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    Kelly Can't Fail

    (win-vector.com)
    389 points jmount | 13 comments | 19 Dec 24 23:07 UTC | HN request time: 0.867s | source | bottom
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    pcthrowaway ◴[20 Dec 24 02:34 UTC] No.42467756[source]▶
    Note that you need to be able to infinitely divide your stake for this to work out for you all the time.

    For example, if the deck has 26 red cards on top, you'd end up dwindling your initial $1.00 stake to 0.000000134 before riding it back up to 9.08

    replies(7): >>42467772 #>>42467915 #>>42468365 #>>42468411 #>>42470747 #>>42471103 #>>42480391 #
    boothby ◴[20 Dec 24 03:06 UTC] No.42467915[source]▶
    If you start out with a $1e12 stake, you're able to avoid catastrophic rounding errors even in the worst case. There's probably a life lesson here.
    replies(4): >>42468021 #>>42468417 #>>42476001 #>>42481435 #
    1. fragmede ◴[20 Dec 24 03:28 UTC] No.42468021[source]▶
    Is the lesson: choose to be born to wealthy parents?
    replies(5): >>42468201 #>>42470075 #>>42472103 #>>42472397 #>>42477212 #
    2. darkerside ◴[20 Dec 24 04:07 UTC] No.42468201[source]▶
    Or is it to choose appropriate betting amounts based on your capacity for risk
    replies(4): >>42468290 #>>42468373 #>>42468428 #>>42471607 #
    3. Onavo ◴[20 Dec 24 04:29 UTC] No.42468290[source]▶
    IEEE-754 isn't precise enough for my capacity :( I too need rich parents.
    4. laidoffamazon ◴[20 Dec 24 04:49 UTC] No.42468373[source]▶
    I guess it then does follow that having rich parents does expand your capacity for risk!
    replies(1): >>42474092 #
    5. User23 ◴[20 Dec 24 05:06 UTC] No.42468428[source]▶
    The lesson I'm taking away is "learn math and how to use it."
    replies(2): >>42469515 #>>42470196 #
    6. barrenko ◴[20 Dec 24 09:32 UTC] No.42469515{3}[source]▶
    Learn math and discover poignantly all the situations where it is effectively useless.
    7. croes ◴[20 Dec 24 11:04 UTC] No.42470075[source]▶
    It’s easier to make money if you already habe money
    8. paulluuk ◴[20 Dec 24 11:23 UTC] No.42470196{3}[source]▶
    Applying math to a more practical betting situation, like poker, is a lot harder. You'd have to be able to calculate your exact odds of winning given only a small amount of information, without a calculator and without it taking so long that the other players notice, and then also factor in the odds that the other players are bluffing and the advantages that you might have from (not) bluffing.
    9. Etheryte ◴[20 Dec 24 14:59 UTC] No.42471607[source]▶
    Or is it to choose appropriate betting amounts based on your parents?
    10. mannykannot ◴[20 Dec 24 15:49 UTC] No.42472103[source]▶
    It would really help if your parents know someone who can and will take the other side in this game.
    11. renewiltord ◴[20 Dec 24 16:20 UTC] No.42472397[source]▶
    A popular view is that having wealthy parents gives one a great advantage. Another popular view is that working extraordinarily hard for money is a waste of one’s life even if one gets the money. But the two are only consistent if one believes that one’s own life is the optimization target. If I live a life of misery so that my children live a life of prosperity that would strike me as a phenomenal result.

    So another reading is “choose to give your children wealthy parents”.

    12. darkerside ◴[20 Dec 24 19:26 UTC] No.42474092{3}[source]▶
    This is a truism
    13. Rastonbury ◴[21 Dec 24 03:01 UTC] No.42477212[source]▶
    Practically if you live life fearing a 26 red cards event something like e-15, you'd never leave the house and leave your money under your bed