Poker Poker Poker!: Re: [vpFREE] Re: Bankroll question

I want to throw a little cold water on this logic, since it's what I do.
First is the assumption that this bankroll is unreplenishable out to
infinity. This is the money you have, and you will never have a penny more
that you didn't win playing the game. For typical human beings, this is
kind of a silly assumption. Even if you're a pro, there are ways to add
money to the bankroll that don't involve playing FPDW.

Second, Kelly maximizes exponential bankroll growth. That's what it does.
If you bet slightly less than Kelly, your bankroll is likely to grow still
at an exponential rate, but slower than at Kelly. Same goes if you bet
slightly more than Kelly.

If you bet way more than Kelly, then your bankroll eventually completely
stops growing. But the Kelly number isn't some magical bright line across
which no bankroll shall survive. It is a maximum, and for practical
purposes, numbers slightly to one side or the other are also fine.

I'm not arguing that people should run around playing games for which they
are underbankrolled. Overestimating edge and underestimating variance are
the bane of many gamblers. But at some point if there's a machine you want
to play and you have a nice edge and your bankroll is close and you're
willing to accept some risk of ruin because, hey, you still have two hands
and a brain and these are not the last dollars you will ever see, just play
the darn game. This is particularly true if your plan is to play the game
for a weekend and not for every waking hour from here to infinity.

Ed

On Thu, Jan 22, 2015 at 2:04 PM, 'vtroy216@yahoo.com' vtroy216@yahoo.com
[vpFREE] <vpFREE@yahoogroups.com> wrote:

>
>
> Thank you for this explanation which I could actually follow. But it
> brings up a question: in your example, if you could only afford to lose the
> amount OVER ($2895) the Kelly bankroll, then what's the other $17105 for?
> Are we never to risk the bankroll portion?
>
> ----- Reply message -----
> From: "nightoftheiguana2000@yahoo.com [vpFREE]" <vpFREE@yahoogroups.com>
> To: <vpFREE@yahoogroups.com>
> Subject: [vpFREE] Re: Bankroll question
> Date: Thu, Jan 22, 2015 12:35 PM
>
> vtroy216 asked: "It would probably be an interesting poll about how many
> of us use risk-of-ruin calculations and concerns when we go on a trip or
> casino visits, vs. how many of us just play with whatever we can afford to
> lose."
>
> I play with whatever I can afford to lose, but I use the Kelly criterion
> to tell me what I can afford to lose. If you know the betsize, edge, and
> variance of a gamble or "investment", you can estimate the Kelly bankroll
> in your head (betsize x variance / edge). That's the reserve, you can leave
> that in the bank, any EXTRA amount you can afford to gamble with. And
> that's the bleeding edge, if you want to be more conservative, double that
> amount.
>
> Example: I find a dollar FPDW machine. Sweet. Estimated Kelly bankroll is
> $5 x 26 / .0076 = $17,105. My current bankroll is $20,000, the good news is
> I can play. I take $2,895 (the amount my bankroll is over the Kelly
> bankroll) out in cash and start playing, unfortunately my luck is bad and
> after playing for some time the $2,895 (the amount I can afford to lose
> from my bankroll) is gone. I stop, I can no longer afford to play. Maybe I
> can make some money selling this machine to someone? Or work some deal with
> someone who has a bigger bankroll?
>
> If you want to be slightly more sophisticated, you can calculate Kelly
> numbers in advance, for FPDW the Kelly number is 2925, multiply by the
> betsize, in this case $5, to get the more accurate $14,625. Jazbo has some
> more numbers and a calculator here:
>
> Kelly Betting for Video Poker http://www.jazbo.com/videopoker/kelly.html
>
> Kelly Betting for Video Poker http://www.jazbo.com/videopoker/kelly.html
> 9/6 DB/DJ 9/6 Double Bonus with Double Jackpot. This game is appearing in
> Atlantic City. It is slightly positive even without cash back, but beware
> the variance! Pick'em
>
> View on www.jazbo.com http://www.jazbo.com/videopoker/kelly.html
>
> Preview by Yahoo
>
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