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Old 11-29-2007, 01:01 PM
warrantofice warrantofice is offline
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Join Date: Jul 2007
Posts: 463
Default Re: The Ceiling Concept

I realize that i didn't complete explain my concept of the market ceiling. The reason there is a ceiling in the stock market at around 500 million dollars is that when your principle amount of money reaches that much, it becomes to large to invest in smaller companies, because you either will end up owning the company or not allowing enough shares for the market to dictate the value of it, you also can't invest small portions in lots of companies because of the ammount of time involved in researching the companies, you'd need a very very large team of great investors looking in many different markets, which is impractical. This basically forces you into investing in large companies, though the problem with this is that, large companies are generally held by lots of people so the shares are generally very accurate in representing the company worth. Similar to sports betting on the NFL, unless your the very best, the lines are so close to the true chance of a team winning, that the average bettor can not make any money off them.

So when were discussing this in regards to poker, the pool of players obvs shrinks as you move up in limits. You can't take advantage of all the donkeys at the 10nl level when your playing but the possibility that a good portion of the 8 players you will play against at your 10nl table will suck is very high, well the proportion of donkeys at each subsequent level decreases probably to some percent, although there may be some random varation. So when you start to reach the 100/200nl (some random level i choose) then the probablity that you will sit with a donkey has dratmatically decreases, and your now happy if some of the players have even a couple of leeks. So obv everyone undstands that the variance increases as skill increases.

The next factor is that if your treating your money and time spent at poker as an investment, than you'll be looking at your entire bankroll as your principle to grow. Now lets consider a poker player who has 1 million dollars, he wants to grow it, well he plays 25/50plo table and wins $5 000 so now he has $1 005 000 dollars. Congrats he just increased your bankroll by .5% so obv its kinda pointless so he steps it up to the 250/500plo tables and win $50 000, you just increase your bankroll by 5% , he feels like he accomplished something now. However, now that 5% of his entire bankroll is on the table and when he looses it, well it works a lot different from winning obv... ever time he wins 50k 250/500plo he's not winning 5% anymore and when he looses well the next time he buy's in to the game he's risking more than 5% of his money.

(going to use smaller amounts to make it easy)
100nl $2000br
win $100 = 2100br +4.7% increase to bankroll
win $100 = 2200br +4.5%
win $100 = 2300br +4.3%

Now watch when you loose

loose $100 = 1900br -5.2% decrease in size of bankroll
loose $100 = 1800br -5.5%
loose $100 = 1700br -5.9%
loose $100 = 1600br -6.25%

So as can be seen the compounding works against you on the way up, you need to keep more money in play to keep the same size of returns, however, as you loose money you can't keep at the same level of play without threating larger and larger percentages of your bankroll each time you play.
I hope this helps answer the question at bit better though.
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