Quote:
Originally Posted by fast11375
That is not necessarily true. Variance is a tangible cost. That is why equities prices on the stock market are heavily influenced by volatility. Or you can look at the insurance industry where people pay to reduce variance.
What value would you put $7 eV if right now we coin flip: you get either -$100,000 or +$100,007 at 50/50 chance? Your answer will probably change if the payout changes to $-5 or +$12.
But I do agree that $7 is a lot to pat for variance. If we fold in similar spots once per hour, we will lose out 2.33 blinds/hr at 1/3.
Not all EV is created equal. You can compare this to the Sharpe Ratio in finance which measures risk-adjusted return.
Sharpe ratio = (Mean portfolio return − Risk-free rate)/Standard deviation of portfolio return
Which can be adjusted to poker as simply: EV/St.Dev
Since most people are under rolled for whatever games they are playing in, I think it is worthwhile to chase all +EV situations that are negligible to your BR while passing up marginal EV spots that will have a detrimental effect on your BR (like already being stuck for the night while 300-400 BB's deep and finding yourself in a very marginal but +EV stack commitment situation).
My stretch of runbad really forced me to reconsider the notion of risk/reward at poker and decide that the long-term approach is best for achieving my goals. Sure it would be nice to be playing 10/10 again right now and I could certainly shot take on weekend nights, but the downside risk is significantly greater than the potential rewards right now, aka a low Sharpe Ratio for me personally.