Variance Insurance

[zachvac]

Zachvac - Brilliant thread! Did anybody take you up on your offer? Whilst many of us complain about our bad beats, we know lady luck averages herself out in the long run, so I won't be buying - besides, if I had insurance, what would I have to complain about?

Like all insurance, read the fine print. Sure Zach says you need it but when it comes time to pay out, who is the adjuster?

shhhhh, you guys posting is horrible for business. No one's taken me up on my offer so far, guess I'll just have to sue you two for loss of business.

 

[zachvac]

Also note that in all seriousness this could be +ev for everyone involved. How you ask? Well I have the answer:

you're a 25nl player, crushing it and could be crushing 50nl, but pesky BRM is keeping you down. So since you buy variance insurance (+ev for me since payouts are neutral-ev and I take a cut) you can now play 50nl and almost double your winrate, with a lower bankroll because risk of ruin is now lower with variance insurance. Sure you're paying me .25 PTBB/100, but the winrate probably doubled from like 2 (which was 4 PTBB/100 at 25nl) to 3 PTBB/100 (this is assuming 50nl is tougher and you lose a PTBB/100 because of the difficulty factor). Increase of 1 PTBB/100 at 50nl, .25 goes to me, you net a +ev of .75 PTBB/100 at 50nl. The only loser in this proposition is the people at 50nl whose money you take .

 

[blankoblanco]

hey zach, i might honestly take you up on this if you extend this to 200NL. i think it could be +EV for both of us. i have serious psychological problems playing through downswings, and just generally don't play as much as i should for fear of inevitable doomswitches. i think i'd be able to put in way more hands, and the mere comfort of not having to deal with such harsh swings is probably worth the money to me. let me know if you want to try

 

[zachvac]

hey zach, i might honestly take you up on this if you extend this to 200NL. i think it could be +EV for both of us. i have serious psychological problems playing through downswings, and just generally don't play as much as i should for fear of inevitable doomswitches. i think i'd be able to put in way more hands, and the mere comfort of not having to deal with such harsh swings is probably worth the money to me. let me know if you want to try

Well basically it's bad for me to just buy your variance, but if I could get enough people I'd definitely do it. Just don't think I could handle the 0.25 PTBB/100 winrate with all the variance. Also note that it doesn't wipe out downswings, only downswings caused by you getting your money in good and getting sucked out on. When you get set over setted or KK vs. AA or they just show up with the top of their range it doesn't help.

 

[blankoblanco]

Well basically it's bad for me to just buy your variance, but if I could get enough people I'd definitely do it. Just don't think I could handle the 0.25 PTBB/100 winrate with all the variance. Also note that it doesn't wipe out downswings, only downswings caused by you getting your money in good and getting sucked out on. When you get set over setted or KK vs. AA or they just show up with the top of their range it doesn't help.

yep, i realize that, but it would be enough to definitely decrease the size of my swings

 

[eNTy]

So Zach, is this how you earn back your money lost on your own downswings ?

 

[diamond_06_06]

Link this thread to Phil Hellmuth. That guy could be your biggest customer.

 

[BelgoSuisse]

Do you sell Slansky bucks insurance? That would be sweet.

Also, your scheme assumes that when I run above expectation, i'm supposed to ship you the extra money, right?

 

[BelgoSuisse]

- depending on how well I know you either we agree or you send me a deposit. We agree upon number of hands (in 1k increments) and after you play them we set up the client so it sends the hands from when we agreed to present time to my email address, at which point I import the hands into HEM, we determine how well/bad you ran and I pay you the difference.

Isn't there a rule on most poker sites against sharing large amounts of hand histories?

If this is actually within the sites rules, then i could actually be interested on taking insurance for the next 10k hands at 50nl. Mostly to see if it changes the way I handle the psychological aspects of the game.

 

[zachvac]

Do you sell Slansky bucks insurance? That would be sweet.

Also, your scheme assumes that when I run above expectation, i'm supposed to ship you the extra money, right?

1. No I don't, because Sklansky bucks are biased, as the cards to come influence whether the hand goes to showdown. So if you have people chasing flushes without odds, Sklansky bucks would indicate that you are below expectation because the times they miss they probably fold.

2. Yes. You pay a bit of extra money, and you end up winning exactly the amount of your all-in ev. Basically it takes the luck out of the game for you when you get all the money in. This means it takes good luck away too.

 

[zachvac]

Isn't there a rule on most poker sites against sharing large amounts of hand histories?

If this is actually within the sites rules, then i could actually be interested on taking insurance for the next 10k hands at 50nl. Mostly to see if it changes the way I handle the psychological aspects of the game.

I'm not positive but I know people do this with prop bets and such. I think as long as I don't put the db into HEM and use it for help in my games that it isn't a violation, but we could check to make sure. Is this pokerstars?

10k hands at 50nl = 100*100 hands = 100*$1*.25 = $25 would be the fee for 10k hands. Let me know for sure if you want to take it.

 

[Paranormal]

hey how will you figure out what is variance and what is just bad play?

like all in preflops?

coolers?

or less then 4 outs to the river?

im curious to how you think this will be profitable. i myself am not keen on statistics and adding up all the numbers to crunch what variables you will insure or whatever but i am curious as to how you cme to the conclusion.

if you dont mind we can talk about this in PM. i may be interested in this if i decide to start multitabling here soon and grinding up more money on stars..


thanks

 

[zachvac]

Only once the money is all-in. When the money is all-in you have a certain equity in the pot. You will then win or lose the pot. We take the difference between equity and money won and that is your luck. If you lose the pot, I pay you your equity. If you win the pot, you pay me the difference between the pot size and your equity.

So for example, 50nl you get AA vs. KK AIPF. If you win, your equity was $80, you won $100, you owe me $20. If you lose, your equity was $80, you won $0, I owe you $80.

 

[zachvac]

im curious to how you think this will be profitable.

long run ev, like any insurance, is in my favor. By taking my insurance you are hurting your long run expectation. But it's only by a tiny bit (.25 PTBB/100 at 25nl+) and you save from the crazy all-in swings (for example I've had weeks where I ran $1k below ev and where I ran $1k above. It'd be nice if I just had a steady increase). Also what limit would this be? I initially said nothing over 50nl but as combu has expressed interest at 200nl I'd consider taking some people over 50nl if I could get enough business. Let me know.

 

[Paranormal]

so if i have a10 vs kj and it goes all in pre it still applies? im more curious as to what percent favorites you will insure? say qq vs ak and im holding qq can i shove knowing im insured here?

 

[zachvac]

so if i have a10 vs kj and it goes all in pre it still applies? im more curious as to what percent favorites you will insure? say qq vs ak and im holding qq can i shove knowing im insured here?

Yes, any time all the money is in and there can be no further action. This includes shortstack shoves and any time there can be no more future decisions. I'll have to consider what my policy would be for 3-way pots with 1 all-in, but atm I would not insure those, ie there has to be no more decisions left to be made.

In your scenario with qq vs. ak yes you would be insured, you'd get approximately 55% of the pot no matter what (if you won I'd get the difference if you lost I'd ship you the difference), same with AT vs. KJ. Anything from 51-49 to 99-1 when all the money possible to go in is in.

On edit: actually 50-50 would be insured as well, if you won you'd ship me half and if you lost I'd ship you half, but you would still be paying the rake.

 

[feitr]

Just rambling. Lets say you take 5 players, all together they add up to 0EV. Player 1 is 0 EV, P2 is a little below EV, P3 is running super hot, P4 is running like shit and P5 is a little above EV. You make a small profit on player 1, 3 and 5 and probably break even with P2. But you get owned by player 4 because you can't receive a "cut" of P3 running like God. For you, he might as well be running at 0 EV.

So seems to me that over time if you have some ppl that are running really good and bad you could have 0EV overall, but your payout is going to be very -EV, because you get owned by the ones running bad and don't receive representative cuts of those running good.

This may not make much sense and i'm not goign to bother doing math so it might not even be right, but seems to me to be a bad idea unless you can get ALOT of ppl to participate in order to smooth out the variance.

Just speaking from somebody who ran 20 buy ins below EV over 20k hands a little while ago, which is -5BB/100. You'd need 20 other guys (charging 0.25BB/100), all running above EV in order to make a profit over that 20k hands.

 

[zachvac]

But I do receive cuts for people who run like god. Maybe I wasn't clear but if you run super-good, you owe me money (that's why I said I'd probably have to take deposits from people I didn't trust, because if you run $500 above ev, you owe me $500). Basically with what I'm doing, you run exactly at ev 100% of the time. If you're running good, you give me the difference. If you're running bad I give you the difference. Meanwhile I get a cut from you for reducing your variance. Remember variance is in both directions. Just because people call it being good instead of positive variance when they win a ton doesn't mean it isn't positive variance.

 

[feitr]

Ok. I'm rather tired atm and brain isn't really functioning. I guess it would be logical you'd get the cut if ppl run good.

WELCOME TO FEITR'S VARIANCE INSURANCE BUSINESS. OFFERING 0.2BB/100 (IE. BETTER THAN ZACHVAC) AND I WILL BE AVAILABLE FOR UP TO NL100K.

 

[blankoblanco]

yo comprendo, i still want, i still want

 

[MrSwissCheese]

umm, variance insurance >>>>>>>>>>>>>>>>>>>>>> Geico

Variance insurance is going to get Zachvac a "big tricked-out name tag"

Wait. . . That's Progressive, isn't it. I guess you're just going to get a lizard.



(Before someone gets upset, Yes I know its a gecko, not a lizard)

 

[idlehands80]

AFFFFLAAAACKKKKKKK. This would probably work.......Who the hell im I kidding im pretty new to poker and all this mumbo jumbo sounds like instructions on building a rocket ship. After business takes off you could get your own website and market it like one of those MLM "opportunities".

Slogan "Why lose your money when you could lose ours"

"variance insurance will not increase the size of that certain male body part but with all the money your making she wont care. Valid only while offer is valid which is determined by the alignment of the constellation ursa minor and only when applied to the square root of Pi. No warranties implied and all variance insurance is subject to variance."

 

[blankoblanco]

so, any chance of this coming to fruition!?