Tuesday, August 17, 2010

Equity Comments

After my drubbing at the hands of mental midgets in L.A. I made some remarks about the equity I'd generated in a few of the tournaments. Afterwards there was feverish debate in the comments section of my blog!

Actually there were only two comments, but they were both great (amazingly no one called me a pussy in either of them!) and deserving of a response.

Here are the comments:

Before I say my comment, I'd like you to know I enjoy your blog. It is entertaining and sometimes informative, so please don't stop what you are doing based on a negative comment or two.

I feel like you put too much emphasis on the "Equity" of your chips at a certain stage. The reality is everyone has a similar equity, but only ~10 actually realize some of it and cash. And, nobody ever gets the equity of what their chips were worth. When you bust in the money and had an average stack (call it 12x buy in), you still probably only get 2x your buy-in back. When you get all the chips in the tournament, you still only get the top prize (call it 20% of the prize pool).

What I'm trying to say is, you will always feel like you are running below expectation if you look at that. I don't know specifically what you should look at, but I know that isn't it.

Here is the second one:

"Actually dollar value and chip value usually correspond pretty well throughout the middle portion of MTTs. for example, when playing cashout tournaments, the best EV option is to only rarely cashout for dollar value.
you're right, though, that toward the end, like the final table, chip values and dollar values won't correspond- larger stacks will represent inflated EV, and shorter stacks will underestimate EV."

btw i enjoy the blog-

I agree with both of you. If you have 1% of the chips and no money has been paid out then those chips are worth 1% of whatever is in the prize pool, but that's not really what you should be focused on.

First of all, if you start looking at the equity of the chips you had at your maximum for every tournament you'll convince yourself that you must be the unluckiest person in the world. The frequency with which you double or triple your starting stack is not even close to the frequency that you'll end up doubling or tripling your money.

Also just because you have what it takes to accumulate some chips early on doesn't mean you have what it takes to be a long term winner in tournaments. Plenty of players have no trouble in the early stages and then get nervous when they get close to the money. The give up clear advantages to avoid the risk of going broke and in the end kill their long term chances of profit. The same thing happens to an every greater degree at the final table where players use the lowest risk tactics, instead of the best ones.

I only mentioned the equity I'd generated in the L.A. tournaments because I was trying to think of the best way to quantify that I'd actually played really well in the L.A. tournaments even though I had nothing to show for it.

Thanks again for the comments!

Also briefly to Luis, I don't expect to go for Supernova Elite on Pokerstars next year. The effort required is more than I'm willing to put in, and I've found the limit games on other sites, to be for the most part, a little (or a lot) softer. I do miss playing on pokerstars though. Their software, service, and game selection is by far the best, but the profit margins are not there.

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