festinarazi: Variance and EV question

[festinarazi]

Sorry if this is a dumb question but that is why I am posting on the beginner's page. When reading posts on the main forum, I notice that when folks do computer simulations of various strategies, upwards of one billion hand might be simulated. That makes sense to me because one then eliminates the effects of variance and arrives at the long-term EV for that situation. How can I reconcile that with stories I read about the MIT teams, etc. who essentially "plunder" the casinos in a short time. I understand that variance can be decreased by team play and multiple hands, but I still don't understand how these big score stories that I often read about are truly "advantaged" and not just gambling in the short term. It would seem to me that the long-term would be much longer than hitting Vegas on weekends for six months. Hopefully, this is an appropriate question and I thank you for any comments in advance.

[Don Schlesinger]

The more you play, the smaller the variance becomes, expressed as a percentage of the e.v. That said, e.v. is e.v., and the fact that teams or individuals can not only win money in the long run but also in the short run is not such a big surprise. You're supposed to win!

It's just that, the longer you play, the more likely you are to win, and the longer you play, the less important variance becomes, on a percentage basis. That doesn't mean you won't or can't win in the short run.

Don

> Sorry if this is a dumb question but that is
> why I am posting on the beginner's page.
> When reading posts on the main forum, I
> notice that when folks do computer
> simulations of various strategies, upwards
> of one billion hand might be simulated. That
> makes sense to me because one then
> eliminates the effects of variance and
> arrives at the long-term EV for that
> situation. How can I reconcile that with
> stories I read about the MIT teams, etc. who
> essentially "plunder" the casinos
> in a short time. I understand that variance
> can be decreased by team play and multiple
> hands, but I still don't understand how
> these big score stories that I often read
> about are truly "advantaged" and
> not just gambling in the short term. It
> would seem to me that the long-term would be
> much longer than hitting Vegas on weekends
> for six months. Hopefully, this is an
> appropriate question and I thank you for any
> comments in advance.

[festinarazi]

Don,

Thanks for the response, coming from you I'm sure its correct. I guess where I was getting puzzled was probable with the ROR. Because it would seem that large bets, even at a positive EV, could in the short term lead to ruin. But obviously these sophisticated teams are backed by a bit more than I was thinking. I come from a horse racing background where bankroll management has always been under-appreciated.