Ed Thorp Tag Archive

Ed Thorp on Kelly Criterion

(Excerpt from A Man for All Markets by Ed Thorp) Kelly’s criterion is not limited to two-value payoffs but applies generally to any gambling or investing situation in which the probabilities are known or can be...

Investing, Kelly Criterion, Nonlinearity Read More

4 ways to beat the market according to Ed Thorp

(Extracted from A Man for All Markets by Ed Thorp) Our portrait of real markets tells us what it takes to beat the market. Any of these can do it: 1. Get good information early. How do you know if your information...

Investing Read More

Stock market is not Gaussian

(Extracted from A Man for All Markets by Ed Thorp) The defect of VaR alone is that it doesn’t fully account for the worst 5 percent of expected cases. But these extreme events are where ruin is to be found. It’s...

Investing, Nonlinearity Read More