True ROI of Top Players at the WSOP This year

[millidonk]

Love Lildave's staking criteria. I normally ask myself one question. 'have they sold out yet?'

[MC]

I have a formula for staking, for selection of who to stake and how much to wager.....

<3

[Royal Flush]

I either stake people because i like them and want to see them win, or, i hate them and it would tilt me to death if they won so i need some kind of financial compensation.

[smashedagain]

I either stake people because i like them and want to see them win, or, i hate them and it would tilt me to death if they won so i need some kind of financial compensation.

<3

[MC]

I either stake people because i like them and want to see them win, or, i hate them and it would tilt me to death if they won so i need some kind of financial compensation.

Seem to recall you staking me a couple of times in the past

Hope I fall into category A!  

[The Camel]

I have a formula for staking, for selection of who to stake and how much to wager.

It's a sliding points system, derived from the following criteria.

1) How much do I like the person, out of 100

2) How much do I feel like he's "due" out of 100

3) How high has his morale been lately out of 100

4) Value at the price, out of 100

Anything above 325/400 is an auto buy for me. 250-325 very likely buying, if anyone has a particulally high 1) score Im often going to just buy anyways

How much to stake

1) How am I running recently - if it's 0-30 out of 100 = 3 points, 30-60 = 2 points, 60-80 = 1 point, 80-100 = 4 points

2) How Degen do I feel - 0-40 = 1 point, 40-60 = 2 points, 60-90 = 4 points, 90-100 = 7 points

3) Has the guy ever won before when I wanted to buy a piece but didn't, yes = 2 points, no = 0 points.

9-13 points = buy 3x what I can afford, 7-8 buy bigger than i should, 5 and below buy what I can afford, or maybe be a little nitty.

Pretty big loser buying pieces in tourneys lifetime, but I always get a good go for my money 

Brilliant.

[Doobs]

Dan needs to look up "Cost of Capital". Only a person with effectively infinite money could rationally pay 1.49 for a <1% ROI with the variance of tournament poker.

... and risk premium in old school theory.

Buying costs should be deducted from any expected return, so that means the expected exchange costs from live poker clearly be in too.  This isn't the exchange rate movement which is a different thing.

..and grim risk should be factored in for some people.  If often somebody pays slowly, it would be reasonable to deduct for that too.

It is interesting Dan mentioned share traders, a lot of share traders wouldn't have a clue on the theory, they just "know" when to trade.  I expect Camel doesn't know the theory behind the price he quotes, just instinctively has a rough idea where it should be through experience.

Will give a better answer tomorrow.  Am up early in the morning.

 

Lildave has already won the thread, and this is all just theoretical.

Cost of capital and risk premium are pretty much the same thing.  I am old school so will stick to risk premium, despite having done some fairly recent cost of capital calcs in the day job.  And I expect if I produce a massive spreadsheet model for the WSOP then it might just be a touch geeky as well as time consuming.

Risk premium is the the extra amount over a risk free return you need for putting up with the variance of a particular stake/investment.

If I am investing I can put all my money in UK government bonds.  I can be pretty sure that I'll get the return expected at the date given.  People don't assume it is as risk free as it once was, but it is a good enough proxy.

If I invest in shares I am going to get a return, but I don't really know how much it will be.  There have been various studies that show that historically I am going to get 5 or 6% over bonds investing long run.  You can also have a good guess at it by starting from total dividend yields factoring economic growth and inflation in.  I remember lots of people saying it was too high around 2000, but you can guess how that ended.

People who invest in shares are at the riskier end of the investing public, so I think 6% is a good start for what the risk premium of investing in poker players should be.  You can compare the volatility of returns against that from poker tournaments and I'd be reasonable sure that your average stake has a lot more variance that your average share investment. 

Probably a good example of an investors attitude to risk is considering something like deal or no deal.  You get to the end and you have two boxes, £1k and £250k.  How close to £125k do you get before accepting the bankers offer?  You take 100k and your "deal or no deal" risk premium is about 25%.  I'd say if you were holding out for 125k you probably have an unhealthy attitude to risk.  If you hold out for 130k, because you "like the sweat" or #lovethegame, then you should be making your way down Gamblers Anonymous.  I am serious on this.

Poker staking is probably something between investing in shares and doing the deal or no deal example.  My instinct is that the risk premium from poker should be something like 10%.  Of course everyone's different and it depends very much on how much risk you want and how big your roll is.  This is purely tournament variance and doesn't factor in foreign exchange expenses, timing issues with payments or the risk of default from the stakee.

So if someone is a genuine 1.25 player, I don't think you should be looking at it unless you are offered shares at 1.15 or so.  Take some off that if you think there is going to be some foreign exchange risk and some more for your default risk.  Adjust if they aren't a 1.25 player, and add a bit if the tournament is soft, or live is soft.  1.25 was chosen because I think that is around the benchmark for a good internet player (sharkscope the ROIs of the better internet players in MTTs).  The 2 plus 2 thread suggest live is 1.3 or so*, and there is another study referenced which also got 1.3.  I just think that your average $1500 live event isn't really going to be that much fishier than your average $50 online donkament.

I expect quite a lot of the perceived edge in the WSOP main event can possibly be negated by the increased variance you get from that tournament.

On top of this, I think you can also factor in what kind of player you are.  If you can invest in yourself and get 1.25 long run, why invest in your equal if he is charging 1.25.  One has an expected return of 1.25, one has an expected return of 1?

I'll just add that you can never really absolutely prove anything using statistics, but

Big sample>>small sample>>unbiased opinion>>biased opinion.

On 2 plus 2, I did notice somebody complaining vociferously about 2000 tournament samples, while running a staking thread which emphasised hero's performance over 6 or so tourneys.   

Just my views

* There are flaws with that 2 plus 2 thread, but I don't think the number looks that far out.     

[skolsuper]

Dan needs to look up "Cost of Capital". Only a person with effectively infinite money could rationally pay 1.49 for a <1% ROI with the variance of tournament poker.

... and risk premium in old school theory.

Buying costs should be deducted from any expected return, so that means the expected exchange costs from live poker clearly be in too.  This isn't the exchange rate movement which is a different thing.

..and grim risk should be factored in for some people.  If often somebody pays slowly, it would be reasonable to deduct for that too.

It is interesting Dan mentioned share traders, a lot of share traders wouldn't have a clue on the theory, they just "know" when to trade.  I expect Camel doesn't know the theory behind the price he quotes, just instinctively has a rough idea where it should be through experience.

Will give a better answer tomorrow.  Am up early in the morning.

Lildave has already won the thread, and this is all just theoretical.

Cost of capital and risk premium are pretty much the same thing.  I am old school so will stick to risk premium, despite having done some fairly recent cost of capital calcs in the day job.  And I expect if I produce a massive spreadsheet model for the WSOP then it might just be a touch geeky as well as time consuming.

Risk premium is the the extra amount over a risk free return you need for putting up with the variance of a particular stake/investment.

If I am investing I can put all my money in UK government bonds.  I can be pretty sure that I'll get the return expected at the date given.  People don't assume it is as risk free as it once was, but it is a good enough proxy.

If I invest in shares I am going to get a return, but I don't really know how much it will be.  There have been various studies that show that historically I am going to get 5 or 6% over bonds investing long run.  You can also have a good guess at it by starting from total dividend yields factoring economic growth and inflation in.  I remember lots of people saying it was too high around 2000, but you can guess how that ended.

People who invest in shares are at the riskier end of the investing public, so I think 6% is a good start for what the risk premium of investing in poker players should be.  You can compare the volatility of returns against that from poker tournaments and I'd be reasonable sure that your average stake has a lot more variance that your average share investment. 

Probably a good example of an investors attitude to risk is considering something like deal or no deal.  You get to the end and you have two boxes, £1k and £250k.  How close to £125k do you get before accepting the bankers offer?  You take 100k and your "deal or no deal" risk premium is about 25%.  I'd say if you were holding out for 125k you probably have an unhealthy attitude to risk.  If you hold out for 130k, because you "like the sweat" or #lovethegame, then you should be making your way down Gamblers Anonymous.  I am serious on this.

Poker staking is probably something between investing in shares and doing the deal or no deal example.  My instinct is that the risk premium from poker should be something like 10%.  Of course everyone's different and it depends very much on how much risk you want and how big your roll is.  This is purely tournament variance and doesn't factor in foreign exchange expenses, timing issues with payments or the risk of default from the stakee.

So if someone is a genuine 1.25 player, I don't think you should be looking at it unless you are offered shares at 1.15 or so.  Take some off that if you think there is going to be some foreign exchange risk and some more for your default risk.  Adjust if they aren't a 1.25 player, and add a bit if the tournament is soft, or live is soft.  1.25 was chosen because I think that is around the benchmark for a good internet player (sharkscope the ROIs of the better internet players in MTTs).  The 2 plus 2 thread suggest live is 1.3 or so*, and there is another study referenced which also got 1.3.  I just think that your average $1500 live event isn't really going to be that much fishier than your average $50 online donkament.

I expect quite a lot of the perceived edge in the WSOP main event can possibly be negated by the increased variance you get from that tournament.

On top of this, I think you can also factor in what kind of player you are.  If you can invest in yourself and get 1.25 long run, why invest in your equal if he is charging 1.25.  One has an expected return of 1.25, one has an expected return of 1?

I'll just add that you can never really absolutely prove anything using statistics, but

Big sample>>small sample>>unbiased opinion>>biased opinion.

On 2 plus 2, I did notice somebody complaining vociferously about 2000 tournament samples, while running a staking thread which emphasised hero's performance over 6 or so tourneys.   

Just my views

* There are flaws with that 2 plus 2 thread, but I don't think the number looks that far out.     

 

[edgascoigne]

Dan needs to look up "Cost of Capital". Only a person with effectively infinite money could rationally pay 1.49 for a <1% ROI with the variance of tournament poker.

... and risk premium in old school theory.

Buying costs should be deducted from any expected return, so that means the expected exchange costs from live poker clearly be in too.  This isn't the exchange rate movement which is a different thing.

..and grim risk should be factored in for some people.  If often somebody pays slowly, it would be reasonable to deduct for that too.

It is interesting Dan mentioned share traders, a lot of share traders wouldn't have a clue on the theory, they just "know" when to trade.  I expect Camel doesn't know the theory behind the price he quotes, just instinctively has a rough idea where it should be through experience.

Will give a better answer tomorrow.  Am up early in the morning.

 

Lildave has already won the thread, and this is all just theoretical.

Cost of capital and risk premium are pretty much the same thing.  I am old school so will stick to risk premium, despite having done some fairly recent cost of capital calcs in the day job.  And I expect if I produce a massive spreadsheet model for the WSOP then it might just be a touch geeky as well as time consuming.

Risk premium is the the extra amount over a risk free return you need for putting up with the variance of a particular stake/investment.

If I am investing I can put all my money in UK government bonds.  I can be pretty sure that I'll get the return expected at the date given.  People don't assume it is as risk free as it once was, but it is a good enough proxy.

If I invest in shares I am going to get a return, but I don't really know how much it will be.  There have been various studies that show that historically I am going to get 5 or 6% over bonds investing long run.  You can also have a good guess at it by starting from total dividend yields factoring economic growth and inflation in.  I remember lots of people saying it was too high around 2000, but you can guess how that ended.

People who invest in shares are at the riskier end of the investing public, so I think 6% is a good start for what the risk premium of investing in poker players should be.  You can compare the volatility of returns against that from poker tournaments and I'd be reasonable sure that your average stake has a lot more variance that your average share investment. 

Probably a good example of an investors attitude to risk is considering something like deal or no deal.  You get to the end and you have two boxes, £1k and £250k.  How close to £125k do you get before accepting the bankers offer?  You take 100k and your "deal or no deal" risk premium is about 25%.  I'd say if you were holding out for 125k you probably have an unhealthy attitude to risk.  If you hold out for 130k, because you "like the sweat" or #lovethegame, then you should be making your way down Gamblers Anonymous.  I am serious on this.

Poker staking is probably something between investing in shares and doing the deal or no deal example.  My instinct is that the risk premium from poker should be something like 10%.  Of course everyone's different and it depends very much on how much risk you want and how big your roll is.  This is purely tournament variance and doesn't factor in foreign exchange expenses, timing issues with payments or the risk of default from the stakee.

So if someone is a genuine 1.25 player, I don't think you should be looking at it unless you are offered shares at 1.15 or so.  Take some off that if you think there is going to be some foreign exchange risk and some more for your default risk.  Adjust if they aren't a 1.25 player, and add a bit if the tournament is soft, or live is soft.  1.25 was chosen because I think that is around the benchmark for a good internet player (sharkscope the ROIs of the better internet players in MTTs).  The 2 plus 2 thread suggest live is 1.3 or so*, and there is another study referenced which also got 1.3.  I just think that your average $1500 live event isn't really going to be that much fishier than your average $50 online donkament.

I expect quite a lot of the perceived edge in the WSOP main event can possibly be negated by the increased variance you get from that tournament.

On top of this, I think you can also factor in what kind of player you are.  If you can invest in yourself and get 1.25 long run, why invest in your equal if he is charging 1.25.  One has an expected return of 1.25, one has an expected return of 1?

I'll just add that you can never really absolutely prove anything using statistics, but

Big sample>>small sample>>unbiased opinion>>biased opinion.

On 2 plus 2, I did notice somebody complaining vociferously about 2000 tournament samples, while running a staking thread which emphasised hero's performance over 6 or so tourneys.   

Just my views

* There are flaws with that 2 plus 2 thread, but I don't think the number looks that far out.     

This is a really great post. Other thing I would emphasise that many have little idea of is the mind-boggling variance of relatively small +ve EV instances. I don't have much poker-specific knowledge of this, though it can't be that different to certain sports-betting models I have run, and I would say to a man everyone I have met tends, naturally, to underestimate variance.

[Rupert]

One thing worth mentioning is that the costs of staking are generally pretty low. Most people would pay about £10 every time they want to buy or sell shares. It allows people to make far smaller investments but still expect a decent return.

[The Camel]

Without digging too deeply in Alex's new venture, will it:

Charge both sides of the deal or just the stakee?

Offer financial protection against being scammed?

[smashedagain]

Without digging too deeply in Alex's new venture, will it:

Charge both sides of the deal or just the stakee?

Offer financial protection against being scammed?

He said yesterday that there'd been a hold up. Then I saw on Facebook a friend was pushing chipmeup with Tony G

[bobAlike]

Without digging too deeply in Alex's new venture, will it:

Charge both sides of the deal or just the stakee?

Offer financial protection against being scammed?

He said yesterday that there'd been a hold up. Then I saw on Facebook a friend was pushing chipmeup with Tony G

Chipmeup site looks a mess. Surely Alex could improve on that.

[smashedagain]

Wtf just happened was reading this up to page 10 of 14 and now only 5 pages

[TightEnd]

http://blondepoker.com/forum/index.php?topic=58457.420