Jeff Ma's "House Advantage": Investing Lessons from a Blackjack Legend

A member of the legendary MIT blackjack team in the mid-1990s, Jeff Ma and his teammates counted cards for millions. Their high stakes lifestyle was chronicled in the bestseller Bringing Down the House and later on the silver screen in the Hollywood hit 21.

In his new book, The House Advantage: Playing the Odds to Win Big In Business, Ma has translated his blackjack skills into investing lessons.

Of course, he’s not the first guy who’s good with numbers to press his luck in cards. “Bond king” Bill Gross was a professional blackjack player before founding PIMCO. "Oracle of Omaha" Warren Buffett is a competitive bridge player. And, David Einhorn, the hedge fund manager who warned of Lehman’s demise, has sat at the final table in the World Series of Poker.

We recently caught up with Ma in New York City.

Here’s a few things he taught us:

Lesson #1: Be passive not active

For most, stock picking is a dangerous game, akin to playing roulette. Instead of trying to cash in on one money maker, Ma says it’s wisest to be an index investor.

Lesson #2: Think like a scientist

Base your investment decisions on stats, data and information. If something doesn’t make sense, don’t do it. As he tells Aaron in the interview, if more people followed that advice this decade we probably would have avoided the tech and housing crashes.

Lesson #3: Keep your emotions out of it

Don’t allow a big win or big loss cloud your judgment. If you remain logical and rational you’re more likely to finish on top.

Lesson #4: Stick to your strategy

One losing hand or bad stock trade doesn’t mean your strategy is faulty. No one makes money on every trade, just as no one wins every hand in gambling -- not even Ma.

Besides being an author, Ma is an entrepreneur who’s love of sports prompted him to create Citizen Sports. (Full disclosure: Yahoo bought the sport-information website and iPhone application earlier this year, although Ma decided to leave the company after the acquisition.)

___

Follow Yahoo! Finance on Twitter; become a fan on Facebook.