for the opening, middle and end games. In each section, 10 or 15 lessons are given, a quote to put it in perspective appears, a discussion of how to apply the lesson follows, then the lesson is applied to real life examples taken from experiences and chess games played by the author and champions such as Capablanca, Lasker, Bronstein, Petrosian, Fischer and Karpov. Rules taken from the book with direct applicability to markets, and life follow.

1. Train with deadly seriousness.

2. Educate yourself.

3. Be vigilant.

4. Take away emotion.

5. Be your sternest critic.

6. Feel your way to a win.

7. Be Patient.

8. Don't be afraid to lose.

9. Know your strengths and weaknesses.

10. Lead a healthy life and diet.

11. Get good sleep.

12. Have a good breakfast.

13. Know your opponent's strengths and weaknesses.

14. Give no quarter.

15. Choose a favorable battle ground.

16. Play to win, and don't be content with a draw.

17. Master deception.

18. Know all the tools in your arsenal.

19. Clear your mind from distractions.

20. Don't talk during a game, but do walk before.

21. Play the type of game you are suited for.

22. Beware of doing the same thing often.

23. Attack the weakest points.

24. Don't be too eager to break the tension.

25. Centralize your forces.

26. Be wary of taking small gifts that distract you from the main chance.

27. Never say die.

28. Don't hurry.

29. Give yourself flexibility so that you can win in two ways.

Here are some of my favorite parts of the book along with a discussion of how they relate to markets. In discussing how important deception is, Davies divides deception into luring, goading, bluffing, mimicry, decoying, and changing tempo. I have read many academic treatises on deception that are much more erudite, talking about levels of indirection, stages of the foraging process, degrees of perception and misperception, benefits and costs, degrees of secrecy or uncertainty, but this practical approach developed out of the game board for practical use is highly useful and encompassing. The story he tells about Najdorf trying to get Stalberg drunk before a game by luring him to a nice lunch and yet finding that Stalberg despite all the drinks had him in a won game is right out of the annals of my uncle Howie. But the great twist is that Stalberg offered Najdorf the draw. "How could I beat a man who just bought me such an excellent lunch?"

The lures in the game of markets are so extensive they make the angler fish look like a neophyte. How about the lure of a big fat open or the lure of an investment in your firm with the only provision being that once I invest I will determine what you can get paid and what you may charge your customers. Mephistopheles lives. In the chapter on knowing your weapons well, one of my favorites, Davies makes the point that all the great champions were proficient at all games, and never overspecialized. All those who develop a niche must understand that their niche may become overpopulated, and the prey may not be as easy and other predators may come. "Not only does such wholesome food (knowledge of many different games) provide appropriate sustenance, but such opening will be valuable weapons in critical tournament situations."

In the chapter on not talking during the game, Davies makes the point that many businessmen don't like to take phone calls during the day. "It can take a while to refocus." I find this a crucial concomitant of success during the market day, and the only calls I take during the day are life-threatening ones from the family, and calls from my octogenarian friends, who can't understand how an old friend could be so busy at any time that he couldn't have time for them, and they're right. Old friends trump profits.

In the chapter on healthy body, Davies makes the point that the mind is part of the body and derives from the ensemble of all the organs. He then goes on to say that in many of the games lost by great players some aspect of their physical condition was responsible for the loss. A hilarious discussion of how he likes to play closed games against overweight opponents ensues. The stories about Mikhail Tal, who Davies thinks might have been the most gifted player in chess history, and how his dissipate life style did him in, are most indicative on this point.

My favorite quote in the book is by Bent Larsen: "This reminds me of a rule that I know very well because I made it up. When you are caught in an opening you don't know, play healthy developing moves." I like to believe that there is no situation from any game or any cultural event I can't think of a market analogy for. And I would say on this, that if the market is moving in a way that you have never seen before, just reduce your position when it moves in your favor, and wait patiently for another situation when you will be there.

My book is marked on every page with market lessons and things I should have done to improve my chess game. More important than all the lessons you will learn is that this is a beautiful book to enjoy and savor. Davies is a grandmaster writing about grandmasters. He's played with all the best, had many a sparring session with the great Bronstein himself, and has been a scholarly student of the wisdom that all the great champions of the last 200 years have captured. He rolls around with the reader, enjoys the follies and the greatness of the lessons that the champions have taught him and leaves the reader in an exhilarated state that such greatness exists and can be shared.

You can buy the book at Amazon, B&N, Borders, BAMM, Powell's or Waterstones.


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