Bet Sizing Guide for an Optimized Life | Ep 41

Today I wanted to talk about a tweet that I sent a few days ago , and the tweet said the best bankroll management strategy is the one that keeps you from going broke and slash or being really sad , while also not missing out on too much upside .

It's funny because when I first started gambling in poker , I thought bankroll management as a very mathematical , easy to solve topic . It's like okay , what's my expected ROI ? What's the variance ? Okay , how many binds do I have to have to never go broke but also make as much money as I can ? And there's nothing wrong with thinking like that .

I think that's definitely the base . You know that's a good foundation and beyond that , if you think about what Kelly is and I'm not going to you know this won't be , I try not to make these Saturday ones too mathy but basically what Kelly is is if you perfectly can define , like your , the true probability and the payout , then Kelly works perfectly right .

And if you're a robot and you knew the true probability of an event happening and , of course , you knew the payout that you're getting . You would just use full Kelly and that would be the optimal choice . Problem is there's two problems . One , we're not robots . Two , we never know true probability .

So that's why people use quarter Kelly or half Kelly or you know whatever , whatever fraction of Kelly they want to use , because they're basically protecting themselves from being unaware of the true probability , which we all are . Now you could just say , okay , I do quarter Kelly right , and then act accordingly right .

The reason that I say the reason I highlight not going broke and or being really sad is because those are really the only two things that matter for your long , the long term health of your gambling .

So let's say , you optimize , and you optimize for quarter Kelly for a year , but you go through a huge downswing and you quit or you get very discouraged and you start betting less .

Now , even if you've optimized from a bankroll management standpoint or like a , even if you've optimized mathematically there , you've not optimized for your overall earn , your overall dollars earned .

Because if your bankroll management strategy frustrates you to the point where you ever take any time off or you put in suboptimal bets , then I don't really care too much about like the extra .

You know the extra percent you're getting there because it's completely , it's washed away , like anytime you have to take you know a mental health day or you know you make a punter to here or there . So it's so important and this is I never really like I would . If I heard this when I was 22 , I'd be like this guy's an idiot .

It's so clear , it's obvious . Like there's a mathematical equation Kelly works like just grow up in you know back Kelly or back quarter Kelly , and just you know whatever .

But I had , I would say , like a pretty tumultuous early career where I was probably I wasn't mathematically over-betting you know it wouldn't be considered over-betting , if you like ran the numbers and whatnot , but I couldn't really handle the swings . And this is in poker . It's a little different , but you know it's not that different .

So what I'm saying now is like I think more about the entire picture and I want to create a sustainable betting practice that I can , you know , every day . You know come in place my bets and then go about my everyday life .

Like another part of bet sizing is you want to place a bet where you don't really give a fuck if it wins or loses , like that would be the third thing I would say , like you really don't want to care if it wins or loses .

If you care a lot , whether about wins or loses , you probably are over-betting and you might be betting like a smaller percentage of your bankroll than me . But if you care a lot if it wins or loses and I'm betting a bigger percentage of my bankroll and I don't care , then I still have an advantage because if it loses I'm going to be unaffected .

So that allows me to continue to optimally place bets right . If you care a lot and it loses and you're affected , then you're betting too much , right , and that has nothing to do with the percentage of the bankroll you're betting . That has to do with your own kind of emotional makeup when it comes to sports betting .

That's something you can improve right , and being able to improve that is such a huge win in terms of , like , your longevity of your career and your actual profit . That is a skill . To be able to care less about betting bigger sizes responsibly , of course , Like this is all in the all

roped into . Not going broke is rule number one . Don't go broke . Rule number two don't be sad this falls under that right . The higher the percentage of your bankroll you can bet without caring . That's a skill right . That is a huge skill to have because it's going to allow you to bet closer to optimal , closer to Kelly , and also lead a normal life .

And to be able to do this for a long time you have to be able to lead some type of , some semblance of , a normal life , alongside of the variance that's inevitably going to come in advantage gambling .

So , anyway , I actually this was a mindset shift for me in the last couple of years and it's been one of the biggest have , one of the most positive impacts in terms of , like , changing my point of view on something , at least when it comes to gambling probably the most positive impact of any mindset shift I've had in relation to advantage gambling .

So I've really believe in this . I hope everybody gets something out of this and can kind of reframe how they think about bankroll management and understand it's okay to not bet quote unquote optimally In Kelly . You have to be able to bet to optimize your life , to optimize your long-term profit . These are all things that you need to take into account .

We are humans and that's okay . We're going to act like humans . So just remember that , account for that and optimize based on not only the formulas but also on your personality , right ? Okay , well , hope everybody has a great weekend , hope this was helpful and I will see you guys on the next episode . Durableрушения .