Freeroll... to Riches!

2008-04-16T13:48:00.001-07:00

To: Professor Partnoy

From: Alan Man

Date: April 16, 2008

Re: Grupo Mexico’s Worth

To figure out the value of Grupo Mexico using financial statements, I have will attempt to find the Net Present Value of its relevant cash flows. The first step is to determine which cash flows to discount and incorporate into the equation. Because it is a leveraged equity owner, we will also need to compute the project and equity cash flows.

Looking at the cash flow to financial debt and equity, I will extract the free cash flow from the financial statement. That is calculated by taking the earnings before interest and taxes (EBIT), and then adding back taxes and depreciation/amortization, subtracting any capital expenditures and increases in working capital. In 2006, Grupo Mexico had an EBITDA of roughly $3.6 billion. After all the subtractions and adding back DA and taxes, we get a cash flow of roughly $1.66 billion. That will be the operating cash flow. The financial statement also lists the cash flows after investments, with is $691 million. Taking the $691 million, and applying a cost of capital of 10% at a 5% growth rate, the perpetuity formula gives us a value of roughly $13.8 billion.

An EBITDA multiple may also be useful in evaluating the company’s worth. In my research, I found that the enterprise value multiple was usually around 4-5 times the EBITDA. By multiplying the EBITDA, which is $3.6 billion, by 5, the company would be worth about $14.4 billion, which is not far from the previous estimate of $14 billion.

Another way of calculating the enterprise value is by adding Grupo Mexico’s market capitilzation, preferred stock, and outstanding debt together and then subtracting out the cash and cash equivalents.

Using that formula, you get $3.97 + $3.5 + $2.06, which equals roughly $9.5 billion, after subtracting cash. This is obviously a more conservative estimate of the value of Grupo Mexico.

A sound bluff.

2007-09-14T14:18:00.000-07:00

I generally like to play suited connectors, for the potential of hitting it big in multiway pots. But, these drawing hands can put a leak in your stack if you don't know how to play them correctly. Too often you'll hit a very small part of the flop, and commit your chips to maybe 7-8 outs. It certainly takes a lot of discipline playing these cards, even at the 10NL level.

*** FLOP *** [7h 8d 9h]
blinkuldhc bets $0.30
Mo4MoMoney folds
richrod calls $0.30

On this hand, I led out pre-flop with a min raise. The flop was just ugly. I caught bottom pair, with bottom OESD (open ended straight draw) and obviously no kicker. Also, I caught no spade, so there went my chance of a spade draw. There were two other callers in the preflop, so I decided to stay aggressive and lead out with a 3BB bet to show some strength.

*** TURN *** [7h 8d 9h] [Kh]
blinkuldhc checks
richrod checks

The turn was a scary card, for me and my heads-up opponent. He didn't raise preflop, so he may have a king with a soft kicker, or maybe he still has 10-Q, 9-10, or any number of drawing hands. I decided to check since I was out of position, hoping that the card scared him as much as it scared me. Luckily, he checked and it gave me another street to catch a miracle card.

*** RIVER *** [7h 8d 9h Kh] [4c]
blinkuldhc checks
richrod bets $1
blinkuldhc has 15 seconds left to act
blinkuldhc raises to $2.80
richrod has 15 seconds left to act
richrod: fl?
richrod folds
Uncalled bet of $1.80 returned to blinkuldhc
blinkuldhc mucks
blinkuldhc wins the pot ($2.95)

The four of clubs was a very innocent card for each player. Either my player made his hand on the flop, or had nothing at all, given his 4th street play. I checked, just to see how he would play into the pot. I felt that $1 was a very suspicious raise into this board. Also, I had been showing strength on earlier streets, and it may have looked like a slow-play when I checked the turn (maybe I caught my hearts).

I decided to check raise him just to represent either a strong king or a flush. If you see his chat, it says "fl?" And I think my raise may have just signaled that. A big part of making a bluff work is not just trying to guess what the opponent has (I put him on something like 8-10, 9-10, 9-J), but rather the texture of the board. With three hearts, an over card, and a straight possibility on the board, it presents a lot of possibilities of what I could represent. Sometimes, being out of position can help you bluff. My turn check and my check raise on the river definitely represented a slow play of the flush. I know the pot was only for about $2-3, but I really like my play here.

Craziest .25/.50 hand ever!

2007-09-11T22:34:00.001-07:00

Full Tilt Poker Game #3537144451: Table Kris (6 max) - $0.25/$0.50 - Limit Hold'em - 1:31:28 ET - 2007/09/12
Seat 1: danielcordukes ($11.15)
Seat 2: boogirl1001 ($9.50)
Seat 3: bfr237 ($35.70)
Seat 4: domied26 ($6.95)
Seat 6: blinkuldhc ($22.55)
domied26 posts the small blind of $0.10
blinkuldhc posts the big blind of $0.25
The button is in seat #3
*** HOLE CARDS ***
Dealt to blinkuldhc [3c 3d]
danielcordukes calls $0.25
boogirl1001 raises to $0.50
bfr237 raises to $0.75
domied26 calls $0.65
blinkuldhc calls $0.50
danielcordukes calls $0.50
boogirl1001 raises to $1
bfr237 calls $0.25
domied26 calls $0.25
blinkuldhc calls $0.25
danielcordukes calls $0.25
*** FLOP *** [3s 8c 9h]
domied26 bets $0.25
blinkuldhc raises to $0.50
danielcordukes calls $0.50
boogirl1001 raises to $0.75
bfr237 raises to $1
domied26 calls $0.75
blinkuldhc calls $0.50
danielcordukes calls $0.50
boogirl1001 calls $0.25
*** TURN *** [3s 8c 9h] [5d]
domied26 bets $0.50
blinkuldhc calls $0.50
danielcordukes calls $0.50
boogirl1001 calls $0.50
bfr237 raises to $1
domied26 raises to $1.50
blinkuldhc calls $1
danielcordukes calls $1
boogirl1001 calls $1
bfr237 raises to $2
domied26 calls $0.50
blinkuldhc calls $0.50
danielcordukes calls $0.50
YoYoMa13 sits down
boogirl1001 calls $0.50
*** RIVER *** [3s 8c 9h 5d] [Kd]
domied26 bets $0.50
blinkuldhc calls $0.50
YoYoMa13 adds $15
danielcordukes has 15 seconds left to act
danielcordukes folds
boogirl1001 calls $0.50
bfr237 calls $0.50
*** SHOW DOWN ***
domied26 shows [Tc 9c] a pair of Nines
blinkuldhc shows [3c 3d] three of a kind, Threes
boogirl1001 mucks
bfr237 shows [Ad 9d] a pair of Nines
blinkuldhc wins the pot ($21.50) with three of a kind, Threes
*** SUMMARY ***
Total pot $22 | Rake $0.50
Board: [3s 8c 9h 5d Kd]
Seat 1: danielcordukes folded on the River
Seat 2: boogirl1001 mucked [Ah As] - a pair of Aces
Seat 3: bfr237 (button) showed [Ad 9d] and lost with a pair of Nines
Seat 4: domied26 (small blind) showed [Tc 9c] and lost with a pair of Nines
Seat 6: blinkuldhc (big blind) showed [3c 3d] and won ($21.50) with three of a kind, Threes

Tournament play, no need for words for this one.

2007-09-11T00:53:00.000-07:00

Full Tilt Poker Game #3527721045: $5 + $0.50 Tournament (26863709), Table 1 - 300/600 - Pot Limit Hold'em - 3:48:09 ET - 2007/09/11
Seat 1: jumbojim13 (8,022)
Seat 2: stormswa (7,145)
Seat 3: blinkuldhc (10,754)
Seat 4: andola (10,015)
Seat 7: btlvtd (22,611)
blinkuldhc posts the small blind of 300
andola posts the big blind of 600
The button is in seat #2
*** HOLE CARDS ***
Dealt to blinkuldhc [Ac As]
btlvtd folds
jumbojim13 raises to 2,100
stormswa folds
blinkuldhc raises to 6,900
andola folds
stormswa: wow
jumbojim13 calls 4,800
*** FLOP *** [7c 5c 4s]
blinkuldhc bets 3,854, and is all in
jumbojim13 calls 1,122, and is all in
blinkuldhc shows [Ac As]
jumbojim13 shows [Qd Kd]
Uncalled bet of 2,732 returned to blinkuldhc
*** TURN *** [7c 5c 4s] [Kh]
*** RIVER *** [7c 5c 4s Kh] [Kc]
blinkuldhc shows two pair, Aces and Kings
jumbojim13 shows three of a kind, Kings
jumbojim13 wins the pot (16,644) with three of a kind, Kings
andola: lol
*** SUMMARY ***
Total pot 16,644 | Rake 0
Board: [7c 5c 4s Kh Kc]
Seat 1: jumbojim13 showed [Qd Kd] and won (16,644) with three of a kind, Kings
Seat 2: stormswa (button) didn't bet (folded)
Seat 3: blinkuldhc (small blind) showed [Ac As] and lost with two pair, Aces and Kings
Seat 4: andola (big blind) folded before the Flop
Seat 7: btlvtd didn't bet (folded)

I swear I'm playing solid, too!

2007-09-09T23:57:00.000-07:00

Sometimes, you get lucky.

Full Tilt Poker Game #3517386906: Table Renaissance - $0.05/$0.10 - No Limit Hold'em - 2:49:04 ET - 2007/09/10
Seat 4: Joe Ali ($4.65)
Seat 5: blinkuldhc ($33.70)
Seat 7: billover69 ($4)
Seat 9: Real Sweaty ($9.80)
Real Sweaty posts the small blind of $0.05
Joe Ali posts the big blind of $0.10
The button is in seat #6
*** HOLE CARDS ***
Dealt to blinkuldhc [Js Jd]
blinkuldhc raises to $0.35
Real Sweaty folds
Joe Ali raises to $4.65, and is all in
blinkuldhc calls $4.30
Joe Ali shows [9s Ad]
blinkuldhc shows [Js Jd]
*** FLOP *** [3s 3h Ac]
*** TURN *** [3s 3h Ac] [Jh]
*** RIVER *** [3s 3h Ac Jh] [9d]
Joe Ali shows two pair, Aces and Nines
blinkuldhc shows a full house, Jacks full of Threes
blinkuldhc wins the pot ($8.85) with a full house, Jacks full of Threes
Joe Ali is sitting out
*** SUMMARY ***
Total pot $9.35 | Rake $0.50
Board: [3s 3h Ac Jh 9d]
Seat 4: Joe Ali (big blind) showed [9s Ad] and lost with two pair, Aces and Nines
Seat 5: blinkuldhc showed [Js Jd] and won ($8.85) with a full house, Jacks full of Threes
Seat 7: billover69 is sitting out
Seat 9: Real Sweaty (small blind) folded before the Flop

Ouch, but that guy had no business going in with A-9 off. Anyway, I've had some pretty good micro NLH sessions. I think I'm probably around 5BB/100, which is about 50 cents... haha. Yeah, I know it would be more economically efficient to be working at a job to build a bankroll, but this is just so much fun.

BTW, at the micro stakes, there are so many loose/bad players, obviously. It's kind of like jee jit su or judo, where you use your enemy's aggressiveness against him. So far... it's worked out alright.

Ahead...behind...ahead...

2007-09-08T15:50:00.000-07:00

We all pray to the poker River Gods one time or another. It doesn't matter if you're playing microstakes or HSP. Well, it worked here.....

Seat 2: AMNGBLOC ($4.10)
Seat 3: Cliodhna ($11.05)
Seat 4: ManiacHigh ($8.30)
Seat 5: ctcollins ($14.10)
Seat 6: blinkuldhc ($8.50)
Cliodhna posts the small blind of $0.05
mack2000 adds $4
ManiacHigh posts the big blind of $0.10
The button is in seat #2
*** HOLE CARDS ***
Dealt to blinkuldhc [Qc Ad]
ctcollins folds
blinkuldhc raises to $0.30
AMNGBLOC folds
Cliodhna folds
ManiacHigh raises to $0.50
blinkuldhc calls $0.20
*** FLOP *** [Tc 7s Ah]
ManiacHigh bets $1.05
blinkuldhc calls $1.05
*** TURN *** [Tc 7s Ah] [Ac]
ManiacHigh bets $3.15
blinkuldhc raises to $6.95, and is all in
ManiacHigh calls $3.60, and is all in
blinkuldhc shows [Qc Ad]
ManiacHigh shows [As Ts]
Uncalled bet of $0.20 returned to blinkuldhc
*** RIVER *** [Tc 7s Ah Ac] [Qd]
blinkuldhc shows a full house, Aces full of Queens
ManiacHigh shows a full house, Aces full of Tens
blinkuldhc wins the pot ($15.65) with a full house, Aces full of Queens
ManiacHigh is sitting out
*** SUMMARY ***
Total pot $16.65 | Rake $1
Board: [Tc 7s Ah Ac Qd]
Seat 2: AMNGBLOC (button) didn't bet (folded)
Seat 3: Cliodhna (small blind) folded before the Flop
Seat 4: ManiacHigh (big blind) showed [As Ts] and lost with a full house, Aces full of Tens
Seat 5: ctcollins didn't bet (folded)
Seat 6: blinkuldhc showed [Qc Ad] and won ($15.65) with a full house, Aces full of Queens

Off to a good start

2007-09-08T03:27:00.000-07:00

So, I'm technically on day four of my journey to $100,000. I have been playing the .25/.50 limit hold-em and .05/.10 no-limit. These are the lowest limits I have ever played in my life, since I've only been exposed to casino games, such as $2-4 limit and $1-3 no limit.

I must say, there are some LOOSE players down at this level. What I've learned from this, and about myself, is that I have to be patient. It's easy to get caught up in the looseness of the games, and start playing marginal hands such as A-8 offsuit out of position and 5-7 suited. I think the best strategy is to play like a "rock," i.e. play premium hands and play them aggressively.

So far, so good. I'm up from $45 to $95 ish. I've caught a few breaks, but I've also been sucked out too. One hand in particular was pretty disconcerting. I opened in a .05/.10 NLHE game from under the gun with a raise to .45. I got called by the button, with fold all around. The flop came A-K-7, all diamonds. With about a dollar in the pot, I bet .60, got raised all-in by the button, and called for about $9 total. So, the pot had about $20, which is a freaking ginormous (sorry) amount in 10 cent blinds. I flipped over my dominant top two (although fearing that my opponent had a flush), and he flipped over A-3 of spades!! The turn came an 8 of diamonds, which meant that there were about 30 out of 40 remaining cards that would win me the pot.

Of course, a 3 of diamonds fell...giving a split pot to each of us. I guess it's not technically a bad beat, since no one got beat. However, it really did feel like kissing my sister...if I had a really ugly, disgusting version of a sister.

Anyways, I continue my journey...

First step: Get money

2007-09-06T00:23:00.000-07:00

So, I just deposited my first $45 into Full Tilt. I feel kind of disgusting, since I have never, ever deposited money into an online gambling site. I feel like a degenerate already (zero offense to anyone who actually plays online). However, I do have a sense of optimism, and I crave this new challenging opportunity to do something that few people ever do... turn little money into life-sustaining money.

I first got this idea after reading a few posts on 2+2 (a poker message board). I found out that a few players, including Brian Townsend, were able to turn a small amount of money into a very lucrative form of livelihood. My first goal is to get to $300 (from $45) safely, playing (yuck) .25/.50 limit hold-em and .05/.10 no-limit hold-em. I know that this violates THE CONSTITUTION written on the blog, but I have no choice but to take this risky approach.

By getting to $300, I can safely move up to .50/1.00 limit hold-em. The next step after that? Hopefully $600, so I can start playing some 1/2 limit hold-em.

I have always been a tight-agressive poker player, but then again, I think everyone likes to view themselves in that way. I do have a tendency to tilt off money, and that is definitely a leak in my game. However, I think if I can keep a level head, and perhaps catch a few breaks, I should be able to reach my immediate goal of $300. Hopefully I'll be able to stay away from hands like Q-10 suited, A-9 offsuit, and the like. Here goes nothing....