Poker Question

I was in a freeroll tournament and there was only 2 tables to finish the tournament.
I was the player with fewer chips on the table .
Started hand I was the BB and was in AA , I increased the bet and only the button went .
The flop came A 6 5 , the button moved all -in. I paid .He had 4 8 . The two cards turned ( 7 J) and he has completed a sequence from 4 to 8 .
I lost the tournament and stayed in 18th.
I was correct in have gone all-in ?

http://i59.tinypic.com/25fm3uv.png

Source.

 

No, you should always fold AA (the best hand in poker)!

Come on Gabriel, what are your options, don't you want to be up against an inside draw with only two cards to come and him with 4 outs?

 

There is no folding there on the flop