Really good tweet about Variance & Decision Making

Tweet is here: https://mobile.twitter.com/JohnSmi31...32675631296512

I really like this guy ... not afraid to tell it like is and has a good head on his shoulders.

Tweet is: “The more I do this I realize a key to success is to be unemotional with big swings. Last week low, down $4,200. High up $10,400. Finish, up around $2,000. What I care about most, did I only take good plays and avoid tilt and Degen mode? Yes! So good week!“

The guy is so close but gets it wrong. It’s not actual wins or losses it’s $EV.

Recall a simple estimate is bird in hand is worth two in the bush (per CE theory): $1 win is worth roughly $2 in EV. So if the guy claims he was up $10,400, then he was stating (unbeknownst to him) that he found roughly $20,800 in $EV. CE is just one of many frameworks to understand this situation.

You can read this paper: http://canjarrm.faculty.udmercy.edu/InsurancePaper.pdf for the definition to approximate CE using EV and your bankroll, etc. Appendix 2 derives this formula.

Here is the common mistakes that APs, Scavengers, etc make:
- failure to look at $EV vs actual wins or losses
- the hustler get tested on things he controls, which is chasing $EV; the hustler DOES NOT have any control on the actual wins or losses.

Had the guy in the tweet substituted $EV for the $2,000 actual result, he would have been right on the money. It would have been nice if he shared with us how his wins and losses (aka the $14,600 swing) compared with his $EV, respectively.

I don’t play high variance crap so I don’t have these types of swings and rarely do I get stuck during a play; “stuck” means being down or losing money on the play but cannot leave due to the amount of equity in the current play, respectively.

I test prospective teammates and I ask a simple question: How can you tell if someone is a good hustler, for example suppose you had to rank hustlers based on skill, etc?

The typical response I get is the best hustlers make money more. It’s the wrong answer.

I tell them suppose two hustler walked into the same casino with $100 each at the same time and each had 4 hours to produce results. Suppose Hustler A was the best and he only ended his shift with $300. Hustler B ended his shift with $10,200 because he got lucky being a Degen and won a $10,000 jackpot. The fact Hustler B ended up with more more doesn’t prove he is better. Luck is not skill.

So making more money is not the correct answer. The correct answer is the ratio of $EV realized based off the opportunity set of $EV. The better hustlers (as a general comment) has to have found a larger opportunity set of $EV than an inferior hustlers, respectively. The first part is how much of a pool of $EV did you find. The second part balances low variance to high variance plays. You have to decide if you want a guy who consistently hits singles and doubles versus the guy who is always swinging for the fences.

Mega million can have high $EV per ticket but the variance is insane.

The guy who is skilled is someone who can find the largest pool of $EV and convert as much of that into realized results.

It’s not the guy who gets lucky and wins a $500K WAP jackpot ... that’s luck, not skill.

One more thing, you can have a top Hustler in a tight market (lots of competition) and can’t make very much while a second class hustler can clean up in a loose market (without any competition).

In summary: it’s ACTUAL vs POTENTIAL and the guy in the tweet needs to compare his actual results with his potential results for the week, respectively.

The two hallmarks are: (a) ability find huge amounts of $EV and (b) conversion ratio, ability to convert that $EV into cold hard cash.

I don’t play $10K Ainsworth’s MH but if I find one, I will monetize it for a finder’s fee. My ability to monetize the $EV helps convert that into cold hard cash. I get a ton of finder’s fees on other MH’s as well.

I spend a lot of time prospecting and learning new bonus machines so I teach it to people in my network at different casinos. The rule is I get 10% bounty if they hit a W2G, otherwise they keep all profits from the game. It’s a win-win situation as I leverage my ability recover my prospecting investment costs. It kind of like getting royalty checks (as gifts) in the mail. These people love to brag about their big wins and that is how I know I will be getting a check or cash soon.

So I spend time learning the game, I teach the game to my “franchise” and each “franchisee” pays a conditional bounty / royalty. Getting trustworthy people in my network is key. For them, they get a steady supply of detailed information on how to beat games before other hustlers. It’s a good system. In the past, I bankrolled people and when I got burnt I knew I can to come up with a new arrangement that works for both parties.

Ability to find $EV and high conversion ratio RULES!! Making money in my sleep or when I am not in a casino is the greatest feeling. It is such a great feeling getting these monthly bounty payments.