#11
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Re: Major Problem with Bill Chin\'s Article on Variance
[ QUOTE ]
Whether or not the assumption of normality is justified, calculating the standard deviation requires no knowledge of the shape of the distribution. It would be a valid statistic, whatever the distribution. Or am I crazy? [/ QUOTE ] You're not crazy. The SD computation is valid regardless of the distribution. However poker players often use the resulting SD value in ways that might not be valid for distributions that aren't approximately normal. Such as computing the probability that a 2 BB/100 player with SD = 15 BB/100 will experience a loss over a given set of 2000 hands. |
#12
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Re: Major Problem with Bill Chin\'s Article on Variance
I am not sure how useful a statistic like semivariance (or downward deviation really is. It would seem to depend on the type of distribution one has. I have not seen any mathematical development of it. All there seems to be is a bunch of financial types throwing around sample numbers. The virtue of standard deviation as a measure of disperion about he mean is that you can actually prove theorems about its use, e.g. Chebyshev's theorem, Central Limit Theorem. There doesn't seem to be any theory for downward deviation, which seems to be more of seat-of the-pants sort of measure. But hey most poker discussion is pretty much wild-ass speculation, so maybe that's OK...
Btw, One can bet (fractional) Kelly and practice risk-management with skewed distributions. This is done usefully in video poker (for determining bankroll and bet size) and it is what I do in my article for evaluation long-shot bets. But for highly nonnormal situations, you may not be able to just use one or two parameters, such as mean variance (or semivariance!) -- anyone that tells you so is selling snake oil. An example of a really skewed bet: Sklansky's Zillion-to-one bet that the proof of Fermat's last Theorem is wrong. |
#13
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Re: Major Problem with Bill Chin\'s Article on Variance
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The statements above are complete claptrap. A player with a losing strategy CANNOT have long term positive expectation and a player with a winning strategy CANNOT have negative long term expectation. This is by definition. Therefore, someone who employs the strategy you outline above (loosen up when winning, but fail to tighten up when losing) will not have a winning strategy and WILL NOT have positive per hand expectation. Do you see why? [/ QUOTE ] It's not that simple. It is entirely possible to have a positive per hand expectation, and be 100% certain of losing all your money. For an example, suppose I bet you at even odds that the Ace of spades will be dealt first from a well shuffled deck. You clearly have a positive expectation. But if you play me double or nothing at this game until you lose, you will certainly lose eventually. The only question is how long it will take. The same thing is true of a gambler who has a positive expectation on each bet, but increases his bets when he wins and doesn't reduce them when he loses. Say you're flipping coins with me and I pay you 2:1 each time you win. Again, you have a positive expectation on each bet. You start with $10 and bet $1. You always bet 10% of your stack or your last bet, whichever is greater. Sooner or later you will lose ten flips in a row and lose all your money. This is the gambler's ruin theorem. Positive expected value on each bet does you no good if you have a pathological strategy. Ever wonder why casinos keep increasing the denomination of your chips if you win? Kelly is an attempt to exploit this insight for gain rather than loss. [ QUOTE ] Just because a player is caught in a bluff one hand and players may play him differently on the next hand does not mean his long-term winrate and SD will change. [/ QUOTE ] His long-term winrate and standard deviation do not have to change, that's the point. As long as the hand results are not independent, the long-term distribution of outcomes may not resemble a Normal distribution. And the long-term standard deviation may not be the per hand standard deviation times the square root of the number of hands. |
#14
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Re: Major Problem with Bill Chin\'s Article on Variance
[ QUOTE ]
You start with $10 and bet $1. You always bet 10% of your stack or your last bet, whichever is greater. Sooner or later you will lose ten flips in a row and lose all your money. This is the gambler's ruin theorem. Ever wonder why casinos keep increasing the denomination of your chips if you win? [/ QUOTE ] I assume the casino would do this because they have an edge and they hope you'll increase the amount of action you give them. It's ironic that you would give this practice as an example because it's the opposite. Your own theorem shows that if the casino carried coloring up customers and taking ever-larger bets to its ultimate extreme the casino would eventually go bankrupt. Gambler's ruin is a problem for the side that is +EV. |
#15
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It\'s Not All Variance
Dude...
This an internet forum filled with sociopaths... As are 100% of internet forums. There is constant gamesmanship going on around here... With the veterans abusing the newbies. Misusing statistics to invalidate other people's results... Is part of that gamesmanship. This place gets better every day... Because I now have about 50 nut bars on ignore. Your assumption that a "good player's" downturn... Is automatically due to expected variance... Is ridiculous. It's equally likely that the player in question... Is bored... Has a drinking/drug problem... Is suffering from erectile dysfunction... Has emotional problems or personal crises... Needs to have his medication adjusted... Is watching porn while he 4 tables... Or all of the above. The variance in SNG play is not very high... Maybe a 20 buy-in downswing every few months... On the backdrop of a 15-20% ROI... With no significant capital investment. It's hard to imagine a better business model. I trade about $2,000,000 in stock every day... And have been dealing with risk and variance... In a ** real world way ** for 10 years... So I have a better gut feeling... About what is statistically bogus... Than some egomaniacal grad student. rm+ [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] |
#16
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Re: It\'s Not All Variance
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gut feeling [/ QUOTE ] Gut feelings are meaningless in statistics. Use facts or actual theories to back up your arguments. I saw neither in your post. All you did was insult everyone who actually posted facts and/or theories without providing any reasonable alternatives of your own. I'm inclined to listen to people who will actually discuss issues more than those who throw around insults consisting of vague assertions and a murky claim of expertise. |
#17
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Response To Ad Hominum Attack By Angry Cola
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[ QUOTE ] gut feeling [/ QUOTE ] Gut feelings are meaningless in statistics. Use facts or actual theories to back up your arguments. I saw none of that in your post. All you did was insult everyone who actually posted facts and/or theories without providing any reasonable theories and/or facts of your own. I'm inclined to listen to people who will actually discuss issues more than those who throw around insults with nothing behind it besides vague assertions and a murky claim of expertise. [/ QUOTE ] Sir, it is those exact "gut feelings"... That separate a Poker Champion... For the also rans. I have a degree in Computer Science... With a heavy emphasis on stats/mathematics... From the University of Toronto. I have made over 200,000 trades on the NYSE... Over the last 10 years... And make a very good living... Using very sophisticated quantitative analysis. The stock market world is overrun... With completely bogus statistical fallacies... That are packaged and marketed as "financial products"... Designed to fleece the average investor. The vast majority of "truth" out there is nonsense. So the ability to dismiss such nonsense... In 5 minutes... Without resorting to complex, time consuming analysis... Is the ** essence of business/life experience **... Which would obviously be lacking... In a student who has never had a serious job... Or never run a successful business. Angry Cola, Why would you take the time... To send me a bizarre email yesterday... Criticizing my writing style? Shall I post your email? Mr. Sklansky has made this forum a bastion of free speech... And you don't like it. There can be a fine line between being a mod... And being an ** angry stalker **. rm+ [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] |
#18
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Re: Response To Ad Hominum Attack By Angry Cola
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And you don't like it. [/ QUOTE ] No, I simply brought up a few issues which you have still failed to really answer. But that's fine. Also, I was only responding to your attack on members of these forums. Do not act like your post wasn't an attack on people who post here. [ QUOTE ] Why would you take the time... To send me a bizarre email yesterday... Criticizing my writing style? [/ QUOTE ] Actually, I just asked why you chose to write the way you do. I then explained that your points would be taken more seriously if you used regular paragraph breaks. I had no idea you would take it so personally. [ QUOTE ] There can be a fine line between being a mod... And being an ** angry stalker **. [/ QUOTE ] So, sending you one PM, answering your replies, and replying to your attack on posters in this forum equates to stalking? I think not. [ QUOTE ] Mr. Sklansky has made this forum a bastion of free speech... [/ QUOTE ] This is not true, but your sentiment is appreciated. |
#19
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Dancing With Mister Cola
I re-read my post...
And I don't see any specific "attack" on anyone. I just made some general statements... About the reality of internet forums... Most of which are a pretty hard place. And some examples of how people sabotage their poker EV... By boredom, drinking, etc. And then blame it on "variance". Half the post was a big joke. You need to lighten up... This is just an internet forum about poker. rm+ [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] |
#20
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Re: It\'s Not All Variance
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The variance in SNG play is not very high... Maybe a 20 buy-in downswing every few months... On the backdrop of a 15-20% ROI... With no significant capital investment. [/ QUOTE ] Again you're making statements without knowing what the [censored] you're talking about. Have you spent much time in the STT forum? The simulations using SD and ROI (the STT equivilent of winrate) show larger than 20 buy-in drops. And guess what. VERY GOOD STT PLAYERS HAVE SHOWN THOSE SAME LARGER DROPS. Have you seen posts by IrieGuy? ZeeJustin? Here's a snippet from ZeeJustin's report about his 1,000 SnG in a month quest: ------ My goal was to make 30k in this quest, so things were going very well, until they took a turn for the worse. After that, I went on the biggest downswing I have ever had at the $200+15 level, and lost $8,500. ------ That's a 39 buy-in downswing. And this is from a guy who made almost $30,000 playing those 1,000 $215 SnG's in a month. I'm sorry to burst your bubble with real-world results. I agree that SnG's are a great deal. I play them myself. But, I don't care what you think about your "gut feeling" for this stats stuff. Real world results agree with the "freshman statistics" and disagree with your "gut". |
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