Chasing the American dream as an immigrant gambler

A 22-year-old from India arrives in the US to pursue a master’s in computer science. Bored in the tech world, he transforms himself into a professional blackjack player, parlays his gambling skills into a Wall Street job, and embarks on a 25-year odyssey into the unforgiving world of investment banks and hedge funds. That, in a nutshell, is how my American Dream unfolded.

Peering out of a rain-streaked window of a British Airways 747 as it touched down in New York on 15 August 1985, I was filled with anticipation. To someone who had grown up in India during the turbulent 1970s, America seemed like a mythical place where anything was possible. That reputation would turn out to be richly deserved in my case.

By the time I graduated from IIT Delhi, I knew that I wanted nothing further to do with electrical engineering. I had gained admission to IIM Ahmedabad but I couldn’t imagine my headstrong personality being a fit for corporate India. Instead, I trod the well-worn path from IIT to the US, to attend graduate school in computer science. Unfortunately, soon after I finished my master’s degree at the University of Wisconsin, I realized that I had no interest in computers either. I couldn’t bear the thought of spending the rest of my life sitting in a cubicle and punching on a keyboard all day long.

Nevertheless, I bounced around in the computer industry for a handful of years while desperately searching for something to feel excited about. I even moonlighted as a waiter at a middle-eastern cafe in Minneapolis with an eye toward opening my own restaurant.

Simple and lifechanging

It was during a weekend ski trip to Lake Tahoe that I came across the game that would change my life: blackjack. The simplicity of the game — get as close to 21 as possible without going over — fascinated me. I had always loved mathematics and blackjack was obviously a game of numbers. The fact that counting cards could turn the odds in the player’s favour made the game even more enticing for me. And when I learned that casinos not only barred skilled players but sometimes had them arrested and beaten, I was filled with outrage. I decided to turn myself into a professional blackjack player, if for no other reason than to teach the casinos a lesson.

Almost without exception, my declaration was met with laughter and ridicule. Everyone around me assumed that I was a gambling junkie who was using probability theory to justify his addiction. Many even believed that it would lead to my ruin, but I was not to be deterred. For the next two years, I lived, ate, and breathed blackjack. It was no surprise that several casinos banned me, some politely and some not so politely. Consequently, I was forced to indulge in a variety of deceptions just so I could continue playing. I began using fake names, a separate one for each casino and took on the persona of a wild-and-crazy plastics importer who loved to gamble. I acted drunk despite hardly drinking and even started stealing my own chips from the table (to make it appear that I was winning less than I was). After a while, I began to enjoy this cat-and-mouse game as well.

Into the world of high finance

The life of a professional gambler was exhilarating. It was an incredibly powerful feeling to know that I had an advantage over the casinos and that, given enough time and capital, I would come out ahead. Unlike most visitors to Las Vegas, the glitz and glamour of the Strip held no attraction for me. I was in town only to play a game and to play it to the best of my ability, a principle that I would adhere to throughout my Wall Street career as well.

By the fall of 1992, I had become convinced that the rest of my life would be spent travelling the world, and playing blackjack. I could never have imagined that my gambling skills would bring me to the world of high finance.

A spur-of-the-moment trip to Manhattan brought me face-to-face with several Wall Streeters who were friends of my friends. At a midtown nightclub, they listened with rapt attention as I recounted my experiences as a professional gambler. As the evening came to a close, one of them turned to me and said, “You should work on Wall Street.” I laughed the idea off but, back home in San Francisco, I couldn’t get Wall Street out of my head. It was, after all, the largest casino in the world. I put together a resume, placing blackjack at the top of the page and computers near the bottom, and mailed it to a few investment banks.

Lehman Brothers agreed to interview me and I used my frequent flier miles to visit New York City one more time. The firm’s bond traders grilled me for hours about my gambling prowess, but I was able to handle them with ease. At the end of that exhausting day, however, the Lehman bosses insisted that I submit to a public test of my card counting abilities. They removed one card from a well-shuffled deck and gave me 18 seconds to identify it. I felt like kicking myself. Earlier in the day, I had claimed that I could count a deck in as little as 14 seconds, but that was in the quiet of my apartment.

This was my first time on a Wall Street trading floor and the atmosphere made me deeply uncomfortable. My unease notwithstanding, I knew that my job prospects hinged upon successfully performing this parlour trick. So I picked up the deck, gave a nod to the timekeeper, and raced through the 51 cards. With just two seconds left on the clock, I said out loud, “It’s a nine.” To my great relief, the trader holding the missing card turned over the nine of clubs. Shortly thereafter, I was handed a job offer.

I didn’t know the first thing about finance and yet, I decided to take a gamble on Wall Street and moved to New York.

Just like a dealer

I regretted it almost immediately. As a know-nothing, I was relegated to the most menial of tasks — making copies, faxing reports, and fetching breakfast for the masters of the universe. My being a foreigner didn't help, nor did the fact that I was a vegetarian. I was forced to attend countless dinners at steakhouses where I grew tired of eating salad after salad. A fellow Indian would have to bite his tongue while being mocked at a fancy French restaurant, “Grow some chest hair. Eat some meat.”

Making matters worse, I gradually realized that my Wall Street job was akin to being a blackjack dealer. At Lehman Brothers, I was employed by the house, the very idea of which I would have found abhorrent in Las Vegas. However, I soldiered on because I was hell-bent on figuring out a way to beat the US mortgage market just like I had done with the casinos of Nevada.

Devising a strategy that would consistently beat the market was an extremely difficult undertaking, one that would take me years to accomplish. During that time, in a repeat of my blackjack years, I devoted every spare moment to understanding mortgages. I even stayed awake many nights, twiddling my thumbs, as I tried to decipher the latest piece of the puzzle. Seven long and painful years later, I was able to come up with an investment methodology that I believed would turn the odds in my favour.

The long game

A slim 1% advantage over the casino had been enough for me to make a living from blackjack. Likewise, an even smaller edge was enough to beat the mortgage market over and over again. The key in both games was sizing bets appropriately and staying in the game long enough for the true odds to be realized. My bets in Las Vegas had been designed to limit the probability of losing my entire bankroll to under 5%. I have followed the same path on Wall Street. In an industry where everyone tries to make the greatest amount of money in the shortest amount of time, I have consistently played the long game. To the great frustration of my hedge fund bosses, my trades have been sized to minimize my chance of ruin, and not to maximize my pay. While this approach of mine has almost certainly lowered my compensation, it has also given me something far more valuable in return: peace of mind.

Despite spending three decades first beating the casinos for a hundred dollars at a time and then managing hundreds of millions of dollars on Wall Street, I have never equated success with money. Instead, I have adopted Maya Angelou’s definition that success is liking yourself, liking what you do, and liking how you do it. I discovered early on that the key to happiness lies in playing the game well during the day and sleeping well during the night. Money is merely a side effect of a game played well, and not its primary objective. My Wall Street accomplishments — creating an exceptional long-term track record of managing money and playing a key role in raising eight billion dollars for the largest hedge fund launch in history —are a direct result of this conviction.

When I look back upon the past 30-odd years, I realize that my story could only have happened in America. More than any other country in the world, America rewards risk-taking and risk-takers. Devoting myself to the pursuit of becoming a professional gambler was an extraordinary risk as was the path that I followed on Wall Street — spurning conventional wisdom to create my own investment method. My success in both ventures is the result of having a system, being disciplined, and operating with a large enough bankroll. If you can turn the risk/reward equation in your favour then you are no longer gambling, you are investing in your future. This basic fact holds true not only in casinos and on Wall Street, but in every aspect of life.

After a stint spent as a professional blackjack player, the author spent 20 years (1999-2019) managing money for some of the largest hedge funds in the world. During that time, he achieved the feat of 103 consecutive months of positive returns, quite possibly the finest long-term track record produced by an individual in hedge fund history. He has recently authored a book that chronicles his extraordinary journey, 'Play It Right' published by Bloomsbury India