March 2011--Results and comments

PROFIT AND LOSS
March 2011 starting bankroll  $48.04
March 2011 ending bankroll    $82.87
                                                             ----------
                                                         +$34.83


That's more like it!  $35 isn't a lot of money, but it's a 72% boost to my bankroll.  If I can put together a couple more months like that, my situation will be a lot different.

I'm getting closer to the $114 bankroll that I need to play $2.20 tournaments.  But it's about more than just moving up.  Having plenty of wiggle room at my current ($1) level gives me the flexibility to put some large MTTs into the mix and/or play multiple tables.  Bigger bankroll always equals more options.

The financial plan for the rest of the year
Once I start making some real money, the first financial step will be to start taking 10% of my monthly income as owner's capital, which is the accounting term for money that the owner takes out of the business.

Once I can comfortably do that and still build my bankroll, step 2 will be to take an additional 10% out for reinvestment in the business.  That could be used for software, poker books, office supplies, subscription to a poker coaching web site, or anything else that will keep things going and help me make more money.

Step 3, once I'm making enough, will be to take an additional 30% of my winnings to put in escrow for quarterly estimated income tax payments, which are required for anyone who is self-employed and makes a profit of at least $450 in a calander quarter.  30% is the recommended amount of escrow to make sure that taxes are covered.

I doubt that we will be in the 30% tax bracket when I do our taxes next year, but it doesn't hurt to be careful.  That money will be sitting in an escrow account, and if, as I expect, I have lot left over at the end of the year, I can go one of two ways.

I could take most of the money out of escrow, and divide it between owner's capital, reinvestment, and building my bankroll.  Or, I could just leave it there and take out a smaller percentage for next year's estimated taxes.

The importance of study
March is when it really hit me--There is so much to study.  There are so many things that I need to know, but don't.  It's almost overwhelming.

I misplayed a hand yesterday and threw away a few hundred chips.  I checked my opening hands chart (a list of the increased number of hands that, in various situations, I'm trying to get comfortable playing).  I looked at the chart, my cards were good enough, I played them, and I lost the hand.  Something was bothering me, and I realized what it was.  I had forgotten about another new chart that I made.

That chart showed that my hand was too weak to play against that particular player, because it wasn't in the top half of my opponent's range (it didn't fall in the top 50% of the hands that he had been raising with).

The situation was interesting because a month ago, I wouldn't have been trying to work those two things (playing more hands, and playing against my opponent's range) into my playing.  Two months ago I was considering playing more hands, but hadn't done much about it.  Six months ago, I had seen a few references on twoplustwo.com to playing against an opponent's range--but I thought that it was some kind of super-advanced concept that only the math geniuses who played for millions of dollars used.

But something kept bringing me back to chapter 6 of The Full Tilt Poker Strategy Guide: Tournament Edition, edited by Michael Craig.  Eventually it dawned on me that it wasn't that complicated at all.  If villian rasies with the top 10% of hands, I call or reraise with the top 5%.  That's it.  It doesn't take any math at all.

There is a mathematical explanation of the concept, but I don't have to understand it, at least not yet.  All I have to do is know what hands are in the different percentiles, so I ran that on PokerStove.  It was tedious, asking for the list of the top 1%, then the top 2%, all the way up to 60% (which should be all that I need, at least for now), and typing it all up.

And the reason that I need to play more hands, which is where I started all this, is not what I thought it was.  I thought I needed to loosen up my play so I wouldn't be predictable.  That was true, but it was not the whole truth.

I need to play in the top half of villian's range.  It's all one concept--play more hands, so I can play in the top 50% of villian's range.  It goes together!  I must have read that chapter 10 times before I finally caught on.  The chapter author, Andy Bloch, the M.I.T. blackjack guy, didn't explicity make that connection, but it was obvious when I thought about it.

Where does that leave me?  I have to get more comfortable playing all those hands.  I have to pay attention to the ranges of my opponents.  I have to play in the top half of those ranges.  And of course, that 50% number isn't absolute (almost nothing in poker is), as there are tournament situations where it would be correct to play slightly more, or fewer, hands.

One implication is that I'll need to hit the memory work harder.  I can't have charts all over the place for every new thing I learn.  That didn't work out well yesterday.  I'll have to commit those ranges to memory.  And when I start playing live again, I can't use the charts, it will have to be memorized.  Local live players are usually bad enough that I should come out at least a little ahead, but putting in some extra work could make live games very profitable.

I won't be reading any more poker books soon, and I'll be spending a lot less time on the poker forums.  I have enough to do trying to assimilate and incorporate one chapter of one poker book that I already have.  I have to be mindful of how easy it is for me to get lazy, let my ADD take over, and do something halfway.  What I'm studying now is too important to let that happen.  It's like a musican learning his scales.  I have to work on it until it's automatic.

There are other concepts in that chapter that I eventually want to work on, and I might have to work through it one page per day, trying to get it all straight.  But the potential rewards will make it well worth the effort.

I guess I have my study project for the entire month of April.  I might even consider playing fewer hours and studying more hours.  After all, many of the top players spend 50% of their time in study.  I'm not quite ready to pull the trigger on that yet, because I really do need to get my bankroll up high enough to make a contribution to the family finances.  I'm a long-term thinker, but as my wife often reminds me, in the short term, the bills still have to be paid.