True ROI of Top Players at the WSOP This year

[neeko]

"If a player puts a staking request out and it sells out then they priced it too low, if it does not sell out then they are too high. "

True. But this is a combination of things including forum popularity, reputation and being able to market themselves.  Someone selling out at 1.5 doesn't mean that they are 1.5 against the field.  In fact someone selling at 1.5 would mean that they are actually saying that they are even higher than this as the staker is taking on credit risk which would should be priced into the model (and will differ according to past actions of the stakee).

Very true and this is why Marc Wright sells at below his expected ROI due to perceived reputational risk.

[SuuPRlim]

I actually think Marc's prices are quite fair. his ROI is big AND because of his volume it's likely quite accurate, what Marc does which is the right thing is he makes sure people buying are getting a nice chunk of the roi as well.

[smashedagain]

If we know for 100% that a player has an ROI of 50% in a tournament, then he should, imo charge AT MOST 1.2 : 1.

He cannot charge 1.5, that is ludicrous. If I buy 50% of someone in a £1000 tournament at 1.5 where the expected return is £1,500, then I will be paying £750, and expecting a return of.....£750.....what I am doing is I am paying the seller £250 so I can flip on the variance of his tournament play, sometimes he his full buyin, sometimes he wins 5 buyins or w/e so I'm just blindly punting on which time he wins/loses, this is not a profitable investment for me.

He on the other hand is investing £250, and expecting a return of £750, which is now an ROI of 200%.  This is such a common misconception that ROI should = MarkUp.

I think that the "fairest" way to decide would be to half the action, so you, and your investor get to spit your ROI equally, so our 50% ROI player enters his £1000 tournament, I buy 50% at 1.25,  costing me £625 and am expecting a return of £750, I make 20% on my money, which is a good investment. He invests £375 and is expecting £750 in return, increasing his ROI to 100%.

Then I think you should reduce the mark-up by about 20%, to account for the times you don't play your best, are feeling a little ill and so on. the 50% ROI you are claiming is based on your top game, it's rare you will exceed your own level of ability, but qiute possible you wont be 100% on it, so it's only fair to reflect this in the price.

Some of the mark-ups at this WSOP are jokes, people like Galen Hall are so deluded it's ridiculous. Galen is a really good player but the foundation for his own opinion of his actual value in a poker tournament is based on results that are hugely above EV.. Self addmissoin of >100 live tournaments and 2 years as a pro, meaning he could have played MAXIMUM 1 $100k PCA high roller and 3 PCA main events.

PCA fields generally accepted to be the strongest out there, so lets go mental and give him a 150% ROI  (which is literally IMPOSSIBLE) in the main and a 100% ROI in the High Roller (again not even close to being possible)

His total profit from 4 tournaments (likely to be at LEAST 5% of his lifetime sample) is $2,672,900 whereas his "EV" of those tournaments (giving him an ROI likely to be 3 times what his true ROI is) is +$145,000 so he has run over $2,500,000 over EV in what is about 5-6% of his lifetime sample. I know this is true of ANY tournament and tournament winner but the point that me explaining it clarifys is that piece taking in tournaments is nothing but a HUGE, HUGE PUNT.

Providing you're not buying pieces of Galen Hall in the toughest tournament in the world at 1.6 : 1 and you know a bit about tournaments + tournament players you'll almost certainly be getting the best of it, but thats almost irrelevant.

Just so you know if you ever actually get down as low as having to tip the strippers in singles, you are defo good for 1.5 sell out round here.

[DMorgan]

fwiw what I posted is the mathematical solution to the problem and 1.5 is the price that maximises total EV. In that situation, all of the EV goes to the seller of course. That actually has very little relevance to tradition poker staking arrangements because the price (markup) is fixed which is a market imperfection.

To put it into a more poker-related context if my proven, real ROI was 50% in a tournament and I wanted to do an auction to sell for it then the final price would be 1.5

[Cf]

fwiw what I posted is the mathematical solution to the problem and 1.5 is the price that maximises total EV. In that situation, all of the EV goes to the seller of course. That actually has very little relevance to tradition poker staking arrangements because the price (markup) is fixed which is a market imperfection.

To put it into a more poker-related context if my proven, real ROI was 50% in a tournament and I wanted to do an auction to sell for it then the final price would be 1.5

But why would anyone pay 1.5? What is in it for them?

[smashedagain]

fwiw what I posted is the mathematical solution to the problem and 1.5 is the price that maximises total EV. In that situation, all of the EV goes to the seller of course. That actually has very little relevance to tradition poker staking arrangements because the price (markup) is fixed which is a market imperfection.

To put it into a more poker-related context if my proven, real ROI was 50% in a tournament and I wanted to do an auction to sell for it then the final price would be 1.5

But why would anyone pay 1.5? What is in it for them?

Dan sold at 1.5. And People bid upto 2.0 on Keys on there wsop staking threads.  Pretty sure those that  bid/ paid were happy with their investments.

[DMorgan]

Actually I'm having a bit of a brain freeze as to why anyone would actually made the 1.5 bid, but getting to 1.49 is easy

If you know for sure that your true ROI was 50% and you ran an auction, investors are always going to bid higher because why would they let bidder A win a slice at 1.1 when they can bid at 1.11 and make a profit? This process continues until the price reaches 1.49 because everyone that bids is printing money.

[The Camel]

fwiw what I posted is the mathematical solution to the problem and 1.5 is the price that maximises total EV. In that situation, all of the EV goes to the seller of course. That actually has very little relevance to tradition poker staking arrangements because the price (markup) is fixed which is a market imperfection.

To put it into a more poker-related context if my proven, real ROI was 50% in a tournament and I wanted to do an auction to sell for it then the final price would be 1.5

I doubt very much it would.

if I am buying a piece of someone at 1.5, I would have to very confident his ROI was considerably higher, or else  there is no value for me.

[SuuPRlim]

piece taking in tournaments just inst a viable or strategically profitable endevour, so all the hours people spend working out who's mark-up is what, true roi is etc. to try formulate a system for piece taking is wasting their time.

It's a punt, you like the player, price seems good and you can afford it/feel like a decent little gamble, then you punt. That's how it works im afraid to tell everyone

Piece taking in cash games is however totally different and you can legitimately print money doing that.

[DMorgan]

If the price is there at 1.45 and you don't want to bid on something that has a real ROI of 50% then you are setting fire to money.

Two caveats to that would be (a) bankroll management or (b) opportunity cost if you think that a better spot is going to come along and gl finding that.

I'm not going to argue this point again because its an absolute bona-fide-oxford-english-dictionary-bank-of-england fact.

Ask a stocks trader if you don't believe me.

[The Camel]

If the price is there at 1.45 and you don't want to bid on something that has a real ROI of 50% then you are setting fire to money.

Two caveats to that would be (a) bankroll management or (b) opportunity cost if you think that a better spot is going to come along and gl finding that.

I'm not going to argue this point again because its an absolute bona-fide-oxford-english-dictionary-bank-of-england fact.

Ask a stocks trader if you don't believe me.

Finding out the true ROI of someone is virtually impossible. Working to 0.05% is unrealistic.

Plus there are other factors in play.. foreign exchange fees and a chance of being grimmed are 2 that spring to mind and I'm sure there are others.

If I think someone is 1.5, I would probably pay as much as 1.3 to cover margin of error and other factors.

[pokerfan]

If the price is there at 1.45 and you don't want to bid on something that has a real ROI of 50% then you are setting fire to money.

Two caveats to that would be (a) bankroll management or (b) opportunity cost if you think that a better spot is going to come along and gl finding that.

I'm not going to argue this point again because its an absolute bona-fide-oxford-english-dictionary-bank-of-england fact.

Ask a stocks trader if you don't believe me.

Finding out the true ROI of someone is virtually impossible. Working to 0.05% is unrealistic.

Plus there are other factors in play.. foreign exchange fees and a chance of being grimmed are 2 that spring to mind and I'm sure there are others.

If I think someone is 1.5, I would probably pay as much as 1.3 to cover margin of error and other factors.

Ha, that's almost a favour Keith, 1.25 max 

[DMorgan]

For the sake of completeness I read Cf's post as taking the assumption that we knew with 100% certainty that the players ROI was 50%

Obviously as our level of confidence in that number decreases then the maximum markup we would pay should decrease but if we know for sure that the players ROI is 50% then as I said, not buying at 1.49 is burning money. If you want to include stuff like grim risk and exchange rate fees (which should be pennies and zero respectively for a rational* investor) we might as well start compensating for plane crashes and air quality in the tournament room too.

*rational as defined mathematically, as in even if the horse binks a million you can still get it changed as spot because the investor has no desire to pay a premium to have all of the money right away in his bank account in his currency.

[The Camel]

For the sake of completeness I read Cf's post as taking the assumption that we knew with 100% certainty that the players ROI was 50%

Obviously as our level of confidence in that number decreases then the maximum markup we would pay should decrease but if we know for sure that the players ROI is 50% then as I said, not buying at 1.49 is burning money. If you want to include stuff like grim risk and exchange rate fees (which should be pennies and zero respectively for a rational* investor) we might as well start compensating for plane crashes and air quality in the tournament room too.

*rational as defined mathematically, as in even if the horse binks a million you can still get it changed as spot because the investor has no desire to pay a premium to have all of the money right away in his bank account in his currency.

Obviously we have wires slightly crossed, you are talking from a purely theorectical and mathematical perspective and I am talking in the real world.

Obviously if I completely certain of a 1.5 ROI I would pay 1.49.

But it is impossible to know anyone's ROI in any indiivdual tournament.

And I am yet to find any bank which charges 0% fx fees!

[Doobs]

For the sake of completeness I read Cf's post as taking the assumption that we knew with 100% certainty that the players ROI was 50%

Obviously as our level of confidence in that number decreases then the maximum markup we would pay should decrease but if we know for sure that the players ROI is 50% then as I said, not buying at 1.49 is burning money. If you want to include stuff like grim risk and exchange rate fees (which should be pennies and zero respectively for a rational* investor) we might as well start compensating for plane crashes and air quality in the tournament room too.

*rational as defined mathematically, as in even if the horse binks a million you can still get it changed as spot because the investor has no desire to pay a premium to have all of the money right away in his bank account in his currency.

Obviously we have wires slightly crossed, you are talking from a purely theorectical and mathematical perspective and I am talking in the real world.

Obviously if I completely certain of a 1.5 ROI I would pay 1.49.

I can assure you isn't talking from a theoretical and mathematical viewpoint