Raise or Fold:  A Year of Risky Business

Writing and playing poker as if they were activities worth doing well.

Wednesday, February 25, 2009

Q & A: Why the Heck Do You Use ROI to Report Cash Results?

Faithful reader Anonymous queries in the comments to a recent results post:
I've always had trouble understanding the "Results" that you give in this blog.

I understand tournament ROI, but what the heck is cash ROI ? ROI is not a metric that I've ever seen used in cash poker and seems completely usless. I mean, if you buy in for $1000 and win $100 your ROI is 10%, but if you buy in for $500 and win $100, your ROI is 20%, but you won the same amount!

I assume you made that up as a way of giving results without actually discussing how much you won? Or am I missing something?
I started calculating and using cash game ROI for a few reasons, only a few of which may be good ones.

When I began this project, my primary objective in record-keeping was to determine if I could make a living playing poker given my starting bankroll. First: could I be profitable? Second: if so, how profitable? And third: would I be able to support myself given the small stakes and modest bankroll I began with? How would poker-playing compare to other ways I might choose to invest my money? (For example, my money is doing a heck of a lot better in my bankroll ~ right now ~ than it would be in the stock market, or indeed most typical investment vehicles!) I don't think ROI is completely useless as a metric. It gives me a general idea of how much money I have to put at risk, in the games I play, in order to achieve a certain monetary return.

It is true, as Anonymous suggests, that I wasn't particularly eager to reveal publicly the exact size of my bankroll, to always be specific about the stakes I was playing at, or to detail the absolute dollar amounts won or lost. Despite the common notion (probably derived from TV broadcasts that talk about lifetime tournament winnings) that poker players' results should somehow be public information, I prefer to keep these matters private unless I have a good reason to share them.

And, to be frank, I was also clueless about the need to keep statistics that would help me track the information that is most useful in analyzing one's cash game results across various stakes, e.g., BB/HR. (I would point out, however, that the same concern is true for tournaments as for cash games: ROI tells you NOTHING about actual profits. All I have to do is win one larger-buy-in tournament and that makes up for a whole lot of losing at lower stakes in ROI terms, if I lump them all together.)

Recently, I have begun tracking winrate statistics for my cash play, including stakes and time played per session as well as profit/loss results. If ~ after I have accumulated enough data to be worth analyzing ~ they reveal something interesting or meaningful, I may eventually write about them.

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