A small problem I have

[Gamblor]

In finance, equity refers to the value of the investment claims after debt/cost.

In poker, should we get unlucky and lose the pot, we do not have any equity in that pot. we get nothing. If there is a 10% chance of folding a better hand with a bet, we do not have any equity should the villain call.

Quite simply, only the best hand wins the pot at showdown - we do not get 90% of the pot just because we were a 9-1 favourite.

Is there not a better word to describe what we refer to as the pot size in terms of our chances of winning it?

[Pepsquad]

"...we do not get 90% of the pot just because we were a 9-1 favourite."

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Yes we do. Maybe not today and maybe not tomorrow, but over the course of YEARS, we will get roughly 90% of the pot as 9-1 favorites.

[thejameser]

[ QUOTE ]
"...we do not get 90% of the pot just because we were a 9-1 favourite."

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Yes we do. Maybe not today and maybe not tomorrow, but over the course of YEARS, we will get roughly 90% of the pot as 9-1 favorites.

[/ QUOTE ]

i don't know that i would even quantify it in terms of years, just 10's of thousands of hands.

[gonores]

THANK YOU

I've thought the same thing ever since I heard the term "equity" used in a poker sense. Unfortunately, I think that term has too much momentum to be worked out of the poker mainstream. Just take solace in the fact that you're smarter than everyone else in the poker world when it comes to this subject.

[Gamblor]

really?

so suppose I get sucked out on.

what's my residual?

[goofball]

are you familiar with quantum mechanics?

(it's relevant, I promise)

[SA125]

Excellent analogy and the answer you're looking for is - Chance. Poker is a game of chance and those are your odds at the time until the hand is over. No more, no less. Over the years has nothing to do with it. The roulette wheel is given as the example of how the house will win because of it, but the house and it's odds always remain the same in roulette. The players in poker are like fingerprints, not the house. No two are the same and will never have the exact same amount of luck to equalize and realize that 90% portion being a favorite. No where near the example of being the same as playing the odds and winning like roulette.

[ QUOTE ]
Yes we do. Maybe not today and maybe not tomorrow, but over the course of YEARS, we will get roughly 90% of the pot as 9-1 favorites.

[/ QUOTE ]

Another poster gave us that TOP version which I've come to believe is unrealistic and has done two things very well. One is to convince many well read players that that is in fact the case and it will all even out over the long term and you'll win that deserved share. Second is line DS's pockets for having the copyright to the idea. Can't blame him for that. The rest of the book is great.

In a mikel. JJ post, Diablo did a good job of putting the idea of the long term idea into perspective. That it basically doesn't matter with the poker decision at hand and has little effect on much else.

Mason did an even better job to squash it in the magazine when he filled in for grandma(?) and told the one about consoling the loser who busted out with AKo to 83o on his first hand in the WSOP that it's okay, he just made a fortune in the long run.

[DpR]

[ QUOTE ]
In finance, equity refers to the value of the investment claims after debt/cost.

In poker, should we get unlucky and lose the pot, we do not have any equity in that pot. we get nothing. If there is a 10% chance of folding a better hand with a bet, we do not have any equity should the villain call.

Quite simply, only the best hand wins the pot at showdown - we do not get 90% of the pot just because we were a 9-1 favourite.

Is there not a better word to describe what we refer to as the pot size in terms of our chances of winning it?

[/ QUOTE ]

You're way off here. What really is an equity in financial markets? It is a share of future earnings of a company. Those earnings have some % chance of being earned. An expected string of cash flows that the company has a higher % chance of earning is worht more than the same string witha low chance of earning (risk). The only difference is that this 'gamble' is liquid in the form of actively traded shares and it often takes years rather than seconds to determine whether the owner 'wins' or not.

In poker the pot is the expected cash flow, but there is some % chance you will win it. If you could easily trade your 10% chance of winning a $100 pot, it would trade for $10 minus fees. Thus $10 is value of your equity - no differnence from the stock market.

[SA125]

[ QUOTE ]
You're way off here. What really is an equity in financial markets?

[/ QUOTE ]

You're also off because the poster's statement -

[ QUOTE ]
In finance, equity refers to the value of the investment claims after debt/cost.

[/ QUOTE ]

Should have said "When INVESTING, EQUITY refers to the value of ....."

When you purchase Real Estate, you have tangible equity that will fluctuate with the market. That tangible equity has value and, as long as the property doesn't go into foreclosure, you can control and preserve your equity by making the necessary payments.

Comparing that to making investments in the public financial markets, like the stock market, isn't close. You can buy more, hold or sell to maximize the value of your equity, but you have no control at all to assure the value of your equity with stocks.

I've made money in both but only lost money with stocks. I made good money twice with Owens Corning, the maker of insulation. Then the lawsuits piled up and, out of left field, they declared. They were cash flow positive by a huge margin but did it to stop the future lawsuits. It was a shame. And totally out of the shareholders control.

[tolbiny]

"If he's bluffing 1 time out of 10 then my goal is to fold the 9 times hes not and call the one time he is."

T.A.

[Lawrence Ng]

[ QUOTE ]

are you familiar with quantum mechanics?

(it's relevant, I promise)


[/ QUOTE ]

Please elaborate.

Lawrence

[Lawrence Ng]

[ QUOTE ]
Is there not a better word to describe what we refer to as the pot size in terms of our chances of winning it?

[/ QUOTE ]

How about potquity? /images/graemlins/smirk.gif

Lawrence

[Gamblor]

[ QUOTE ]
are you familiar with quantum mechanics?

(it's relevant, I promise)

[/ QUOTE ]

I know some things about the photoelectric effect, Planck, Heisenberg, the wave-particle duality nature of light, particle spin and a few other basic concepts.

[Gamblor]

[ QUOTE ]
In poker the pot is the expected cash flow, but there is some % chance you will win it. If you could easily trade your 10% chance of winning a $100 pot, it would trade for $10 minus fees. Thus $10 is value of your equity - no differnence from the stock market.

[/ QUOTE ]

This can not be correct. As I pointed out before, at no point can you make such a deal and your share of the pot carries no residual value.

[Lestat]

I'm sure you're far more knowledgable about this than I am. But I don't understand.

When you purchase a house or any other investment that has residual value, your equity is as you state: "The value of the investment claims after debt/cost". But...


<font color="red">In poker, should we get unlucky and lose the pot, we do not have any equity in that pot. we get nothing. </font>

Well, what is your equity in a stock or house if you get unlucky and it's value is traded to zero? You get nothing, right? The same as it would be if you got unlucky and now your pot equity is zero, no?

It seems to me the difference is that pots are being "played", while stocks and investments are being "traded". Bets, raises, and the fall of the cards, change your hand's equity just as trading change an investment's equity. Maybe the problem is a misunderstanding on your part (although I doubt it)? POT equity refers to the equity that your HAND has in the pot. Just as your real estate refers to the equity a property has in real estate.

Either way. It's just semantics. Nothing serious enough to nit over. Justplay well and continue to make money. You could call it, cheese and crackers for all I care. Just give me the money when I win.

[Justin A]

[ QUOTE ]
Either way. It's just semantics.

[/ QUOTE ]

[Gamblor]

Well, what is your equity in a stock or house if you get unlucky and it's value is traded to zero? You get nothing, right? The same as it would be if you got unlucky and now your pot equity is zero, no?

You have the ability to divest at any time.

I'd love to be able to, at any point if I wished to, divest from any pot for my share of it.

There are some real opportunities to exploit some non-self-weighting gambles there.