Re: [vpFREE] Re: Pressing your bet

 

Ed wrote:

>If you bet your whole bankroll on any edge, then X percent of the time you
>will bust and then it's impossible to grow the bankroll. That severely
>limits your average bankroll growth.
>
>Kelly seeks to maximize the average rate of growth of a bankroll. In other
>words, if you bet according to Kelly at a +EV game then you will experience
>a greater average bankroll growth than if you bet any other way.

Maybe an example would clarify. Let's say there's a gambling
proposition, similar to blackjack, that pays even money and has a
50.5% chance of winning and a 49.5% chance of losing. That's a 1%
advantage and the Kelly Criterion says to bet 1% of one's bankroll on
it. Let's say, for ease of use, that one's bankroll is $10,000.
After 1 $100 bet, one's average bankroll has grown by 1% of 1%, or $1,
and is now $10,001. If one bets $10,000, after 1 trial, one's average
bankroll is (maximized at) $20,000 x .505 = $10,100. How does the
Kelly Criterion maximize average bankroll growth? The same comparison
can be made after the next trial, and so on, forever, the fact that
betting one's entire bankroll on any advantage runs the risk of losing
all of it notwithstanding.

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Re: [vpFREE] Mugged

 

Damn shame, but be thankful you weren't seriously injured
----- Original Message -----
From: <krallison416@aol.com>
To: <vpFREE@yahoogroups.com>
Sent: Tuesday, September 20, 2011 11:08 PM
Subject: [vpFREE] Mugged

>
>

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[vpFREE] Mugged

 

I was mugged in the parking garage of the Suncoast earlier tonight. Not
injured but definitely frightened. He came up behind me and pulled a
necklace off my neck, breaking the chain, said, "I'm sorry" and ran off toward
the exit. I was within yards of the exit by the moving sidewalk and near my
car, walking at a reasonable pace. I called 911 at once and the police
were there within minutes. I also stopped a bicycle patrol. I was able (I am
a professional) to give a good description which I was told matched the
one on film exactly. They actually stopped someone on the lower level but I
could not say if it was he - I saw a caucasian and this young man was a
light-skinned Black. Also I saw a normal amount of hair and he had a short
buzz cut. And his shirt, while the right color, had a pattern I did not
remember. So let's say the jury is out. (Of course they had me try to
identify him not in a line-up but rather at a distance straight ahead of me as I
sat in the police car.

I assume Suncoast has no liability -- does anyone know different I can't
think they are responsible for this occurrence, though my heart says they
should be? I was proffered no release nor did I sign one. The jewelry was
more sentimental value, perhaps a couple of hundred , and the chain he
wanted was a shipboard gold plated one worth maybe $50. Nonetheless if they
find my little charm, I would want it back.

I have no advice - I am almost six feet tall and do not consider myself
victim material but here I am, age 70, reporting the second mugging of my
life.



Karen

" I've never wished a man dead, but I have read some obituaries with great
pleasure."
Mark Twain

[Non-text portions of this message have been removed]

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Re: [vpFREE] Re: Pressing your bet

 

Ed wrote:

>If you bet your whole bankroll on any edge, then X percent of the time you
>will bust and then it's impossible to grow the bankroll. That severely
>limits your average bankroll growth.
>
>Kelly seeks to maximize the average rate of growth of a bankroll. In other
>words, if you bet according to Kelly at a +EV game then you will experience
>a greater average bankroll growth than if you bet any other way.

I've heard the phrase that the Kelly Criterion maximizes average
bankroll growth for decades. I understand the formula of the Kelly
Criterion and how to use it. Since I understand that average bankroll
(and, as far as I understand what it means, average bankroll growth,
also) is maximized by betting it all on any advantage and that the
Kelly Criterion is much more conservative than that, I don't
understand what that phrase means. I suspect that no one who uses it
understands it, either, and that it needs revising. If you understood
it, I believe you could express it in different words. You only
repeated the phrase.

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Re: [vpFREE] Re: Pressing your bet

 

Ed wrote:

>If you bet your whole bankroll on any edge, then X percent of the time you
>will bust and then it's impossible to grow the bankroll. That severely
>limits your average bankroll growth.

Do you understand that average bankroll is maximized by betting it all
on any advantage?

>Kelly seeks to maximize the average rate of growth of a bankroll. In other
>words, if you bet according to Kelly at a +EV game then you will experience
>a greater average bankroll growth than if you bet any other way.

I was hoping you'd use different words. I still don't understand what
the Kelly Criterion maximizes.

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[vpFREE] Re: Pressing your bet

 

Are you the Ed Miller who writes a poker column?

--- In vpFREE@yahoogroups.com, Ed Miller <ed.miller@...> wrote:
> Which is why, to me, Kelly is not a useful model for the vast majority of
> gamblers. Most people who gamble aren't in the bankroll growing business.
> Even pro players aren't.

Maybe they are but they don't know it. Bankroll growing is kinda important in gambling, it allows you to move up to bigger EV games, and it allows you to cash out some for that big wish expenditure. But you do have to watch the cashouts, they effectively reduce your EV. If your EV is $100/hr, but your nut (cost) is $10/hr, your real EV is only $90/hr and you need to adjust to that.

> They are much more interested in bankroll
> preservation than optimal bankroll growth.

Kelly supports that. You can bet the optimal ratio, or some fraction, which reduces gain but also reduces risk, which is a valid tradeoff. Of course the ultimate is not to gamble at all, they you have full bankroll preservation. The no-go zone in Kelly betting is to overbet the optimal Kelly fraction, because then you are taking on more risk (more threat to your bankroll) in exchange for less bankroll growth.

If you want a book to read on Kelly, try "Fortune's Formula".

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[vpFREE] NY Times Article: "Poker Web Site Cheated Users, U.S. Suit Says"

 

http://www.nytimes.com/2011/09/21/business/poker-site-misused-players-money-us-says.html

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Re: [vpFREE] Re: Pressing your bet

If you bet your whole bankroll on any edge, then X percent of the time you
will bust and then it's impossible to grow the bankroll. That severely
limits your average bankroll growth.

Kelly seeks to maximize the average rate of growth of a bankroll. In other
words, if you bet according to Kelly at a +EV game then you will experience
a greater average bankroll growth than if you bet any other way. If you bet
more than Kelly, then you will occasionally experience too large a loss and
have to waste a lot of time "grinding" back up. If you bet less than Kelly,
then you will see more consistent profits, but you won't grow as fast as
Kelly.

Indeed Kelly won't "bust" a bankroll if "bust" is defined as taking it to
literally zero.

The catch is that the Kelly model requires you to increase or decrease your
wager with every change in your bankroll. So if you were playing "according
to Kelly" then the moment you lost a hand at a $0.25 machine, you'd have to
try to find a $0.2497 machine to play the next hand. Obviously this is
impossible.

So the reality of gambling is that you play $1 for a while and if you lose
you still play $1 until your bankroll takes a significant hit. Then you drop
down to $0.25. If you continue to lose then you drop down to $0.05. But at
some point, dropping down and playing for ever lower stakes becomes a waste
of time and more lucrative ways to spend your time-like getting a
job-predominate. So there's a point at which your bankroll is effectively
busted even if it's not literally zero, because the bankroll can no longer
support Kelly betting that will provide an acceptable hourly winrate.

This is why most people recommend betting less than Kelly if you are doing
this for a living, because betting full Kelly will increase the risk that at
some point you'll have to drop down to nickels (or whatever stakes are too
small to continue playing).

Which is why, to me, Kelly is not a useful model for the vast majority of
gamblers. Most people who gamble aren't in the bankroll growing business.
Even pro players aren't. They are much more interested in bankroll
preservation than optimal bankroll growth.

On the other hand, if you're Warren Buffett and your goal is to grow your
$50 billion company as fast as possible, Kelly will certainly inform your
decisions well.

Ed

On Tue, Sep 20, 2011 at 7:21 PM, 007 <007@embarqmail.com> wrote:

> **
>
>
> Ed wrote:
>
> >IMO, the Kelly Critereon is one of the most overused and misused concepts
> in
> >gambling.
> >
> >Kelly Critereon is a mathematical method for maximizing the rate of
> bankroll
> >growth at a +EV game with a known edge and variance.
>
> I must have a mental block about the phrase "maximizing the rate of
> bankroll growth," since I can't get past the idea that maximizing
> one's average bankroll requires betting one's entire bankroll on any
> advantage. How is maximizing the rate of bankroll growth different
> from maximizing average bankroll? In different words, can you explain
> what the Kelly Criterion maximizes?
>
>
> >It's not designed to ensure you don't bust your bankroll.
>
> I don't know if it was designed to do that, but, theoretically, it
> will have that effect.
>
>
>


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Re: [vpFREE] Re: Pressing your bet

 

Ed wrote:

>IMO, the Kelly Critereon is one of the most overused and misused concepts in
>gambling.
>
>Kelly Critereon is a mathematical method for maximizing the rate of bankroll
>growth at a +EV game with a known edge and variance.

I must have a mental block about the phrase "maximizing the rate of
bankroll growth," since I can't get past the idea that maximizing
one's average bankroll requires betting one's entire bankroll on any
advantage. How is maximizing the rate of bankroll growth different
from maximizing average bankroll? In different words, can you explain
what the Kelly Criterion maximizes?

>It's not designed to ensure you don't bust your bankroll.

I don't know if it was designed to do that, but, theoretically, it
will have that effect.

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Re: [vpFREE] Re: Pressing your bet

IMO, the Kelly Critereon is one of the most overused and misused concepts in
gambling.

Kelly Critereon is a mathematical method for maximizing the rate of bankroll
growth at a +EV game with a known edge and variance. It's not designed to
ensure you don't bust your bankroll. Also, the model assumes you can vary
your betsize at continuous increments (i.e., you can bet $0.27 a hand or
$0.09 a hand if the model asks you to) where real gambling usually involves
fixed tiers of stakes.

99%+ of people who gamble shouldn't even be thinking about Kelly. Why?
Because:

1. They don't play +EV games
2. They do play +EV games, but they can't really quantify their edge and/or
variance
3. They play +EV games with a fixed edge and variance, but they are more
concerned with making sure they don't bust their bankroll rather than
maximizing its growth rate.

Even professional gamblers typically aren't trying to maximize bankroll
growth rate because they are withdrawing a fixed amount from the bankroll
each month.

So the long answer to the original question is, no, there is essentially no
mathematical reason whatsoever to increase or decrease your wager size based
on your recent results. If it makes you happy to do so, then go for it. But
it's not "+EV" in any meaningful sense of that term.

Ed

On Tue, Sep 20, 2011 at 5:07 PM, Bob Dancer <bobdancervp@hotmail.com> wrote:

> **
>
>
>
> NOTI noted, with respect to multi-hand games: Varying number of hands
> played is EV neutral, but it does effect average bankroll growth. The
> approximate Kelly optimum is to bet edge/variance of your current bankroll.
> This is true for many but not al multi-hand games. Games like Triple Play,
> Five Play, Ten Play, Fifty Play, Hundred Play, and Super Times Pay, plus
> others, are EV neutral. Multi-hands such as Multi Strike, Ultimate X, Wheel
> Poker Deluxe, and Extra Action Poker, plus others, are NOT EV neutral.
>
>
> In most cases, whether you're winning or losing today should have nothing
> to do with your betsizing --- except in the probably rare cases that your
> gambling bankroll at the start of the day was barely enough to play a
> certain level (and you should move down if you're losing) or barely not
> enough to play at a certain level (and you can move up if you win.) Assuming
> we define bankroll as "the amount of money you can lose before you quit
> gambling," most players don't have an exact bankroll number for themselves
> anyway. Who among us can say, "If I lose $23,458.33 I'll quit forever and
> ever amen. Not one penny more!" We can say that BEFORE we begin that losing
> streak, but if and when that time actually gets there (assuming we can
> recognize the exact moment when our bankroll reaches such a level), many
> people will adjust their "drop dead' figure. Far more important than whether
> you are ahead or behind today is are you playing a game where you have the
> advantage? No stop-loss or bet-sizing strategy can make up for playing a bad
> game. When NOTI was talking about Kelly betting, this assumes a positive bet
> edge. A large number of players neglect the importance of this fundamental
> fact.
>
> Bob
>
> [Non-text portions of this message have been removed]
>
>
>


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RE: [vpFREE] Re: Pressing your bet

 


NOTI noted, with respect to multi-hand games: Varying number of hands played is EV neutral, but it does effect average bankroll growth. The approximate Kelly optimum is to bet edge/variance of your current bankroll.
This is true for many but not al multi-hand games. Games like Triple Play, Five Play, Ten Play, Fifty Play, Hundred Play, and Super Times Pay, plus others, are EV neutral. Multi-hands such as Multi Strike, Ultimate X, Wheel Poker Deluxe, and Extra Action Poker, plus others, are NOT EV neutral.


In most cases, whether you're winning or losing today should have nothing to do with your betsizing --- except in the probably rare cases that your gambling bankroll at the start of the day was barely enough to play a certain level (and you should move down if you're losing) or barely not enough to play at a certain level (and you can move up if you win.) Assuming we define bankroll as "the amount of money you can lose before you quit gambling," most players don't have an exact bankroll number for themselves anyway. Who among us can say, "If I lose $23,458.33 I'll quit forever and ever amen. Not one penny more!" We can say that BEFORE we begin that losing streak, but if and when that time actually gets there (assuming we can recognize the exact moment when our bankroll reaches such a level), many people will adjust their "drop dead' figure. Far more important than whether you are ahead or behind today is are you playing a game where you have the advantage? No stop-loss or bet-sizing strategy can make up for playing a bad game. When NOTI was talking about Kelly betting, this assumes a positive bet edge. A large number of players neglect the importance of this fundamental fact.

Bob

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[vpFREE] Bob Dancer's LV Advisor Column - 20 SEP 2011

 

Bob Dancer's LV Advisor Column - 20 SEP 2011

"A Look at Extra Action Poker"

http://www.lasvegasadvisor.com/bob_dancer/2011/0920.cfm

<a href="http://www.lasvegasadvisor.com/bob_dancer/2011/0920.cfm">
http://www.lasvegasadvisor.com/bob_dancer/2011/0920.cfm</a>

*************************************************
This link is posted for informational purposes
and doesn't constitute an endorsement or approval
of the linked article's content by vpFREE. Any
discussion of the article must be done in
accordance with vpFREE's rules and policies.
*************************************************

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[vpFREE] Re: Pressing your bet

 



--- In vpFREE@yahoogroups.com, "nightoftheiguana2000" <nightoftheiguana2000@...> wrote:
>
> Varying number of hands played is EV neutral, but it does effect average bankroll growth. The approximate Kelly optimum is to bet edge/variance of your current bankroll.
>
> http://members.cox.net/vpfree/Bank.htm
>

Thanks, this is what I was looking for.

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