Some comments:
Bob wrote: "If someone somehow had an accurate number as of last night, how often is it recalculated?"
Recalculated every time there's a change in money out or money in. Having an accurate number is the field of accounting. Sloppy accounting generally causes problems.
IF YOU PLAY 800 HANDS AN HOUR, AND ASSUMING THAT 200 OF THEM END UP WITH "BREAKEVEN" SCORES, THIS MEANS YOU NEED TO RECALCULATE YOUR BANKROLL 600 TIMES AN HOUR. i CAN'T SEE ANYBODY DOING THAT. CALLING SOMEBODY WHO DOESN'T DO THAT "SLOPPY" SETS AN IMPOSSIBLY HIGH STANDARD.
Bob wrote: "How does he account for free play that he knows is coming?"
The simple answer is it doesn't count until it actually goes into the bankroll, the more complex answer has to do with present value versus future value, cash basis versus accrual basis.
http://en.wikipedia.org/wiki/Basis_of_accounting
THAT'S ONE WAY TO DO IT. USING PRESENT VALUE IS ANOTHER VALID WAY TO DO IT. THERE IS NO ONE UNIQUE WAY. YOU ARE NOT PRESENTING YOUR RESULTS TO SHAREHOLDERS OR THE GOVERNMENT SO YOU CAN USE WHATEVER METHODOLOGY THAT MAKES SENSE TO YOU.
Bob wrote: "How does he monetize comps?"
If $1 comp can be monetized to $1 cash, it is worth $1, when monetized. Otherwise there are different ratios.
THIS STATEMENT IS LARGELY TAUTOLOGICAL. IT DOESN'T REALLY EXPLAIN ANYTHING.
Bob wrote: "If you own a house and are willing to put a $200,000 mortgage on it if your gambling bankroll goes down to zero, should you consider that $200,000 as part of your bankroll?"
Yes, this was the original use of a property mortgage, for example a farmer would mortgage a part of his farm to buy a new tractor, presumably he felt that was plus EV. Make sure to account for the interest on the debt. That's a collateral loan, you are effectively monetizing property. A no collateral loan is a leveraged bet, which under the Kelly system you would never do. Gamblers typically take out "markers" which are zero interest loans and can often come with loss rebates, either implied or actual. A loss rebate can make a marker attractive to Kelly gamblers.
google.com/search?q=gambling+marker
KELLY IS ONE (EXCELLENT) SYSTEM IF YOUR GOAL IS TO GROW YOUR BANKROLL AT THE MAXIMUM RATE. THERE ARE OTHER VALID GOALS. kELLY IS NOT THE END ALL OF METHODS.
Bob wrote: "In one of Stanford Wong's books, he defined bankroll as the amount of money you're willing to lose before you give up gambling. I like that definition, but when push comes to shove, I don't know how to calculate it. If you have a current bankroll of $20,000, it's one thing to SAY that if your gambling bankroll decreases to $2,000, you're going to stop gambling "forever and ever amen." It's another thing entirely to ACTUALLY QUIT at that time."
Having a hard "stop loss limit" is important anytime you're dealing with a possibly addictive behavior. If you can't set a stop loss limit and keep it, you should avoid that activity because you are likely to descend into addiction.
NO ARGUMENT THAT ADDICTIVE PERSONALITIES "SHOULD" DO THIS. BUT THE CLOSER TO HAVING AN ADDICTIVE PERSONALITY YOU ARE, THE LESS LIKELY YOU'LL STOP WHEN YOU REACH THAT LIMIT.
DISCUSSING THESE THINGS IS IMPORTANT FOR ANYONE WHO GAMBLES WITH NON-TRIVIAL AMOUNTS OF MONEY. i WENT BROKE IN THE LATE 70S DUE TO GAMBLING LOSSES. i HAD TO BITE THE BULLET AND GO GET A JOB. AT THE TIME i HAD TO ADMIT TO MYSELF THAT I DIDN'T HAVE WHAT IT TOOK TO SUCCEED AS A PROFESSIONAL GAMBLER. TODAY I HAVE BETTER SKILLS AND MORE DISCIPLINE. i'M ASSUMING THAT I'LL NEVER GO BROKE AGAIN --- BUT IT'S IMPOSSIBLE TO KNOW THAT 100% POSITIVE SO LONG AS i CONTINUE TO GAMBLE.
BOB
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