Know When to Hold 'Em
DIS and DAT | July 2026
Our periodic communication that reminds you to ask, "Should I react to those headlines?"
"Know When to Hold 'Em"
Sometimes the lesson everyone remembers isn't the lesson that matters most.
"The essence of investment management is the management of risks, not the management of returns."
— Benjamin Graham
Inside the Bellagio sports betting area during the World Cup. While Reggie and I were at the Planet Micro Cap Conference, Las Vegas, NV June 2026
I suspect most of us could finish the next sentence without thinking.
"You've got to know when to hold 'em..."
By now you've probably finished the rest of the chorus in your head.
"Know when to fold 'em..."
"Know when to walk away..."
"Know when to run."
It may be one of the most recognizable songs ever written.
Oddly enough, I’ve recently thought about the song with new eyes.
Instead of making it a song about poker, my experience and age, made me think of it as a song about judgment.
When we're young, judgment seems simple. Good decisions equal good outcomes. Bad decisions equal bad outcomes.
Experience quietly dismantles that idea. Sometimes, good decisions lose. Sometimes bad decisions win. Sometimes the right decision is invisible for years, and are only visible with patience and hindsight.
Judgment turns out to be something entirely different than what we are taught as youths. It is not the ability to predict.
Judgement is the ability to respond appropriately to reality.
Technology has a way of exposing that truth. Artificial intelligence is the current example.
Some feel an overwhelming fear of missing out. Every new model. Every new app. Every new announcement demands immediate action. Every tick of the stock prices higher. Every news report of the money being made! Reinforces the FOMO!!
Others retreat just as quickly. "If it wasn't necessary yesterday, it can't possibly be necessary tomorrow."
Most wait for someone else to decide.
Only a few quietly begin learning. Not because they're certain. Because they're curious. As a group they start figuring out which parts are good to be used, and which are harmful and need to be defended against, and even what parts could use further development.
Investing has always looked remarkably similar. Every opportunity asks a different question. Some deserve conviction. Some deserve skepticism. Some deserve no attention at all. Knowing the difference isn't intelligence.
It's judgment.
Know When to Hold 'Em
Holding is surprisingly difficult because it looks like inactivity. The world celebrates movement. Markets celebrate action. Television celebrates predictions. Patience rarely receives applause.
Yet almost every extraordinary investment required someone willing to look inactive for a very long time.
Know When to Fold 'Em
Changing your mind isn't weakness. Reality changes. Businesses change. Management changes. Economics change. Sometimes we simply discover we misunderstood something.
The willingness to admit our errors may be one of the most valuable assets an investor owns.
Know When to Walk Away
Not every opportunity deserves attention. Some businesses are wonderful. Some prices are not. Some ideas are fascinating but unlikely to improve judgment. Attention compounds just as capital does.
Protecting it matters.
Know When to Run
Very rarely does the game itself change.
Fraud. Broken character. Permanent impairment. Capital allocation that destroys trust. Those moments don't require patience. They require clarity.
Investing Better
But over the years another realization quietly emerged. None of those decisions begin when we buy a stock. They begin years earlier. Judgment is built long before it is needed.
A rested mind sees more clearly.
Writing exposes confused thinking.
Reading expands the number of patterns we recognize.
Relationships introduce ideas we would never discover alone.
Curiosity connects industries that appear unrelated.
These things don't replace investing.
They shape the investor.
Listening A Second Time, With a New Set of Ears
Markets will continue offering reasons to react. Technology will continue tempting us to hurry. Politicians and pundits will continue offering reasons to fear. There will always be another headline insisting that immediate action is the only sensible response.
Our experience has suggested otherwise.
We continue to believe that investing is not speculation, and it is certainly not gambling. It is the patient allocation of capital to opportunities where sound judgment, thoughtful preparation, and time can work together. Most days, that means doing very little beyond quietly preparing for when judgement matters most. The hard work is not filling every moment with activity. It is preparing ourselves so that when a decision truly matters, we recognize it.
None of us knows what the next year will bring. We don't know which technologies will flourish, which businesses will disappoint, or what surprises the markets have waiting for us. We do know that history has consistently rewarded those who combine curiosity with discipline and patience with humility.
So, wherever your own journey takes you next, I hope you continue learning, continue asking better questions, and continue trusting a thoughtful process over the noise of the moment.
For years I thought Kenny Rogers was writing about poker. Now I see it as a song about judgement. The cards simply give judgment a chance to reveal itself.
We all remember the famous lines:
Know when to hold 'em.
Know when to fold 'em.
Know when to walk away.
Know when to run.
I now think the most important lesson was the line that came next:
"You never count your money when you're sittin' at the table. There'll be time enough for countin' when the dealin's done."
Maybe that’s the lesson that investors need most. It separates the gambling and speculating from the investing.
Overtime, thoughtful investors develop the judgement to avoid three common mistakes:
Judging a thoughtful decision by tomorrow’s stock price.
Mistaking activity for progress
Confusing a good outcome with a good decision and a bad outcome with a bad decision.
They understand that the game isn’t over after the next headline, the next quarter, or even the next year. Markets reward patience more the urgency. In the end, successful investing isn’t about winning every hand. It’s about becoming the kind of person whose judgement improves with every hand that life deals. Perhaps that’s why the song ends the way it does. The gambler eventually disappears into the darkness, but the wisdom remains.
"Somewhere in the darkness, the gambler he broke even.
But in his final words I found an ace that I could keep."
Notice what Kenny Rogers says. He doesn’t tell us that the gambler left him an ace. He tells us he found one. That’s an important distinction. The ace wasn’t success, it wasn’t money, it wasn’t even the gambler’s life. It was the wisdom that could be rescued from it.
As investors --- and more importantly, as stewards – I hope we chose a different path.
James E Hughes reminds us that financial capital is only one form of wealth. Human, intellectual, and social capital are just as important, because they help families create, preserve and wisely steward financial wealth across generations.
My hope is that our children and grandchildren never have to search through the tragedies of our lives looking for wisdom.
My hope is that we hand it to them ourselves.
See you next time.
James Pope
CIO
Advisor. Investments
One More Thing
Curiosity has always relied on tools. Whether it be books, conversations, libraries, mentors, search engines, etc. Today Artificial Intelligence (AI) has joined that list.
This issue was developed using AI as a research, brainstorming, and editorial partner. Like every issue of DIS and DAT, however, the observations, opinions, stories, and final editorial judgment remain my own.
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