What I did wrong in 2011

I'm finally caught up on everything.  After spending a lot of time with a blizzard, income taxes, and software issues (especially Holdem Manager) I'm pretty much caught up on everything.  And expect for a type of tournament that I rarely play anyway, Holdem Manager is handling my tournament results just fine.

As far as my records, before I get much farther into 2011, I'm seriously thinking about not keeping handwritten records at all, just putting everything on online spreadsheets, and formatting it so that I can get the information I need quickly and easily at tax time next year.  If I set up the spreadsheet correctly, all of the numbers that I need for income tax purposes (number of net win tournaments, number of net loss tournaments, total of net wins, and total of net losses) will be right there at the bottom of the approriate columns.

The more I think about the IRS requiring handwritten records for "gamblers", the less sense it makes.  At a time when some companies are almost entirely electronic (my doctor and his nurses type the results of my visit into a netbook, with nary a piece of paper in sight) it makes no sense that I have to do that, and I'm not going to.

Now that my rant is out of the way, on to the topic at hand.

I made some mistakes last year, and the biggest was bankroll management.  I know, I made such a big deal out of proper bankroll management, and I still think that it's absolutely necessary to a poker career.  But when I took a good look at all of last year's records, it's obvious that I fudged my BRM a bit.  And fudging even a little, with something that important, can have very nasty consequences.

One of the premises of my Consolidated Bankroll Management Formula is that in the micro (under $5 buy-in) tournaments, I should have at least $50 buy-ins.  When I cashed out $50 of my $100 bankroll, that put me close to the line, and I fell victim to a common conceit among poker players--I've been above $100 several times, it won't take me too long to grind it back up, right?

Wrong!

No one escapes variance, and I knew better.  As Collin Moshman states in his seminal book, Sit 'n Go Strategy:  Expert Advice for Beating One-Table Poker Tournaments, p. 238, if you start with a bankroll of 25 buy-ins,

"The downside is you must be willing to go broke, as even the strongest player is not immune from a 25 buy-in downstreak. . . "

Taking $50 out of my account didn't take me down to 25 buy-ins, but it certainly put me in dangerous territory, with under 50 buy-ins--because I wasn't actually playing $1 tournaments.  I was playing tournaments with a buy-in of betwen $1.10 and $1.40.  Being underrolled definitely affected my play, and led to a cascade of  mistakes and bad choices.

So, here are my errors:

1. I was not playing with a big enough bankroll, and,

2. This affected how I was playing.  When I started on a downswing, I wasn't thinking about the best tournament for my style, or when the best tournaments were running.  I was playing scared, and thinking about which tournaments had the least risk (which also, of course, means the least reward).  I was trying not to lose rather than trying to win.

3. I played too many high-variance tournaments.  I was playing a lot of $1.10 tournaments with fields of over a thousand or more, which is a good long-term strategy to make a lot of money.  I am a long-term thinker, but I should have abandoned that when I was trying to keep a bankroll.  Fifty buy-ins is nowhere near enough to play high-variance tournaments.

With my Consolidated Bankroll Formula, the key word is "Consolidated."  It was meant to leave me with a big enough bankroll to play a mix of small and large tournaments.  When I started investing more and more of my playing time in the larger tournaments, my variance swung the wrong way, and I got what I deserved for my foolishnesss.

I didn't have the luxury of waiting for weeks or months between big MTT scores, and I should have switched to SNGs and other tournaments of one, or a few, tables.  The cashes are a lot smaller, but also a lot more regular, and it's a good way to steadily build up a bankroll.

4. I didn't move down in buy-in.  There are PokerStars tournaments for buy-ins of less than $1.10, in fact, about a month ago I won a couple dollars in a 10¢ MTT (Facebook Poker League).  I should have been playing tournaments like that months ago.

I've learned from my mistakes, and  I've changed my approach.  I'm done with the large MTTs for now, except perhaps for the Facebook Poker League, where the softness of the field (horrible play) cancels out the variance of the tournament size, and makes it marginally good choice to play in my situation.  As my bankroll grows, I'll start mixing a few non-Facebook League MTTs in.  The biggest field that I've played against in the last two weeks is 90 players, and about half the tournamments that I've entered in the last few days had an entry fee of 25¢.  It shouldn't take too many of those to boost my bankroll enough that I can breath a little easier.

In the twenty-seven 25¢ tournaments that I have played this year, with fields of 27, 45, or 90 players, I have an ROI (return on investment) of 94%.  An ROI of 25% is normally considered outstanding with fields of that size.  My total profit for those tournaments is $6.71.

So, I'll have to humble myself  and play at the baby stakes for a while, but as I play more of these, and get an even better feel about how these tournaments run, it shouldn't take long to add a quick $20 to my bankroll, and return to playing some serious poker playing again.