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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.
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Previews available in: English
Subjects
gaming, investing, casinos, gambling, hedge funds, trade sizing, bet sizing, History, Mathematical modelsPeople
Edward Thorpe, John Kelly Jr., Claude ShannonPlaces
Reno, Los Vagas, New York CityTimes
1950-2016Edition | Availability |
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1
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
Jun 01, 2010, Hill and Wang
digital
0374707081 9780374707088
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2
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
September 19, 2006, Hill and Wang
Paperback
in English
0809045990 9780809045990
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zzzz
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3
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
August 25, 2005, Hill and Wang
Hardcover
in English
0809046377 9780809046379
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aaaa
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Book Details
First Sentence
"THE STORY STARTS with a corrupt telegraph operator."
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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%.
Community Reviews (0)
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 |