Devo's backing article

[Greg (FossilMan)]

Create an imaginary record of results for a tournament player over a series of 100 events. If you can, get real data from a random online player for 100 tournaments in a row. Now, do the math if you had backed him for each event 1 at at time with him keeping a percentage of the profit. Now, do the math again, for the same set of 100 events, but this time give him a percentage of the net profit for all of the events combined.

In the first instance, the player has to make a profit for himself, unless he fails to cash in all 100 events. In the second instance, if the player loses, he gets nothing for his time. If the player does make some nice cashes, and a net profit, he will still end up with a LOT more money in the first instance, if the percentage he gets is the same. In fact, it is quite easy for a player to win over the period, and for the backer to lose, if the results are paid out to the player 1 event at a time.

Later, Greg Raymer (FossilMan)

[ReptileHouse]

Examples are wonderful for this sort of stuff. I was missing that in the second case (multiple events) that the profit, if any, would not be split until after all the events had completed. I was erroneously assuming that profits would be split after each event in both cases.

Thanks, it makes sense now.

[Zetack]

[ QUOTE ]
Create an imaginary record of results for a tournament player over a series of 100 events. If you can, get real data from a random online player for 100 tournaments in a row. Now, do the math if you had backed him for each event 1 at at time with him keeping a percentage of the profit. Now, do the math again, for the same set of 100 events, but this time give him a percentage of the net profit for all of the events combined.

In the first instance, the player has to make a profit for himself, unless he fails to cash in all 100 events. In the second instance, if the player loses, he gets nothing for his time. If the player does make some nice cashes, and a net profit, he will still end up with a LOT more money in the first instance, if the percentage he gets is the same. In fact, it is quite easy for a player to win over the period, and for the backer to lose, if the results are paid out to the player 1 event at a time.

Later, Greg Raymer (FossilMan)

[/ QUOTE ]

But in either case, the idea posited in the originally cited article, that backing a winning player is risk free, simply doesn't hold water.

[MaverickUSC]

It's pretty damn risk free as far as the world of poker goes. Me sitting at the table is not a risk free proposition, but I like my job security much better than somebody with a job. Sure there's a risk that I'll go broke, but it's pretty unlikely. If you are backing a player with integrity and a winner then you are making as high percentage of a risk free bet as you can when it comes to poker.

Devo

[JohnnyGroomsTD]

If you are a winning player, aren't you in essence, backing yourself? Yes, the division of profit goes 100%-0%, but in essence you are your own backer. Is this a losing proposition? Just for argument's sake....

[MaverickUSC]

Obv no jobs suck and unnecessary.

Backing myself is a risky proposition if I suck at money-management and go busto.

Devo

[Bakes]

"When I back people, I expect the same thing. I will not back somebody if there is even the slightest hint of shadiness going on. I must have complete confidence in my horse's word of mouth, since that is what is attached to the poker player I am investing in."

Thank god someone understands this, what a breath of fresh air.

[El Diablo]

Mav,

It seems like you are making some assumptions like the backer having a virtually infinite bankroll and perfect abilities when it comes to assessing the skill level and integrity of horses.

[ncpokeresq]

Devo,
Not to try to touch on a sore subject, but didn't your backing agreement break down? Which points out another problem in backing: if the horse hits a score, as you did in the O/8 event, the backer may make the equivalent of a hit and run and decide to pull the plug.

[MaverickUSC]

Yeah, my agreement broke down after he blew $120k in cash games two weeks after my cash. OBV things can break down when the backer runs out of money, but that sucks for the backer more than the player cause then the player is out of the make-up hole.

Devo