Bankroll Theory Revisited

After giving some thought to my previous post about bankroll management, I decided that it is foolish to rail against common bankroll management theory without offering something substantial to replace it. I had mentioned briefly about not having qualms about stepping down in limits as your bankroll begins to shrink. Before I get started, I should point out that no limit hold'em is my game of choice if that has not already been made clear. I would also like to draw a comparison to a couple of well-known online professionals (can't remember who specifically) who claimed that they got by with a "small" bankroll of 30 buy-ins for their respective game.

Once again, these people simply have nothing concrete to substantiate this arbitrary number. Suppose for example that they are referring to a $1/2 game with a maximum buy-in of $200. This so-called small bankroll would be a whopping $6,000! In my 3 1/2 year span as a professional, I can probably count the times that my bankroll exceeded $6,000 on one hand and it has never exceeded $10,000 for more than a day. With this "small" bankroll I have played as high as $20/40 limit and $5/10 no limit and yet have only had 3 losing months in a 43 month span.

So without digressing, let's get back to this $6,000 bankroll. This amount is grossly overinflated because at these limits it would take some horrendous play to lose 70% or $4200 of this bankroll. While it may be mathematically possible to run this bad, I find it far more probable that the person responsible for this train wreck is either playing poorly or is just plain terrible and should go back to delivering pizzas. In any case, no one seems to offer a point where you should step down. Perhaps even more dangerously, this hazy advice does not even take into consideration that you might have a considerable amount more than your original buy-in on one table, exposing you to considerably more risk and critically dangerous decisions. After, it is one thing to get all in with KK pre-flop when you have $150 at stake, but it is probably almost always incorrect to get all in with that same hand pre-flop when you have $400 at stake.

So here is how I do it at this same hypothetical $1/2 NL game. If I were to choose to buy in for the maximum (which I rarely do these days, by the way) I would only require that I at least over $2000 (10 full buy ins). Once I drop down to $1000, I will move down to $.50/1. If I continue playing poorly or getting poor results (it is far better to assume the former) I will drop down to $.25/.50 at $500 when I have exactly 10 full buy-ins for that game, etc. If you can see a pattern here, then you will realize that I can stretch this number down to the lowest possible stakes at a given online poker site, effectively stretching my bankroll to infinity.

This method is actually far more powerful than it at first appears. This only assumes that you are buying in for exactly the maximum and does not address the fact that you can choose to buy in anywhere from 20%-100% of this amount. Therefore, I can now stretch out this "tiny" bankroll to far greater proportions by buying in short! Assuming that I wanted to take a shot at a $2/4 NL game I could do this provided that I bought in for an amount between $80 and $200 with that same $2,000 bankroll, yet chose to leave if I had increased my stack to $300+ or so.

In fact, buying in short and playing like a nit is the best way to take a shot at a game at stakes that are foreign to you or a game that you have never played before. After all, the arguments in favor of buying in for the full amount are weak at best. Most players should never buy in for that amount, being that most players don't play particularly well and are under-rolled. The argument that I hear over and over again is that if the hero flops a set, they want to be able to break their opponent. Of course that would be nice but this situation happens very infrequently in a full stack vs. full stack scenario. The real truth is that when you are shorter than everyone else at the table, they are more likely to look you up lightly and you will be getting your money in with the best of it (and very often a HUGE favorite) far more often as long as you are playing significantly tighter than your opponents.

Lastly, it is simply a poker falsehood that you must have the maximum buy-in to have every single tool available at your disposal. The truth is that if you have roughly 60%-70% of the maximum in play, you pretty much have every tool necessary to maneuver in your chosen game. Sometimes this can be even more effective than having a larger stack because YOU will have the final say in a big river bluff, provided that you are first to act. If the action has been heavy, your last bet will probably put you all in for a roughly pot sized bet and you will have no fear of respite since all of your money will be in the middle, leaving your opponent completely helpless even if he strongly suspects that you are full of shit.

Now don't get me wrong here: the moral of the story is not to play with a short bankroll. Most players could not handle it but I have found through the school of hard knocks that I can make this happen. The moral is that you should never let some mathematical formula or anecdotal evidence prevent you from taking a shot at greatness. Spend what you can afford!