Fortunately, a table change landed me at more fun table. And when the $2-$5 game started, I engaged in fun conversation about two of my favorite topics (Ron Harris and Michael Larson), I got a (probably unneeded) ego boost by successfully serving as a translator to two Chinese players in the game (who spoke no English), and one of our dealers was wearing a Ron Paul 2012 bracelet! I guess good things come to those who wait. Speaking of which…

Without a doubt, the highlight of last Friday’s session came from the fun $1-$2 table. Some hyper-aggressive player opened to something like $22 from early position. Action folded to a player in middle position. This player was PLOWED. Fortunately, he was an extremely quiet and friendly drunk. Unfortunately, it took him a LOONNNGGGG time to act. Preflop, he counted his chips for about a minute before calling. Everybody else folded. I don’t recall the flop (which is really sad given that it was out for several minutes), but the initial raiser checked to the drunk. The drunk then sat there counting his chips. 1 minute. 2 minutes. 3 minutes.

I guess someone could have called a clock, but we were trying to be somewhat accommodating and friendly. The initial preflop raiser, instead of waiting for the drunk to act, forcibly threw his hand into the muck!

I’m sitting here, almost exactly a week after this hand happened, and I’m still getting a good laugh whenever I think about this hand! As a result of this, I’ve decided to name a new play: the stall bluff. To execute the stall bluff, simply wait so long that your impatient opponents decide to fold instead of waiting for you to act.

Disclaimer: executing the stall bluff will decrease your popularity. But if no one likes you, then I guess you have nothing to lose

May Your EV Always be Positive!

Tony Guerrera

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Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

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So-called responsible adults warn kids about peer pressure – and for good reasons. Sure, a generation of meth-heads and Oxycontin addicts can probably do a better job of running the US than the idiots currently in office. But being more competent than sheer incompetence doesn’t ensure competence. A generation of meth-heads and Oxycontin addicts is not a good thing.

Unfortunately, the adults who serve as great role models in some respects fail miserably as role models in other respects. In particularly, the typical US adult is likely to be a horrible role model when it comes to managing money – at least in my opinion which, I admit, is not backed by any solid data. And if an opportunity exists to mess up financially, the holiday season certainly qualifies.

Seduced by sales and the notion of looking like a hero during the holidays, people make stupid decisions. They use money they don’t have to buy stuff that nobody needs. Sometimes, they use money they don’t have to buy stuff that nobody wants! Don’t buy an XBox 360 if you need a payday loan for the cash. Don’t put a PS3 on your credit card unless you already have the cash on hand to pay the balance in full.

No ordinary investment vehicle exists that can earn you more money than the interest you’re stuck paying on consumer debt. Be disciplined, and avoid consumer debt at all costs. Though don’t feel too badly if you’ve trapped yourself. Like many a talented poker player, I’ve made my share of sub-optimal financial decisions off the felt. Fortunately, I’ve rebounded with vengeance.

Are you managing your money the best way that you can? Suppose you have no consumer debt, and you have an emergency fund in the neighborhood of $25,000-$50,000. What are you doing with the rest of your money? If you’re simply spending it all, you’re putting yourself in a tough situation later in life – which is inexcusable since a way exists for math to work in your favor.

Suppose that you opt not to splurge on one needless extravagance during the holidays. Actually, that’s too easy. Instead, suppose you opt not to buy $25 gifts for 10 people – such as friends and distant relatives.  You park the $250 you didn’t spend in an investment where you earn 10% annually. 25 years from now, that $250 will be $250(1.10^25) = $2708.68! Even after accounting for inflation (which, historically, has been on the order of  3.5% per year), you’ll be well ahead of the game.

When money invested earns interest, and the interest you earn also earns interest, then you’re taking advantage of what’s known as compound interest. Leveraging compound interest possibly entails giving up some short-term pleasure. However, foregoing immediate gratification can make life much less stressful over the long-term (and therefore much better – at least in my opinion).

Of course, theory isn’t much good if it can’t be put into practice. Knowing how much money you’d have on an investment with a 10% annual return is one thing – finding an investment with a 10% annual return is another thing. For example, the historical annualized growth rate of the S&P 500 is around 10%. However, past performance is no guarantee of future performance. In fact, once the human population reaches its asymptotic limit (based on how much life Earth can support), then it’s possible that the S&P 500 will grow much more slowly – or not at all. At that point, investing in growth might no longer be a path to riches. But until human civilization reaches that point, investing in growth and capitalizing on compound interest remains a seemingly attractive option.

I definitely can’t claim to be an expert investment advisor. However, chances seem pretty damn good that parking your $250 in a broad index fund (whether it be mutual fund or an exchange traded fund) is a much better long-term use of your money than random gifts for 10 people. Just be sure that the fund has low management fees. Rake sucks in poker. Rake also sucks in investments.

Going beyond parking just $250, if you’re employed by a company offering a 401k with matching, are you taking full advantage of the tax-deferred investment opportunity (assuming your 401k plan gives you access to some broadly invested funds)? If you’re not employed by a company offering a 401k, are you being disciplined and investing a little bit of every dollar that comes your way? If not, then there’s no better time like the present to get started – because the earlier you start, the more time there is for compound interest to do the work.

May Your EV Always Be Positive!

Tony Guerrera

—–

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Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

Game 1: Hourly $EV = $50. Players are unpleasant and are constantly bickering.

Game 2: Hourly $EV = $35. Players are quiet and somewhat serious about their poker playing, but they are friendly and good sports.

Game 3: Hourly $EV = $30. Players on the other side of the table are a bit unpleasant. However, players seated near you are friendly and extremely interesting conversations.

Which of these games would you prefer? Since my start in poker back in 2002, my preference has been Game 1 (unless the bickering could possibly escalate into something where my personal safety would be at risk). As Sean Combs said back when he was Puff Daddy, I’ve been “all about the Benjamins.”

Over the past few months, my game preference has changed, and it’s now either Game 2 or Game 3. Actually, I don’t think my preference has changed. Instead, I think that I’m now simply willing to be honest to myself about my preference.

Whether it’s poker playing, business, or personal finances, it’s easy to be seduced into thinking that the goal is mere maximization of $EV. After all, money buys everything from fancy electronics to the time of others. However, other considerations exist. It’s important to realize that utility is more than simply $EV.

You’re sitting in an exceptionally soft game, but it’s late, and your son has a basketball game early in the morning. You own a factory, and even though reducing pollution costs more, maximizing profits means living in an unhealthy environment. The power of compound interest is extraordinary, but if you only spend money on food, housing, clothing, and utilities (putting the rest of your money in interest accruing investments), what’s the point if you’re not devoting at least a small percentage of your money towards items and experiences that can enhance the quality of your life?

Living to maximize utility doesn’t mean that you can always do what you like. Sometimes, we have to do things we don’t like. Whether it’s for survival or paying a short-term loss for a long-term gain, a fact of life is that we can’t devote all our time to things we’re happy doing. Maybe you don’t enjoy reading; however, if you read my blog, maybe you’ll have better results at the poker tables. And in fact, maybe your awareness of the long-term benefit of reading my blog will lead to you enjoy reading it. (I was originally thinking of using a colonoscopy example, but my current knowledge of colonoscopies – which is incomplete –  suggests that negatives, such as complications arising from colon punctures, could outweigh the benefit of detecting colon cancer early.)

Living to maximize utility also doesn’t mean that you’re entitled to make money at something simply because you want to. For example, if the whole world played poker perfectly, then you wouldn’t be able to make money playing poker. I wouldn’t enjoy shoveling manure; however, if I had no other way of producing food or money, I’d happily do it.

Regardless of whether it’s poker, business, personal finances, or anything else, recognize that $EV is only part of a bigger consideration – utility. Form your utility preferences well, and be honest with yourself about your utility preferences. Combine this with a willingness to embrace unpleasant things when necessary, and you’re in a position to win at life.

May Your EV Always be Positive!

Tony Guerrera

P.S. Sorry I let so much time slip between this and my last blog post. Over the past two months, my non-WMS time has been primarily devoted to my lovely wife, reading, and playing bullet hell shooters made by Cave.

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Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

(I’ve watched a bunch of old episodes of Columbo over the past few days. That, combined with my old school rap reference here, really makes me feel like I was born a few years too late – lol)

My main uses for Facebook and Twitter seem to be (in no particular order):

1.) Self-promotion

2.) Engaging in debates

3.) Posting an occasional (or more than occasional) jackassy comment

4.) Referencing something I like (article, video game, music, movie, whatever) so that others who stumble upon my comment may discover something awesome

Regarding #4, I think I might repeat some recommendations from time to time. Hopefully, it’s a sign of me really enjoying something when I enjoy it rather than a sign of early Alzheimer’s. Regarding #3, my Kurtis Blow jackassy comment deserves to be elevated to a full blog post. Here it is:

Not much remains to be said about bad beats in poker. Investing emotional capital in results outside one’s control is illogical. ‘Nuff said – I’m not going to waste hundreds of words flogging that dead horse. However, as one who likes to theorize and generalize, I think it’s important to understand bad beat psychology (and the converse, which I creatively call reverse bad beat psychology).

• Bad beat psychology = responding to bad outcomes
• Reverse bad beat psychology = responding to good outcomes

Fundamentally, bad beat and good beat psychology focus on outcomes (something we can’t always control – even when we think we’re in control) rather than process (something we can always control – at least, hopefully, to some extent). Overcoming bad beat psychology and reverse bad beat psychology is an important part of personal maturation. Furthermore, understanding bad beat psychology and reverse bad beat psychology can help you interact more effectively with others (since effective communication entails knowing what level your target audience is operating on).

One view of life is that we’re in a constant struggle against entropy. Somehow, we’ve been wired to devote energy towards preserving structure and order. No doubt, some of us are better at this than others. But regardless of how skilled you are at circumventing entropy, you’re always going to be a slave to events outside your control.

Maybe I should have used a less negative word than “slave.” Events outside our control aren’t inherently good or bad – they can be either. Unfortunately, the bad events outside our control can be anywhere from annoying (e.g. losing a $1,000 pot when you’re a 70% favorite when the money goes in the middle) to extinction-level (e.g. giant meteor strikes Earth).

The most primitive instances of bad beat and reverse bad beat psychology stem from prioritizing outcomes over process. In all aspects of life, we (hopefully) engage in processes that seek to achieve positive outcomes. As a result, it’s tempting to use outcomes as a proxy for measuring the effectiveness of processes. Unfortunately, statistics to determine causal relationships between processes and outcomes can be difficult or impossible to obtain. In the short-term, the best process can result in good or bad outcomes. In the short-term, the worst process can also result in good or bad outcomes.

When we can’t obtain reasonable sample sizes, we can’t care about outcomes (even though we’re always trying to maximize our chances of achieving them). However, this statement can be taken too far. For example, getting the wrong answer to a math problem IS NOT OKAY as long as you used the correct general process. That kind of bullshit is just one example of why education in the US currently sucks. To make sure that I don’t contribute to the United States’ decent into the abyss of mediocrity, I’m going to change the wording of this paragraph’s opening sentence: because causal relationships between processes and outcomes are difficult to establish, we have to be really cautious when it comes to attaching importance to outcomes.

Having decoupled processes from outcomes, we now can link bad beat and reverse bad beat psychology to an essential part of our existences. If you’ve achieved the poker zen that I allude to in my Killer Poker Analysis segment on thinking in terms of strategy vs. strategy, you should have a healthy view regarding process vs. outcomes when you play poker. However, does this healthy view permeate into all other aspects of your life?

Fundamentally, winning at life is about managing one’s risk when it comes to events outside one’s control. Because we all have different preferences, we all manage our risks differently when it comes to:

• Choosing which events outside our control we potentially expose ourselves to
• Having contingency plans in place for when things outside our control happen

If you were an online poker player in the US when Black Friday happened, what percentage of your income was derived from online poker playing? Did you have any other skills in the event of government intervention or tougher game conditions? If you’re deciding to move abroad to continue playing for most/all your income, do you have any other skills in the event that games become less beatable over time?

(As an aside, note that I think moving abroad is a smart move for some – but not all – who were deriving even large chunks of income from online poker in the US prior to Black Friday. Basically, the decision is a function of your options, your life circumstances, and personal preferences. For me, moving abroad made no sense. I love thinking about poker and I like playing poker, but I don’t have the drive to grind long hours. I prefer online poker to live poker, but live poker does have the benefit of getting me away from my computer. Meanwhile, I love Vegas and live in a home that’s completely paid for – monthly HOA dues excepted, but they don’t kill you on those in Vegas like they do in So Cal. I have virtually no living expenses. And given skills that I’ve honed over the years, I was able to luckbox my way into finding a well-paying position with a company that allows me to do enjoyable work, interact with awesome people, and further hone my analytic and programming skills.)

Meanwhile, forgetting about online poker playing specifically, keep in mind that nothing in life is guaranteed. All we do is surf probability waves. Governments that are supposedly for the people turn into governments that act at the behest of special interest. Businesses that are now booming can disappear overnight. Regardless of how you make most of your money right now, do you devote any time to expanding your knowledge and skills? Success in a dynamically changing world requires an ability and willingness to prepare and adapt. At the most fundamental and important level, survival requires the same ability and willingness to prepare and adapt.

Bad breaks happen. However, most are surmountable.  Regardless of where you currently are in life, do yourself a favor. Vigilantly prepare when it comes to preparing for events that are outside your control. Read textbooks. Learn new skills. Be a student forever – both in and out of your area(s) of present expertise (you want to be a “Jack of all trades and a master of some,” not a “Jack of all trades and master of none”). Sure, doing all this doesn’t guarantee anything in the face of adversity. But doing the best that we can is better than doing nothing at all and bemoaning the random misfortunes that come our way.

For inspiration, here’s a current short-list of stuff on my to-do list. I guess it helps that I simply enjoy learning. But even when life is as close to perfect as possible, you still have to be prepared:

• Finish work on my fourth book, Tournament Endgame Strategy (with Matthew Hilger)
• Read some of the latest poker literature (like The Raiser’s Edge, which has at least some content related to what’s being covered in Tournament Endgame Strategy)
• Start becoming fluent in Mandarin (I got some great books last time I was in Taipei)
• Further improve my ability to program in C
• Learn C++ and C#
• Go coast-to-coast through all 4 volumes of Knuth’s The Art of Computer Programming
• Begin picking through math textbooks – my bookshelves are filled with books (some that need reviewing; some that need initial reads)

May Your EV Always be Positive!

Tony Guerrera

—–

Feel free to repost this as long as you include the following author box (including hyperlinks):

Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

1.) Possible merits of buying into no-limit hold’em cash games with stacks shorter than 100bbs

2.) Suited connectors in no-limit hold’em

3.) cEV Mode: What it means to be in chip accumulation mode in tournaments

Left-click to listen now or right-click to save for future listening.

Work has been awesome so far, though it seems that I’ve contracted some sort of annoying sinus infection. My sleep habits have been surprisingly good, but I definitely didn’t do a great job of consuming enough fruit smoothies and nutritionally balanced meals. I’m in Chicago this week on business, and since I forgot to pack my Sudafed, I just spent a bunch of time tonight wandering the streets of downtown Chicago looking for a nasal decongestant containing pseudoephedrine HCl. It’s too bad that it’s a chemical precursor to methamphetamine (aka crystal meth). In my experience, pseudoephedrine has proven to be a much better nasal decongestant than phenylephrine.

The first Walgreens I went to was out of stock. No Sudafed. No Walgreen’s generic. Nothing. As a result, my quest was much more epic than I thought it would be. Thanks to my HTC Thunderbolt for making the journey somewhat manageable (and for the 4G LTE tethering that I’m using as I write this life update).

I return to Vegas this Friday, and I’ll be distributing the August KillerEV Hand of the Month this weekend. Additionally, episodes of Killer Poker Analysis will resume in September. After doing a lot of flip-flopping, I’ve decided on recording episodes of Killer Poker Analysis to be distributed around the 1st and 15th of each month.  Meanwhile, I’m also looking forward to, once again, blogging about decision-optimization and other interesting topics pertaining to life on and off the felt. And finally, I’m now writing occasional articles for Poker Player Newspaper, and I’m striving to be better about making videos for Pocket Fives Training. I don’t have time to do videos on a frequent/regular basis, but I would like to get videos out slightly more frequently than once every few months.

I hope life is treating you all well. And as always, your feedback is welcomed and encouraged. Contact me if there’s anything (poker-related or not) that you’d like my thoughts on.

May Your EV Always be Positive!

Tony Guerrera

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Feel free to repost this as long as you include the following author box (including hyperlinks):

Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

1.) The impact that rake can have on game selection and in-game strategy

2.) Clumping

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As the project’s name wonderfully implies, PokerNearMe finds poker near you. Currently, PokerNearMe exists as an iOS app and a website. Currently, the iOS app is the most functional and polished part of the project.

I’m not giving up my HTC Thunderbolt any time soon, and I’m not in the habit of carrying my iPod Touch around. However, the iOS app is extremely well-executed. If a PokerNearMe Android app existed, it would be on my phone.

On GPS-enabled iOS devices, PokerNearMe is capable of snagging your location, providing a detailed listing of poker rooms within your desired search radius, and providing directions to your room of choice (note that their coverage is currently limited to poker rooms in the United States and Canada). Without a GPS-enabled device, you can select a location and find out pretty much everything you need to know regarding poker possibilities at your destination if you have internet access. And since PokerNearMe stores some information locally to your device, it’s even useful if you’re without internet. Without internet access, you won’t get details like whether you can watch TV while playing (yes, their poker room data is really that detailed); however, you’ll have basic information at your disposal – such as room contact information and games offered.

If you’re in an area with lots of poker rooms (like Las Vegas or So. Cal), the amount of data to pour through is staggering. Fortunately, the mobile app allows you to set filters to search for cash games or tournaments of interest. If you’re looking to play $500+ buy-in tournaments during your next trip to Vegas, PokerNearMe will find your target tournaments with ease. If you’re looking for a $4-$8 H.O.R.S.E. game in So. Cal, PokerNearMe will also have you covered. Whatever your game/tournament of interest is, PokerNearMe will help you with either finding it or determining that it’s not available anywhere within your search radius.

If you’re a poker player with an iPhone or iPad, you owe it to yourself to download PokerNearMe. Even if you have an iPod Touch, PokerNearMe is powerful enough without GPS and provides a decent amount of information even if you’re without internet access. Meanwhile, if you’re sans-Apple, the PokerNearMe website currently features a listing of poker rooms by state. The website doesn’t currently feature the search functionality that’s present in the iOS app. However, detailed information exists on (I think) every poker room in the US.

I’m hoping that my friends are able to bring the PokerNearMe website to the same level as the iOS app. I also hope that my friends make an Android app available. However, while working on those improvements, I selfishly hope that my friends will still have time for evenings filled with 80s TV/movies, Dominion, and DeathSmiles (where we currently hold the #1 score on the XBox 360 coop leaderboard).

May Your EV Always be Positive!

Tony Guerrera

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Feel free to repost this as long as you include the following author box (including hyperlinks):

Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.

Blinds were T50-T100 without an ante. I had about T5,000-T5,500 at the start of the hand, and I was playing purely with respect to cEV. I had been relatively active at the table, but after about 2.5-3 hours of play, I had only been involved in one hand that went to showdown. I was CO with 88, and I opened to T225. B and BB called, making the pot T700 going to the flop. The flop was J52 rainbow. BB checked. Though a T375 bet would have been okay, I also checked. B bet about T400. BB folded, and I called. At this point, I put B on something like {KJ+, QJs, JTs, TT-22, Positional Bluff}.

The pot was about T1500 going to the turn. The turn was a Q which was the same suit as the 2 on the flop. I led around T800. B looked a bit puzzled and hesitated a bit before calling. During his hesitation, there was no indication that he was thinking of raising (i.e. I had no real indication of whether he’s very strong). At this point, I thought my opponent’s range was constrained to something like {KQ+, KJ+, QJs, 55, 22}. Therefore, my opponent’s range, broken down with respect to hand combinations, looked something like:

AQ: 12 combos

KQ: 12 combos

AJ: 12 combos

KJ: 12 combos

QJs: 2 combos

55: 1 combo

22: 3 combos

Total: 54 combos

The pot was about T3,100 going to the river, which was a 5. The 5 was the same suit as the Q and 2 – making a backdoor flush possible. With my 88 not beating any part of my opponent’s range, I had to decide between bluffing and giving up. Some players feel compulsed to bluff in these situations – justifying their compulsion by saying something like “betting is the only way I can win.” However, if the only way to win the pot is a -cEV play, you’re better off simply giving up. When deciding between bluffing and giving up, you need to account for your opponent’s range, the range of hands you represent, and make a decision accordingly.

In this case, I thought that a river bet of about T1,800-T2,200 could get AJ and KJ to fold. A bet of T2,200 only needs to succeed T2,200/(T2,200 + T3,100) = 41.5% of the time to be profitable in the long run. AJ and KJ represent 24/54 = 44.4% of B’s range. Combine that with the small probability of my opponent folding other hands in his range due to me possibly representing {75s, 65s, 54s, JJ+, 55, 22}, and a T2,200 lead looks to be profitable here in the long run as long as the bluffing part of my range isn’t too wide – something like {88-66}. Of course, exploitatively speaking, my bluffing range can be wider than 88-66 if my opponent doesn’t think I’m capable of launching such a bluff here.

If we suppose that QJo is also in my opponent’s range here, the math changes a little bit. If we, again, assume that only AJ and KJ will fold, leading will now only work 24/61 =  39.3% of the time. Given the entire range I’m leading here, and given my uncertainty as to whether QJo is in my opponent’s range, a T2,200 lead is still probably +cEV. Whether a T2,200 lead is the most +cEV bet given my leading range is another question entirely. And of course, we should also question my intended leading range to begin with!

If I was currently in Vegas, I’d crank out some CardrunnersEV analysis to figure out what the best bet is given a leading range of {75s, 65s, 54s, JJ+, 55, 22, 88-66}. And I’d also have some fun tinkering around with various leading ranges (and bet sizes given those leading ranges). But since I’m currently in Taipei enjoying some quality time with my wife (who is currently napping), I think I’ll cut the analysis short and simply state my belief that small-medium pocket pairs can make for interesting hands to turn into bluffs when you believe they have little-to-no showdown value.

(For those interested in the result of this hand, I led T2,200, and my opponent tanked for 1-2 minutes. He counted his stack – which was maybe about T3,500-T4,000 – and he eventually called with QJo. Given his mannerisms, I think he was waffling between calling and folding. However, there’s a chance that we was waffling between calling and shoving. Of course, the result of this hand doesn’t make me any less gun shy in these situations. After all, if you’re not willing to strap on your seat belt and embrace calculated risks, you’re pretty much dead money in tournaments with top-heavy payout structures.)

May Your EV Always be Positive!

Tony Guerrera

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Feel free to repost this as long as you include the following author box (including hyperlinks):

Tony Guerrera is an established poker author, an instructor at PocketFives Training, a member of Team Moshman, and host of the popular poker strategy podcast, Killer Poker Analysis. Tony blogs about decision optimization on and off the felt at KillerEV.com.