Expected Value Discussion

[a2a3dseddie]

I'm a T-Mobile customer and I accidentally deleted a text message with my key to a gambling account that was holding $31-million of positive EV.

You can mock all you like Mr. Mendelson. All it does is continue to show your ignorance on the subject matter.

Is there anyone else out there somewhat confused over the discussions of EV?

With due respect to Alan and kewlj I understand both your points of view.

I also liked redietz's analogy:

I know nothing about this, but I'll take a stab.

Mr. Mendelson, say you are playing hold 'em, and five times in a particular day, you trap some poor boobs one-on-one into going for flushes on the river while you have them beaten if they don't catch. You lose every single time. When the day is finished, you've gotten murdered financially, yet you did every blessed thing correctly.

Since there are formulas for determining what are the right poker plays, given that you can profile people at the table, you would have tested out as having, in terms of likely income, your best day ever. Yet you actually lost money.

Now, is it more helpful to your long term poker success to think that (A) you played your best poker ever or (B) that you played terrible and should play differently going forward? Which is the appropriate advice to yourself for future poker endeavors?

And regnis's take:

I don't remember the exact quote that KJ made about the -$8500 being a great day. In whatever context and whatever the exact quote may be, can we all agree that losing -8500 is not a great day. And then can we all agree that we are not going to agree as to whether accumulating a large amount of +EV while losing that 8500 makes it a good thing or somehow offsets the loss.

Then can we put this to rest.

Putting it all together, "accumulating EV stories" sounds pretty darn close to "bad beat" stories in poker.

"I SHOULD have won X...I was favored to win X number of times...etc. etc."

All we can really do as gamblers is try to look for and put ourselves in as many +EV situations as possible and hope the "variance" or "luck" evens out. In our favor hopefully if the situations are indeed +EV!

That, or we can just make up stories about 'giving luck more opportunities to appear' and putting bad beats on the casinos instead for 10+ years on -EV machines to the tune of $1 million (or $984,000 or $900,000 or $750,000 depending on which post you're reading)

[redietz]

I mentioned this previously, but in sports I don't take estimates of "shoulda wons" and "shoulda losts" too seriously. Basically, in college football, my take is that the team that "should" win does so low-70-some percent of the time, so having the right side gives you as much chance of winning, roughly, as a premium favored poker hand. But it's semi-subjective, even though it relies on formulas, so I don't give it too much heft. I do take myself to task if I win a bunch of games one week by "getting lucky," because that means I was wrong in what I thought would happen, and I did not know what I was doing that week. That'll get you clobbered long term.

Sports is different, in that value accrues when you lose but were "correct," and gets exhausted when you win. I'd rather be right for the first 10 weeks of the college football season, and I'd rather be lucky the last three, because there is no ongoing benefit to being right but losing the final three weeks. Next season presents you with entirely different squadrons, so "losing but being right" the last three weeks of college football does one no good.

[kewlJ]

A2A3, I saw this thread when I was out today, but didn't have time to reply and then when I got home, got sidetracked with other discussions, so sorry for the late response.

I am not surprised there was little reply or interest in the topic of EV. The reason being that everyone understands what EV is and how it works, EVEN THE TROLLS pretending not to. They are just doing their thing of hating and trying to discredit. THAT is what this site is and that is precisely what Alan is and does.

[mickeycrimm]

When you have an edge you want to get money in on it because "net edge times volume equals the earn." It's the formula I use and the formula used by the casino. You aren't going to make any money if you don't collect positive EV. If you own a roulette wheel would you rather see just one player there or ten players there. The more players making bets the more EV you collect, hence the more money you make. Are you going to have some bad days? Yes, but so what? It could be that on your best day of collecting EV you didn't win much on the wheel or you actually lost money....but you still want to have those high volume days. You still want to keep collecting as much positive EV as you can.

It is not a requirement that negative expectation gamblers like Alan understand what collecting positive EV is all about for it to work.

[Alan Mendelson]

It is always good to play games where your bet has the best expected value. It's ideal to make a bet when your expected value of that bet is positive.

But expected value is only a way to rate a bet. EV is not a medium of exchange. EV can't be used to pay your bills.

To say that you lost real money but had a great bet makes for a wonderful tag line on an online signature. And that's all it is. Only real winnings count.

Those who point to the formula as it relates to casinos overlook that casinos have hundreds of games with hundreds of players but very few games if any that offer a positive EV to the players. This is why the formula works for the casinos.

If you really have an edge on your bet the formula should work for you too.

With that said, I like your analogy about the loss being a bad beat. You still lost. You can try again but you still lost.

Having an edge doesn't automatically make you a winner.
Even casinos lose sometimes. But what keeps the casinos open is the small number of winners.

[mickeycrimm]

Those who point to the formula as it relates to casinos overlook that casinos have hundreds of games with hundreds of players but very few games if any that offer a positive EV to the players. This is why the formula works for the casinos.

You've probably never been in a six machine casino in Oregon. There are hundreds of them. The owners of these small businesses do not have hundreds of machines. JUST SIX MACHINES. You can usually find these stand alone businesses in strip malls. Whatever the machines make for the month the owner has to turn 80% of it over to the state. Out of the 20% left the owner pays rent, utilities, insurance, labor and any other costs to do business. Whatever is left is his profit.

[AxelWolf]

It is always good to play games where your bet has the best expected value. It's ideal to make a bet when your expected value of that bet is positive.

But expected value is only a way to rate a bet. EV is not a medium of exchange. EV can't be used to pay your bills.

To say that you lost real money but had a great bet makes for a wonderful tag line on an online signature. And that's all it is. Only real winnings count.

Those who point to the formula as it relates to casinos overlook that casinos have hundreds of games with hundreds of players but very few games if any that offer a positive EV to the players. This is why the formula works for the casinos.

If you really have an edge on your bet the formula should work for you too.

With that said, I like your analogy about the loss being a bad beat. You still lost. You can try again but you still lost.

Having an edge doesn't automatically make you a winner.
Even casinos lose sometimes. But what keeps the casinos open is the small number of winners.

Alan, put a coin in your hand. Charge me $8500 to pick what hand the coin is in. If I guess wrong I owe you $8500.. If I guess right I get $42500.

Allow me to keep playing until i want to quit.

I bet I can get a loan on that bet and float all my bills, even if I lost $8500 multiple Times already in one day. And I could say I had my best day ever even though I lost because I know dang well I will crush you soon enough and it will average out soon enough.

[a2a3dseddie]

You still want to keep collecting as much positive EV as you can.
It is not a requirement that negative expectation gamblers like Alan understand what collecting positive EV is all about for it to work.

EV is not a medium of exchange.

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Sticking with poker analogies since that's what I know (sort of ) Let's say you have pocket Aces, your heads-up opponent has pocket Kings and you're both all in before the flop. There's $100 in the pot.

You are a 4 to 1 favorite in this spot. Your EV is +$80.

BUT your opponent hits a King on the river and you lose.

If we play the same hand again isn't my EV still +$80 in a $100 pot? It doesn't become +$160?

I realize that playing this same hand and pot 100,000 times SHOULD result in me winning close to 80,000 times and that's where mickey's formula "net edge times volume equals the earn." comes in to play.

But I don't grasp this "collecting EV" concept. To me my EV each time this particular hand and pot is played will be +$80.

[kewlJ]

You still want to keep collecting as much positive EV as you can.
It is not a requirement that negative expectation gamblers like Alan understand what collecting positive EV is all about for it to work.

EV is not a medium of exchange.

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Ok, well I can't do a poker analogy because I don't play poker. But here is a simple analogy that I can do.

New roulette wheel. 10 spots. 6 red, 4 black, all with the same 10% chance of the ball landing on them. Even money payout.

Should you choose to bet red, every spin you make will be at significant +EV.
Should you choose to bet black every spin at significant -EV.

So day 1 you play for 100 spins betting red. To your dismay 54 blacks came up and you lost for the day (short term result, equivalent to my $8800 short term one day loss). You lost despite playing at +EV.

So you do the same thing every day for a year. That is a total of 36,500 spins. (this represents long term results) At 36,500 spins all at +EV you will NOT be behind. It is NOT chance. IT is mathematics. That is accumulated +EV and the mathematics (Law of Large Numbers) guarantees you will be ahead and that you will actually be very close to total +EV for those 36,500. With such a large trial or sample size what you win will be very close to expectation. Guaranteed! Mathematical Guarantee.

So back to that first day. You lost (as I did the day mentioned), but you earned +EV for the day which is part of that larger amount of EV for the 365 days that guarantees within reason what your results will be. So yeah, that +EV carries forward. It is part of the larger sample size that guarantees what results will be.

[Alan Mendelson]

EV is not a medium of exchange.

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Ok, well I can't do a poker analogy because I don't play poker. But here is a simple analogy that I can do.

New roulette wheel. 10 spots. 6 red, 4 black, all with the same 10% chance of the ball landing on them. Even money payout.

Should you choose to bet red, every spin you make will be at significant +EV.
Should you choose to bet black every spin at significant -EV.

So day 1 you play for 100 spins betting red. To your dismay 54 blacks came up and you lost for the day (short term result, equivalent to my $8800 short term one day loss). You lost despite playing at +EV.

So you do the same thing every day for a year. That is a total of 36,500 spins. (this represents long term results) At 36,500 spins all at +EV you will NOT be behind. It is NOT chance. IT is mathematics. That is accumulated +EV and the mathematics (Law of Large Numbers) guarantees you will be ahead and that you will actually be very close to total +EV for those 36,500. With such a large trial or sample size what you win will be very close to expectation. Guaranteed! Mathematical Guarantee.

So back to that first day. You lost (as I did the day mentioned), but you earned +EV for the day which is part of that larger amount of EV for the 365 days that guarantees within reason what your results will be. So yeah, that +EV carries forward. It is part of the larger sample size that guarantees what results will be.

We all understand this roulette wheel example you gave, but this isn't a real situation. There aren't roulette games with wheels with only ten spots of which six spots are red.

We also understand that it is to your advantage to play games with the best "expected value" for your bet. In fact, WE ALL AGREE ON THIS.

Where we run into a problem -- and a point of debate -- is what happens when you believe you have a positive expected value for your bet but you lose. Accidents and shit happens. Then the question becomes how do you win back what you lost? Do you say "I'll catch up and recoup my losses later because I have an edge at this game." It appears this is what you are saying.

How do you recoup your losses? Do you do what Rob Singer does and increase your bets? Or do you think you are due for a run of good luck that will offset the run of bad luck you just had?

Now, regarding your claim about Rob Singer. Total bullshit. Why do you make these things up? First of all, Rob is not playing any games comparable to your make-believe roulette wheel. He's playing video poker with a house edge that is probably less than one percent. Frankly, how much "good luck" do you need to overcome a house edge of less than one percent? I'm going to say "not much." And if he is getting what the "expected return" says he should be getting he's losing less than one percent.

If you want to discuss this stuff, keep it on a level playing field. Talk facts. Don't make up conditions.

[kewlJ]

We all understand this roulette wheel example you gave, but this isn't a real situation. There aren't roulette games with wheels with only ten spots of which six spots are red.

The remainder of your post proves that you DO NOT understand the roulette wheel example.

And you stating that this isn't a real situation and there are no roulette games with only 10 spots, makes it clear that you don't even understand the definition of an analogy.

[mickeycrimm]

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Ok, well I can't do a poker analogy because I don't play poker. But here is a simple analogy that I can do.

New roulette wheel. 10 spots. 6 red, 4 black, all with the same 10% chance of the ball landing on them. Even money payout.

Should you choose to bet red, every spin you make will be at significant +EV.
Should you choose to bet black every spin at significant -EV.

So day 1 you play for 100 spins betting red. To your dismay 54 blacks came up and you lost for the day (short term result, equivalent to my $8800 short term one day loss). You lost despite playing at +EV.

So you do the same thing every day for a year. That is a total of 36,500 spins. (this represents long term results) At 36,500 spins all at +EV you will NOT be behind. It is NOT chance. IT is mathematics. That is accumulated +EV and the mathematics (Law of Large Numbers) guarantees you will be ahead and that you will actually be very close to total +EV for those 36,500. With such a large trial or sample size what you win will be very close to expectation. Guaranteed! Mathematical Guarantee.

So back to that first day. You lost (as I did the day mentioned), but you earned +EV for the day which is part of that larger amount of EV for the 365 days that guarantees within reason what your results will be. So yeah, that +EV carries forward. It is part of the larger sample size that guarantees what results will be.

We all understand this roulette wheel example you gave, but this isn't a real situation. There aren't roulette games with wheels with only ten spots of which six spots are red.

We also understand that it is to your advantage to play games with the best "expected value" for your bet. In fact, WE ALL AGREE ON THIS.

Where we run into a problem -- and a point of debate -- is what happens when you believe you have a positive expected value for your bet but you lose. Accidents and shit happens. Then the question becomes how do you win back what you lost? Do you say "I'll catch up and recoup my losses later because I have an edge at this game." It appears this is what you are saying.

How do you recoup your losses? Do you do what Rob Singer does and increase your bets? Or do you think you are due for a run of good luck that will offset the run of bad luck you just had?

Now, regarding your claim about Rob Singer. Total bullshit. Why do you make these things up? First of all, Rob is not playing any games comparable to your make-believe roulette wheel. He's playing video poker with a house edge that is probably less than one percent. Frankly, how much "good luck" do you need to overcome a house edge of less than one percent? I'm going to say "not much." And if he is getting what the "expected return" says he should be getting he's losing less than one percent.

If you want to discuss this stuff, keep it on a level playing field. Talk facts. Don't make up conditions.

You're an idiot. Using a game like roulette as an example is to simplify things. But you are such a dunce you don't get it.

[mickeycrimm]

You still want to keep collecting as much positive EV as you can.
It is not a requirement that negative expectation gamblers like Alan understand what collecting positive EV is all about for it to work.

EV is not a medium of exchange.

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Sticking with poker analogies since that's what I know (sort of ) Let's say you have pocket Aces, your heads-up opponent has pocket Kings and you're both all in before the flop. There's $100 in the pot.

You are a 4 to 1 favorite in this spot. Your EV is +$80.

BUT your opponent hits a King on the river and you lose.

If we play the same hand again isn't my EV still +$80 in a $100 pot? It doesn't become +$160?

I realize that playing this same hand and pot 100,000 times SHOULD result in me winning close to 80,000 times and that's where mickey's formula "net edge times volume equals the earn." comes in to play.

But I don't grasp this "collecting EV" concept. To me my EV each time this particular hand and pot is played will be +$80.

Accumulated EV doesn't "carry over." That's just b. s. started by Mendelson.

[Deech]

EV is not a medium of exchange.

'Collecting positive EV' is just too abstract a concept for me to grasp.

How can it "carry over" from 1 play to the next or "accumulate" in any way?

Sticking with poker analogies since that's what I know (sort of ) Let's say you have pocket Aces, your heads-up opponent has pocket Kings and you're both all in before the flop. There's $100 in the pot.

You are a 4 to 1 favorite in this spot. Your EV is +$80.

BUT your opponent hits a King on the river and you lose.

If we play the same hand again isn't my EV still +$80 in a $100 pot? It doesn't become +$160?

I realize that playing this same hand and pot 100,000 times SHOULD result in me winning close to 80,000 times and that's where mickey's formula "net edge times volume equals the earn." comes in to play.

But I don't grasp this "collecting EV" concept. To me my EV each time this particular hand and pot is played will be +$80.

Accumulated EV doesn't "carry over." That's just b. s. started by Mendelson.

OK. Time out. Time to referee (not that I am sanctioned by anyone) . We all agree that the phrase "Accumulated EV" is a target point. There are many individuals that have difficulty accepting something of no value. Likewise, while not stated, losing one session does not guarantee a winning session in the future. But a large sample size of a game in question that has mathematical proven results will give you an advantage in the long run.

I am not a big player in either venue but I play both VP and BJ. Outside of casino multipliers, the only time a player has an advantage in either game is when you count cards in BJ.

We have to get off the concept of storing imaginary points. If I knew and had a track record that I played a certain game that had a yearly positive result, I would document losing sessions with the hope that the session proved beneficial at the end of the year. That is based on total play at an advantage.

[jbjb]

Don't help these fools.

Stupid is, as stupid does.

[redietz]

No, what keeps the casinos open is +EV and/or the misinformed and/or addicts. Not sure which contributes more.

Mickeycrimm gave a really clean explanation. He did it in one concise paragraph. I salute him.

[Alan Mendelson]

No, what keeps the casinos open is +EV and/or the misinformed and/or addicts. Not sure which contributes more.

Mickeycrimm gave a really clean explanation. He did it in one concise paragraph. I salute him.

That's right. The CASINOS have +EV. But how many players have +EV?

But I'm not sure that's the answer being requested here.

[kewlJ]

That's right. The CASINOS have +EV. But how many players have +EV?

Players? Like you? Not many have +EV. Or when playing a game like blackjack in which players periodically do have +EV, the player (like you) won't know it, so he won't take advantage of it. The casinos bank on that. That is why they love you and give you so much trinket stuff.....like allowing a wedding at the craps table.

[kewlJ]

Now we can use this same example to debunk Mr. Singer.

Mr. Singer is claiming that after after a year of betting black on our 4 black /6 red roulette wheel that he is ahead, which is mathematically impossible. But not only is he ahead, but he is ahead to the tune of 900+ thousand dollars. Give me a break. YOU CANNOT WIN LONG-TERM Playing negative EV game. Impossible! (Law of Large Numbers).

So Mr Singer is claiming these voodoo ideas, he does this or that (progression) and the EV magically changes from negative to positive. Impossible. Every spin he makes on black will STILL be -EV and his longterm results will be a loss.

That would be like the guy playing our 6 red / 4 black roulette wheel saying he only bets when 4 reds have come out, that way "Black is due" so he bets. Well it doesn't work that way. EVERY bet on BLACK is -EV, regardless of what voodoo things Mr Singer tries as claims.

Mr. Singer saying he plays -EV games and wins long-term is no different than me claiming to have jumped over the moon, or Alan claiming to have seen 18 y.o.'s in a row. Impossible is impossible! And all the misdirects and personal attacks and name calling won't change that.

[MisterV]

The success of casinos would seem to illustrate the power of EV, as the games they offer all offer them positive EV.

The odds favor the house, and in the long run they win.

An AP figures an angle to shift the odds somewhat in his favor, and with it the EV, anticipating that now he will win in the long run.

In the short run variance dictates there will be swings, but in the end the one with positive EV should prevail.

At least that's how I look at it.