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Author: FoolTools Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1443  
Subject: Greetings, Fool! Date: 7/15/2000 11:29 AM
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Welcome to The Motley Fool Speaker's Corner Boards, we're glad you're here. This board was requested by heihojin.

If you have questions about how to use the message boards, click the 'Help' link above. If, after checking the help area, you have additional questions, comments, or concerns, please drop us a note at FoolBoards@fool.com.

The Speaker's Corner boards are provided as an individual area for Fools to sound off or have fun with their friends. All of our usual rules regarding solicitation and appropriate content apply.

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2 of 1443
Subject: Re: Greetings, Fool! Date: 7/15/2000 10:02 PM
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Hey ya'll,

After seeing related threads arise on multiple other boards, I thought I would request a folder devoted specifically to the discussion of all issues related to one of my favorite topics, gambling.

I'm a Poker player, personally. I'm not a recreational player; I'm a tough low-limit player who is moving up the limits and who has aspirations of playing professionally. I keep detailed records, and I'm beating the games I play. Although I enjoy the game, I play strictly for the money. I regularly play $6-$12 Texas Hold'em, $3-$6 Seven-Card Stud, and $4-$8 Omaha High-Low Split.

I also studied and played 21 (blackjack) for about a year prior to Poker.

Anyway, I don't anticipate all that much activity on this board, but at least it provides a nice little corner for us.


heihojin

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Author: VelvetPaws One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 3:45 AM
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Hello heihojin,

I must admit, you have me intrigued. Where do you play poker? How often? Do you know many professional players?

VP

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 4:03 AM
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Hey VP,

I play mostly at Casino Arizona in Scottsdale, AZ, and I average between 25 and 30 hours of play a week. I know a handful of professional players, but they are all locals who play the middle limits. You wouldn't recognize any of their names. :-)


heihojin

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Author: Knudsendd Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 10:57 AM
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Hello gamblers, Blackjack is my name and losing is my game. Just kidding. My wife and I are recreational gamblers, usually play BJ, she plays much heavier than I and sometimes wins big. I play conservative, using a money management system, and dont lose much or win much. Hope this board gets some ideas floating.

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Author: leehjones Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 12:45 PM
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[Heihojin writes]

<< I'm a Poker player, personally. I'm not a recreational player; I'm a tough low-limit player who is moving up the limits and who ha aspirations of playing professionally. >>

Hi all,
It's good to find Fools who are interested in gambling - it's a pet topic of mine.

If we're going to discuss gambling, then I think we ought to separate it into two important categories: +EV and -EV gambling.

"Wait - you didn't tell us what 'EV' is."

Oops, sorry - my bad. EV is "Expected Value". It's a statistical measure of how much you expect to win (or lose) in the long run of some probabilistic event (such as cards, dice, blackjack, etc).

If you are playing a game in which you have positive expected value (+EV), over the long haul you can expect to win money at the game, though of course you may lose in the short run. Conversely, if you're playing a game with negative expected value (-EV) then eventually you will lose money. It is as certain as death and taxes (though not the "death tax").

So, those of us that play +EV games are looking to actually make money. Those that play -EV games are in it for recreation with the *hope* of making a few dollars in the short term. Or perhaps hitting some sort of jackpot.

"What games are +EV and what games are -EV?"

Excellent question. Essentially all casino games (with the exceptions mentioned below) are -EV games. I mean, who do you think pays for the pretty lights and the free drinks, the volcanoes and Venetian canals? Games such as craps, blackjack (big asterisk here - more on that in a bit), roulette, day-trading, Caribbean Stud, slot machines, video poker (small asterisk) are all -EV.

Furthermore, no money management or betting system will beat a -EV game in the long run. You can tell me about the betting system that your brother-in-law's cousin has - it doesn't work. Fundamentally when you make a bet that has a certain -EV, you are losing money.

Here's a real world example: the casino game of craps has a house edge (a marketing term for -EV) of about 1%. Actually, not too bad by casino standards. Every time you make a pass-line bet at the craps table, you are statistically losing about 1% of that bet. You make a $100 bet, the casino gets $1. Of course, on any given event, you will win $100 or lose $100, but in the long run, the casino will win about 1% of the total bets you make on the pass line. And you can money-manage and betting-system your brains out - the casino still gets about 1% of your total bets (again, in the long run).

For some people, that's just fine - the drinks and pretty lights and chance of actually winning something during a given weekend are worth it.

"OK, what are +EV games?"

Poker (not video poker), played well. Blackjack if you count cards correctly and bet according to the count. Some video poker machines actually have +EV with perfect play. Sports betting if you're very very good at it (few people are).

I know a fair amount about the first two. In fact, I've written a book about poker called "Winning Low Limit Hold'em" about a version of poker called Texas Hold'em.

When you get into +EV gambling, you really don't think of it as "gambling" any more than a good Fool thinks of investing in CSCO or SUNW as "gambling". You're investing. Over the short term, your bankroll (investment fund) may go down, but in the long run, you'll profit.

A +EV gambler doesn't go to Vegas (or wherever) and think, "Well, I will play until I've lost $X, and then I'll be done." No, we go and play for X hours, and know that statistically in those X hours we will win $Y. We also must have a large enough bankroll to cover the downturns. There's actually a fair amount of theory devoted to how big one's bankroll must be to play certain games with a low chance of going busted.

Note that if you're playing a -EV game, *no* bankroll, not even Bill Gates', is big enough, because in infinite time, your bankroll will go to $0.

Goodness - I've gone on long enough. However, I'll check in here on occasion and see if I can add anything to the discussion.

Stay well, Fools.

Regards, Lee







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Author: leehjones Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 1:00 PM
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[VP writes]
<< Do you know many professional players?>>

I know a handful of professional players. I see many guesses about how many true professionals there are, but if you mean people whose *main* source of income is playing poker, it's not very many.

It's very very hard work. You have to start out with a bankroll that is big enough to last through the downward swings (which *everybody* has). You have to have the discipline to play well all the time, and the discipline to not go blow a big win on some new toy (the big win is just another sample in your curve).

You have to not only beat the other players at the table, but the "rake" - the amount of money the house takes out of the pot to pay for the tables and cards and dealers.

I find that most people who are smart and disciplined enough to make it as professional poker players can make *more* money in the "real" world. That said, there are some folks who truly want to live the life of being a poker professional, and are probably giving up some money to do what they love. That's a beautiful thing.

But if you go watch the biggest poker games at the Bellagio in Las Vegas, they are generally inhabited by people who made their money elsewhere, and choose to spend some of it playing very high stakes poker.

The "mid-limit professional" who Heihojin referred to does indeed exist, though the nagging question is "How many of them truly make money over the long term."

Heihojin, if you've not done so already, I encourage you to read Roy Cooke's book. It gives a great deal of insight into the life of a working poker pro. In fact, I'd encourage you to look up Roy the next time you're in Vegas (go to the Bellagio, look in the 20-40, 30-60, 40-80 hold'em games, you'll find him). Buy him a meal and pick his brain.

Poker professional: A hard way to make an easy living.

Regards, Lee

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 9:41 PM
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Heihojin, if you've not done so already, I encourage you to read Roy Cooke's book.

Thanks Lee - I'll definitely check it out. BTW, thanks for writing your book! I found it pretty useful when I was just starting out last year.

Hey, not a bad start...less than ten posts and we've already got a noted Poker author on the board. :-)


heihojin

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Author: Trick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 11:17 PM
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Lee said:
Note that if you're playing a -EV game, *no* bankroll, not even Bill Gates', is big enough, because in infinite time, your bankroll will go to $0.

I'm not sure I understand your point, Lee, nobody plays for an infinite time. That's the point, walking away at the right time is more than half the battle.

I play one of your -EV games, craps at maximum odds, and I win because I don't try and break the bank, and I am satisfied when I get up a certain fraction of my bankroll. I keep good records, BTW, and I'm a scientist who makes a living keeping honest records.

Admitted, it was a lot easier in the days of $1 tables, and it's very difficult now that many tables are $10, but the fact remains that none of this can be extrapolated out to infinite time.

Rick

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 11:19 PM
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When you get into +EV gambling, you really don't think of it as "gambling" any more than a good Fool thinks of investing in CSCO or SUNW as "gambling".

Actually, with triple-digit trailing P/E ratios I'd rather play Poker than be long CSCO or SUNW. :-)


heihojin

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 11:30 PM
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I'm not sure I understand your point, Lee, nobody plays for an infinite time.

It's all a matter of having the odds on your side, Rick. EV is also known as "expectation" in certain math textbooks.

For example, let's say I propose the following game:

1. I flip a coin.
2. If the result is "Heads," I give you $0.50.
3. If the result is "Tails," you give me $0.50.

Your expectation (or EV) for playing this game is 0, because over an infinite number of trials, you would lose exactly as much money as you won. It's what is known as an "even money" bet.

However, let's say I propose this game instead:

1. I flip a coin.
2. If the result is "Heads," I give you $1.00.
3. If the result is "Tails," you give me $0.50.

Your expectation for playing this game is $0.25. Over an infinite number of trials, you would expect to win $1 exactly half the time (a probability of 0.5), and you would expect to lose $0.50 exactly half the time (a probability of 0.5). So your expectation is E = ($1.00 * 0.5) + (-$0.50 * 0.5) = $0.25. This is the amount, on average, that you could expect to win every time you played this game. This is what Lee is referring to as a +EV game for you (and a -EV game for me).

Oh, and welcome to the board Rick!


heihojin

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Author: Trick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12 of 1443
Subject: Re: Greetings, Fool! Date: 7/16/2000 11:59 PM
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heyho said:
This is the amount, on average, that you could expect to win every time you played this game. This is what Lee is referring to as a +EV game for you (and a -EV game for me).

Thanks, I got that. But when he made his claim that it was impossible for anyone's bank roll to cover the downturns, basically claiming it impossible to win, he was doing it referring out to infinity time. I'm not sure of the relevance of that model to betting in the controlled circumstance of a casino.

Rick

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13 of 1443
Subject: Re: Greetings, Fool! Date: 7/17/2000 12:51 AM
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But when he made his claim that it was impossible for anyone's bank roll to cover the downturns, basically claiming it impossible to win, he was doing it referring out to infinity time. I'm not sure of the relevance of that model to betting in the controlled circumstance of a casino.

Well, it is impossible to win at a game with negative expectation in the long run. This was the gist of the discussion with Raken and his Roulette "system."

Of course, in the real world, there will be some people who do walk away from playing a -EV game with a positive result, even after days, weeks, months of playing. But if they continue playing that game, the odds are that they will go broke.

An example would be one of the big lottery jackpot winners. Most lottery games have a negative expectation, because the odds against you are higher than the payoff if you win. But there are winners, some to the extent of several million dollars. Even though these individuals may walk away with a net positive result from playing, this is not a representative sample of the long run - not even after several thousand tickets. The mathematical certainty is that if they were to "reinvest" all lottery winnings into the same game with the same negative expectation, and continue to do so ad infinitum, they would go broke.

Of course, this doesn't happen in real life. In real life, what we have is a few big winners, and a lot of little losers as the result of any lottery game. Because there is little you can do to influence the outcome of a lottery, your only choice is whether or not to play.

If your intent is to maximize the amount of money won, then you should choose not to play a game with a negative expectation, such as most lotteries, Roulette, Craps, etc. But if entertainment is your goal, there's nothing wrong with a few sessions of Craps. :-)


heihojin

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Author: leehjones Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14 of 1443
Subject: Re: Greetings, Fool! Date: 7/17/2000 11:43 AM
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Rick said:

<<I'm not sure I understand your point, Lee, nobody plays for an infinite time. That's the point, walking away at the right time is more than
half the battle. >>

Au contraire, mon Fool. Walking away at the right time is really *none* of the battle. There will be sessions (goodness knows, I've had 'em) where you lose your first bet, and never get into the black. If you try to walk away with a fixed sized win, then those nasty never-get-ahead sessions will do you in. To the tune of about 1% of your total bets.

<<I play one of your -EV games, craps at maximum odds, and I win because I don't try and break the bank, and I am satisfied when I get
up a certain fraction of my bankroll. I keep good records, BTW, and I'm a scientist who makes a living keeping honest records. >>

For those watching on the side, "odds" is a bet that the casino offers craps players who are betting the pass line (or don't pass line). It has no house (nor player) edge, so the ultimate effect is to reduce the overall house edge on the total money you wager. But not to zero.

I didn't mean to suggest, BTW, that I expect anybody to play for infinite time. My point is that if you continue playing a -EV game, you will in all likelihood lose. No money management system, walk-away-with-a-win system, betting system, or other "system" will beat a -EV game. As Heihojin said, you may beat that game for an hour, a weekend, a year, or perhaps even your whole lifetime (presumably such incredibly lucky people exist). But if you do so, it will be because you're lucky, not because of anything you did.

<< Admitted, it was a lot easier in the days of $1 tables, and it's very difficult now that many tables are $10, >>

I'm afraid I don't follow your argument. Why should the dice care about the color of chips you're betting? If your system works for $1 craps bets, it should work for $10 (or $1,000,000) craps bets.

<<but the fact remains that none of
this can be extrapolated out to infinite time. >>

Actually, the stats guys are a whole lot more accurate when you let them compute their results over eternity :-).

Regards, Lee

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Author: JKorenthal Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 15 of 1443
Subject: Re: Greetings, Fool! Date: 7/18/2000 8:36 AM
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Cool board heihojin, should generate some fun discussions!

I'm not a "serious" gambler -- as heiho knows, I like low-stakes backgammon. When I'm at a casino (not often but maybe more when gambling finally gets approved in the Catskills) I usually put my brain in park and just watch the pretty lights for a while hoping to hit a progressive jackpot. Yeah I know, I know, but I'm there just for dumb entertainment and I only gamble about a hundred bucks at a time so I'm not really looking for the best odds.

Anyway, the reason for this post (other than to just say hi) is to mention a betting system which can beat any -EV game. It's called, umm, the Martingale system? Martindale? Something with an M. I'm sure heiho and Lee already know about it. It works like this, on any game which pays 1-1:

Bet one chip. Lose. You're down 1.
Bet two chips. Lose. You're down 3.
Bet four chips. Lose. You're down 7.
Bet eight chips. Win. You're up 1.

So the idea is, you keep doubling your bet and eventually you'll win and be up one chip. Rinse and repeat as desired.

I was telling my kids about this just the other day (corruption is a *dad's* responsibility [g]). When I asked them what the fallacy in the system was, I was very proud of my 11-year-old son for saying, "Dad, are you always allowed to bet as much as you want to?" Good thing we found his missing scooter -- I don't want him getting too interested in this stuff! :-)

+EV to all,
Jim

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Author: aps3 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16 of 1443
Subject: Re: Greetings, Fool! Date: 7/18/2000 10:24 AM
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I play one of your -EV games, craps at maximum odds, and I win because I don't try and break the bank, and I am satisfied when I get up a certain fraction of my bankroll.

Is this akin to always selling a speculative stock when it increases a fixed amount? A friend of mine does that w/ stocks; sells whenever they gain or lose 20%.

Admitted, it was a lot easier in the days of $1 tables, and it's very difficult now that many tables are $10, but the fact remains that none of this can be extrapolated out to infinite time.

In that $1 tables allow you to lose money more slowly than $10 tables, right?

I've been playing blackjack on the PC-SAS gaming module. Fine use of expensive software. You definitely learn the value of being satisfied w/ particular winnings...

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Author: Trick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18 of 1443
Subject: Re: Greetings, Fool! Date: 7/18/2000 4:32 PM
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aps said:
In that $1 tables allow you to lose money more slowly than $10 tables, right?

The beauty of craps is that you can load up your bet with odds or on the numbers whenever a streak starts. If you have to wait for a streak at $10/roll, it's expensive, much less so at $1/roll.

Rick

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Author: heihojin Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 32 of 1443
Subject: Re: Greetings, Fool! Date: 7/19/2000 4:09 AM
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Anyway, the reason for this post (other than to just say hi) is to mention a betting system which can beat any -EV game. It's called, umm, the Martingale system?

Hey Jim,

I believe it's called the Martingale system. Although it's often touted as a winning system even for games with negative expectation, it's really just the system that loses the least.

The problem is that if you play a negative expectation game for long enough, you will eventually run into the problem with the table limit. Even though it's difficult to conceive of losing enough games in a row to get to that point, it will happen if you play long enough.

There is no betting system that can give you an edge in a game with negative expectation. None.


heihojin

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