Fortune's Formula

The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

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  • 8 Have read

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  • 4.3 (6 ratings) ·
  • 66 Want to read
  • 1 Currently reading
  • 8 Have read

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Last edited by ImportBot
April 17, 2024 | History

Fortune's Formula

The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

  • 4.3 (6 ratings) ·
  • 66 Want to read
  • 1 Currently reading
  • 8 Have read

In 1956 two Bell Labs scientists discovered the formula for getting rich. One was mathematician Claude Shannon, neurotic father of our digital age; the other was John L. Kelly, Jr., a Texas-born, gun-toting physicist. Together they applied information theory--the basis of computers and the Internet--to the problem of making as much money as possible, as fast as possible. Shannon and MIT mathematician Edward O. Thorp took the "Kelly formula" to the tables of Las Vegas. It worked. They realized that there was even more money in the stock market, specifically in the risky trading known as arbitrage. Shannon became a successful investor, using his wealth to drop out of the scientific world. This book traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks.--From publisher description.

Publish Date
Publisher
Hill and Wang
Language
English
Pages
400

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Previews available in: English

Book Details


First Sentence

"THE STORY STARTS with a corrupt telegraph operator."

Classifications

Library of Congress
HV6710 .P68 2005, HV6710.P68 2005

The Physical Object

Format
Hardcover
Number of pages
400
Dimensions
9.3 x 6.2 x 1.2 inches
Weight
1.5 pounds

Edition Identifiers

Open Library
OL7974468M
Internet Archive
fortunesformulau00poun
ISBN 10
0809046377
ISBN 13
9780809046379
LCCN
2005005725
OCLC/WorldCat
58043309
Library Thing
83632
Goodreads
1155424

Work Identifiers

Work ID
OL118144W

Work Description

This book is about Kelly's criterion developed in 1956 by two scientists (John Kelly Jr. and Claude Shannon) at Bell Labs for the transmission of information over copper wires but who immediately realized its application to gaming and investing. Many more professional gamblers used the formula than investors. One investor Edward Thorpe used it both to beat the casino's and as a hedge fund manager to beat the market. THE FORMULA does not tell one how to find edge but once one does the formula indicates how much one should bet to maximize the creation of wealth. Be warned that the use of a full Kelly will result in much volatility in the size of one's trading account. Many use a 1/2 Kelly which decrease volatility by 90% but decreases the size of the account after a 1000 trades by only 25%.

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History

Download catalog record: RDF / JSON
April 17, 2024 Edited by ImportBot import existing book
July 15, 2019 Edited by MARC Bot import existing book
October 6, 2016 Edited by Richard Sposato better phrasing
October 6, 2016 Edited by Richard Sposato Edited without comment.
October 18, 2009 Created by WorkBot add works page