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Face the Ace Results

By Philip K. on August 13, 2009 2:36 PM | 0 Comments
Continued from my post on the first episode of Face the Ace, it looks like hindsight's 20/20 vision shows that I'm correct.  Don lost the $1 million tournament against Gavin Smith.  Instead of walking away with a guaranteed $200,000, all he has now is a T-shirt from the show and a story to tell.

Even if Don won the $1 million, it was still a stupid bet from a bankroll perspective.  Read my previous post.  Don will always live a life of regret.  "It could have been".  "Should have been".  "Would have been".  It's cold and it's callous, but that's how losers think and talk.

Howard Lederer Gives Questionable Bankroll Advice on Face the Ace

By Philip K. on August 3, 2009 1:42 AM | 0 Comments
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If you missed the premiere showing of Face the Ace over the weekend, it's an interesting show.  It changes the standard ESPN and cable TV poker show formula by injecting an element of game show flair.  If you stripped it to its core, it's nothing but a very generous NL tournament freeroll for amateur players against professional players.  The format is one-on-one with rising blinds that are unknown to the TV audience.

Based on last night's show, there appears to be asymmetric risk/rewards between the amateurs and the professionals.  For the amateur players, they are risking very real money and are playing to the best of their abilities.  The professional players have no direct financial risk in playing the one-on-one tournament.  The pro players are playing for a $10,000 donation to the charity of their choosing, an admittedly weak incentive.  I suspect the pros are not playing their A game.

I won't recap much of Saturday's show since it's available on Hulu, but the portly by lovable Don "the Basement Dweller" won a few favorable showdowns against Erick Lindgren and Howard Lederer. Don knocked both Lindgren and Lederer out of the tournament for a $200,000 win.  Don has to make the difficult decision of whether or not to risk $200,000 for $1 million dollars against one more pro.

Lederer gave his opinion on whether Don should proceed.  My chin shot straight up as Lederer strongly recommended Don continue with the tournament.  He reasoned that Don's skills, while below that of the professionals, are decent enough that there will be value for Don to continue on.

For those of you who have read my previous Poker Romps, I am nowhere near the level of pro poker player.  If I were to play against the pros they would cut me up.  (Well, maybe they wouldn't cut me up.  In cash games, I'd play maybe like the top 5% hands.  There's no way I can out poker the pros.  I'd fold everything but my top premium hands and defend my blinds against late positions with 10% hands.  I wouldn't bleed very much with such a virgin tight strategy, but I digress.)

Anyway, Lederer is very correct to say Don has good value in risking $200,000 to go for $1 million dollars.  It's very likely that Don does have positive expected value in risking $200,000 for $1 million.  Even though Don isn't as skillful as the pros, the luck factor in being dealt good cards should give him enough positive equity.  

Assuming a very conservative estimate that Don has a 30% chance of winning the tournament and the Pro has a 70% chance of winning the tournament:


EV  =  $800000*.3    -   200,000*.7
EV  =  $100,000


If the game is worth maybe $100,000 why shouldn't Don take the gamble?  One word:  Bankroll.  It's very likely that Don will lose the last match up and there are no further games with such a positive advantage.  Following the maximization of logarithmic wealth, aka Kelly Criterion, one should only risk approximately the fractional percentage of their edge adjusted for variance.  Don's expected return is nowhere near 100% and there's considerable variance in the wager.  If he'd risk it all, he's over betting and would never reach the "long run".  He'd bust out before then.

To frame it in a more accessible way.  Don is no longer playing with some "imaginary house money".  That money is his.  If instead of using his recent winnings, he had to write a check for $200,000 from his bank account to wager it for a 30% chance to win an extra $800000, should he do it?

Dumbing things down even further.  $200,000 is life changing for a man of modest means like Don.  He's a truck driver making $60,000 a year.  $200,000, after taxes is about $100K+.  That would be more than enough for a down payment for a house, a nice vacation, and a good start on his retirement plan.  $1 million dollars is even better, but he's risking all of the nice things possible with $200,000.  

That was an overbet.  Lederer should not have advised Don to continue with the tournament.  It just doesn't make for good gambling sense.


My Opportunity Costs from Playing Poker

By Philip K. on July 23, 2009 1:17 AM | 0 Comments
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I know I'm back prematurely from my Bar studies, but I couldn't help but post this PokerGrapher chart from 2007 to 2008.  I found this chart on my computer from my brief foray in No Limit Hold'em.  I have read a lot of poker books and I enjoy them for their game theories and strategies.  

The 2,807 hands above are from two years at Pokerstars, NL(.25/.50) and NL(.50/1.00).  Actually, make that three years, because I haven't played a single cash hand in 2009.  It took me 3 years to play the same number of hands that multi-tablers crank out in one day.

I pulled in about 5BB (big blinds) per 100 hands.  You ask most poker players what would be a good win record and they would say 1 to 3 BB is good, 3 to 5 BB is very good, and anything over 5BB is awesome and probably unsustainable.  

My 5BB/100 is a bit misleading, because this is a very small sample size.  It's just as likely that I'm playing a losing game or a considerably better game.  Even though there is "noise", the results are the best guess of my win rate.  

Once you start looking into dollar figures, you start to realize why I never capitalized on any slight propensity towards No Limit Hold'em.  5 big blinds at my level translates to about $2.50 to $5.00 per 100 hands played.  Most full tables go through maybe 70 hands an hour, so I'm actually making less than $2.50-$5.00 an hour.  I suppose I could play multiple-tables to make more, but I never did get comfortable with that.

In econ speak, there's a fifty cent word called opportunity cost.  Opportunity cost just means the value of your time that you could be doing something else.  I can't and won't disclose my plays, but I don't even get out of bed unless it's at least $50 an hour.  To forgo $50, in order to make $3.50 just doesn't make much sense.  

Don't get me wrong.  I enjoy going to the movies or grabbing a drink with a friend, but that's leisure stuff in which I derive non-pecuniary satisfaction.  When it comes to business and making the cash, it's all about the cold hard cash.

In order for me to get my poker win rate up to $50 an hour, I would have to spend thousands of hours practicing.  That would take years.  All of the old hands and young guns that we see on TV have done their time.  Even the youngest players have spent thousands of hours on play games or home games by the time they reach the legal age.  Or the guys that were chess players or backgammon players, they've already acquired thousands of hours in game theory from their respective fields.  Many of those hours transfer over to poker.  Don't be fooled by the seeming ease in which experts play their game.  Rarity, or should I say impossibility, is the person that achieves mastery in any subject without extensive practice.

In the coming months I will be forever free from any obligations and I will have to make the difficult decision of whether or not I want to muck through the poker learning curve or to rely on my old tricks.  

We'll find out together.

Poker vs. Life Comparison

By Lowball on July 9, 2009 10:18 AM | 3 Comments
Those who do not know much about gambling may disagree but there are many references in these games which relates to how we live our lives and make our decisions.

We may play the game correctly, with all the math backing us up but can still lose once the river card is exposed.  Just as in life, you may do everything correctly and still lose an investment.  But what matters is your long-term outlook and ensuring safe-guards such as sustaining a large enough bankroll to endure this short-term loss. This is an important rule I learned when Philip first introduced me to this world.  Never put all your eggs in the same basket.

I won my first poker tournament the other day. However, my small victory does little for my record as I have only played a handful of tournaments so far.  I can appreciate these small wins, but even then, there are areas where I could tighten up.  I can also say that I am getting better at recognizing weakness in my opponents and am more bold in applying the pressure when it is needed.  Aggression is an important key to fast pace tournaments.

As I read more into Arnold Snyder's book: Poker Tournament Formula, the more I recommend any novice poker player interested in winning these tournaments to get a copy and read it.

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Reasonably Prudent Poker Player

By Philip K. on June 25, 2009 2:50 AM | 1 Comment
I've previously mentioned in my Poker Romps that I am a sincere admirer of Arnold Snyder.  He has done a lot for me.  My poker tournament skills try to mimic the style in the Poker Tournament Formula.

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Without hesitation I recommended the PTF to my buddy "Low" and it came almost as a shock that he didn't think highly of the book.  Low said that, "Arnold's method isn't the way of winning tournaments."  Perhaps my own judgment is clouded by my deep respect for Arnold.  Objectively speaking, PTF has an average 4.5 star review from Amazon from many reviewers.  Other meta evaluations rank his books accordingly high.  The wisdom of the crowd has spoken.  His methods have helped a lot of amateur players build their bankrolls.  

I inquired further by asking Low why he felt PTF wasn't the way of making money.  Him being a psychologist, he felt the people game in poker was the most important element.  Low is a successful poker player playing the people game.  As much as I like Low, I can't agree with his assessment.  

In the legal profession, there's a standard called the "reasonably prudent person".  What the reasonably prudent person is, is a legal work of fiction that tries to approximates the average opinion.  We see in real life that reasonably prudent people have differing and contradictory opinions.

Ask reasonably prudent poker players what they believe to be the most important poker skill and you'll get a color swatch full of opinion.  Some poker players like Low might think psychology is the most important aspect of the game.  Others would say bankroll management.  Some would say aggression.  Others would say something else.  PTF manages to capture all of the successful skills required to win poker tournaments.

I understand that players can profit from the people game, but the game of poker is not just a game of people.  Cards do matter.  Probabilities and pot odds do matter.  Meta game analysis--beginning, middle, and end stages matter.  Information advantage  in the form of position matters.  Utility of chips matter.  Poker is not just a people game.  It's a card game and subject to statistical principles.

The point is that people shouldn't be closed to the possibility of finding success in poker through other angles.  Just because someone has found a sliver that is successful does not mean that it's the only means of success.  On the opposite end, if you can't find any success playing the formulaic ways, look for something else.

Put in the time and effort to find different angles to exploit poker.  This advice also applies to trading, blackjack, and any other game.  There's always more than one way to beat the brains out of the competition.  It won't be easy to find these advantageous angles, but they're very rewarding when you do find them.

Poker Acronyms

By Philip K. on June 19, 2009 11:40 AM | 0 Comments
I just realize that I might not have been fully transparent with my use of acronyms in yesterday's post.  Let me fix that.
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    • ROI - Return On Investment.  It's the amount received divided by the amount paid in.  ROI's are commonly used in poker tournaments, gambling, and the investment world
    • ITM - In the Money.  It means lasting long enough in the tournament to receive one of the skewed prize payouts.
    • BB - Big Blinds.  Total number of chips divided by the big blind.  For poker tournaments, the exact amount of chips is not as important as your relative position in terms of big blinds.  
I hope that clarifies things somewhat.

Poker Romp -- Beginnings

By Philip K. on June 18, 2009 9:41 PM | 0 Comments
Today my buddy "Low" and I went to our local casino to play a small fast poker tournament.  I'll be the first to admit that my NL Hold'em Tournament skills are mediocre at best.  At worst it's a 0% game.  I don't have anything close to a large sample size to draw any meaningful conclusions.

My records do indicate I've won more money playing slot, blackjack, and miscellaneous tournaments than poker tournaments.  It's always an issue of ROI and I have a higher ROI in misc tournaments.  

Granted I haven't played many poker tournaments, but that will all change in August when I will have all the free time in the world.  Like most other young males with too much free time, I harbor the secret fantasy of striking fame and fortune playing hold'em tournaments, despite lacking the skills to do so. 

I might have a favorable propensity in miscellaneous tournaments, but these tournaments are somewhat of a dead end.  The prize pools are considerably smaller than poker tournaments.  What good is being only quarter-rich and not famous?  

In order to climb the poker hierarchy, I will have to muck it through the small fast tournaments to gain some experience.  I'll have to fight a few homeless journeymen before I can fight Mike Tyson.  I might not even be strong enough to beat these journeymen.  We'll see.

For my poker tournament playing style, I will try my best to mimic the strategies in Poker Tournament Formula by Arnold Snyder.  Arnold is probably the person I most respect in the gambling community and I take everything he says seriously.  

* * *

Getting back to today's poker tournament.  My buddy "Low", another aspiring poker player, and I were playing at the local tournament with about 60 players.  We've been there together a total of 3 times.  I won first place once, and Low has been in the ITM twice.  An auspicious place to say the least.  

I busted out of the tournament halfway into the tournament.  I was in a desperately short situation with about 9BB left.  I had to get some chips quick and I was able to isolate the player on the dealer button with a pre-flop all in of 77 versus his AJo.  He pulled his J on the river.

The worst thing a tournament player can do is get blinded out.  In these fast tournaments, you'll have to shove many times on the coin flip situations.  

Low was in a desperately low situation as well.  Half-way into the tournament, he was in the awkward situation of only having 2.5BB left.  He was able to win many of the desperate coin flips.  Because he took this desperate situation of flipping and flipping, he caught some luck and made it into the final table.  With his competitive chip stack he was able to steal pots and he came out with a 3rd place finish.  

The point is that sometimes you'd just have to generate a lot of variance by doubling up.  I know it may come off as common sense to many people, but I suspect many are still too wimpy to follow the advice.  They always wait for the right cards and the right cards hardly ever come.

Bayesian Statistics and Poker

By Philip K. on May 22, 2009 6:28 PM | 0 Comments
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The Mathematics of Poker by Bill Chen is one of those rare view changing books.  Being a professional gambler requires a propensity for math, but not as much as the general public would think.  I'd posit that there's no real need for calculus or any complicated math.  More important is simple algebra, multiplying with percentages, and understanding basic probabilities.

Bayesian statistics goes a bit beyond basic probabilities, but it's pretty useful for games like poker.  I'm not very comfortable with getting into complicated symbolic notation, because (1) most people don't get it and (2) being able to break things down to its most understandable form is the best way of teaching.  Bayesian statistics is pretty much using observed information to try and get a more accurate picture of the probabilities.  The most cited example is the testing for a rare genetic disease.  If you test positive for the genetic disease, it's more likely that the positive test results are the result of testing error than having the disease.  At the same time, testing positive the first time around means you're more likely to actually have the disease than without the first test.

Bill Chen provides a very good example of bayesian statistics in poker.  When the table is broken up and you're sitting at a new table and see a guy with a big stack, either the player is very lucky or he's a loose aggressive player.  The very tell that he has a big stack means it's likely that the guy is a loose aggressive player.  The instant he makes a position play (an aggressive play), the probability of him of being a loose aggressive player jacks up instantaneously.

The big stack of chips is like testing positive for the genetic disease.  This new information allows you to get a better understanding of what this person is really like.

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