Back a few years ago when Amarillo Slim was running the Super Bowl of Poker, some excellent players gathered to exchange pleasantries, lies, and chips. They also ran into a few good local players in Reno and Lake Tahoe, and the same when the tournament moved to Vegas. During that time there was a fellow who played the medium no-limit hold'em games named Dangerous Dave.
Now Dave never was much for taking chances. This guy was afraid to cross the street or talk back to his wife, but he was a friendly sort. Slim put it best when he described his style of play by saying, 'that old boy plays tighter than a nun's hoo-ha'.
When Dave raised preflop, it was like Moses parting the Red Sea as players fell by the wayside - quick, leaving a path for him to scoop the pot. The only problem was that the pots were always tiny. To make matters worse, Dave insisted on buying-in for as little as possible. If we were playing $10/$25 blinds NL and the average stack was $5,000, then Dave wanted to buy in for $500. You'd have thought he just walked through a mile of cactus with his boots off to get that short buy-in, but that well of money in his pocket never seemed to go dry.
Sometimes it takes a lot of patience to beat a player like Dangerous. You know what he's holding most of the time, and his range of hands is so small that once the flop hits you know just where you stand, but that didn't keep me from getting thumped-on holding second best on occasion. Fortunately for me, Amarillo Slim has never been shy about speaking his mind, and in a moment of charity (or pity, perhaps) he leaned over my shoulder and said, 'Son, you don't have to beat that man to make money in this game.'
After that I pretty much stopped giving any action to the small stacks (like Dave's), giving up the occasional small edge when I knew the best I was getting in return was even money. I also concentrated on assessing just where Dave was with his raises, and I used his tight image to chase other players out (who had already called) with a reraise. To my benefit, Dave often folded when the it got back to him, and over time I learned how to use a large stack of chips to my advantage.
Dave never did change. He just kept on making his standard raises with big pocket pairs and raking the antes while getting ground down to just a few hundred before finally getting some action and winning a main pot of $600 while the second-best hand knocked down $2,000 from the side pot.
In Barry Greenstein's book, Ace on the River, he has a chapter on money management that lists several reasons to play from a short stack. For the casual reader, these may seem intriguing, but again, they deal mostly with money management, not with making the most money. The only reasonable idea presented from a mathematical standpoint (with regard to expected return on investment and a limitation on element of ruin) has to do with pot-limit and no-limit games. In this case, Barry writes, "There is a mathematical edge when you have fewer chips than are needed to call all bets, since you can't be driven out of a hand when you are all-in."
I would add to this that I've watched some players who are geniuses with short stacks. The best of them protect their bankrolls by taking long-shot draws only with short stacks. They also entice calls with excellent hands when other players figure they can't get hurt too badly against a guy with only a few chips left, but at the same time are able to steal small pots and blinds with all-in bets (and weaker hands) that are too large to call randomly when a player can't get any odds to back up their call.
Even though I'm occasionally seen hunkered-down, protecting my small stack like a prisoner protecting his dinner from a room full of bigger, hungrier cons, I can't advocate small buy-ins as a standard way of life. The reason is that overall, most players on short-stacks just blind away until they get a decent hand, and then can't make anything on the hand because they run out of chips too soon - and again, the second place hand often wins more from the side pot than the short stack does from the main pot.
If you want to get paid-off on your good hands, you want that stack to be large enough that when you finally manage to double or even triple-up, it puts you well ahead for the night. There are plenty of times when a single pot makes the bulk of your win for an evening of poker, and there is no sense in severely limiting your possible return. About large buy-ins, Greenstein writes, "use your chips as a tool for making better plays than your opponents." You simply can't make a lot of moves with a short stack.
If you can't afford a decent buy-in, you probably shouldn't be in the game in the first place. If this is the case, do what Ray Zee advocates and "find a lower-limit game you can exploit and set-up camp." When your bankroll can handle it, then take a shot at a bigger game, but give yourself a chance to win some money when you get there!
Ed Note: Go ahead, take a shot at a bigger game at Pokerroom.com