I’m conscious that my initial blog-entries have contained more anecdotes and philosophy than poker. While I hope to strike a nice balance overall, I think the next few will be about poker strategy as there are some basic topics I want to work through. Firstly, I want to make it clear that, for a poker player, I am pretty risk-averse; I have a tight-pants attitude toward bankroll management and I almost never play over my head. I grind the 45 man SNGs, not only because they are super-soft but because I value constant income over ‘the big score’. I am in the process of making an adjustment to my balance of SNGs vs MTTs but only as my overall net worth permits.
I would extend this risk-aversion to my playing style as well but don’t for a moment misinterpret this for me saying I will let my stack blind off while waiting for a big hand. It doesn’t. For me, it would be risk-averse to allow my stack to dwindle by staying inactive. This idea is analogous to an inexperienced investor opting for a guaranteed 100% return after a 5 year period by putting 90% of their portfolio into government bonds, thus ignoring the time-value of their cash. The point I am trying to make is that we are always gambling. We are always making active ‘betting’ decisions – even a passive decision to put your money under your mattress can and should be viewed as an active decision to wager against inflation.
So, in a poker tournament, I will always try to do what I have to in the name of an optimal (long-term profitable) strategy. The increasing blinds and antes are the poker tournament’s ‘inflation’. It is therefore optimal to keep yourself active in pots where possible (and prudent) because if your stack remains the same for an entire level, it has actually become devalued.
The bottom-line is hourly rate but it is not the only consideration. I want to play in the games where I can make the most amount of money per hour but I also want to prevent long dry spells as a period of bad variance can shake my confidence and make me develop a less profitable game. I know all to well how psychologically tough it is to deal with downswings so I think it is acceptable bankroll strategy to give up a small amount of equity in exchange for a more consistent income. My flatmate Dave, (yes, there are a lot of Dave’s in my world) who is a markets analyst, asked me the other day if I would prefer to flip a coin for $2K or have $900 guaranteed. I told him I would flip the coin for $2K but if you were to make that figure $20K, I would take the $9K. Hopefully, there will come a point in the not-too-distant future when I will flip for $20K but there will always be a figure for which I would take the guaranteed 90%. The simple reason for this is that I am not a gambler. I am a poker player and as a poker player, I take measured risks and gambles for small percentages of my net worth and only when conditions seem right to do so. It is exactly like why I will refuse a definite coin-flip in the early levels of a tournament – If a large portion of or my entire net worth is on the line, I sure as hell better be good enough to find a better spot.