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Kelly Can't Fail

(win-vector.com)
389 points jmount | 1 comments | 19 Dec 24 23:07 UTC | HN request time: 0s | source
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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

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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.
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fragmede ◴[20 Dec 24 03:28 UTC] No.42468021[source]▶
Is the lesson: choose to be born to wealthy parents?
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darkerside ◴[20 Dec 24 04:07 UTC] No.42468201[source]▶
Or is it to choose appropriate betting amounts based on your capacity for risk
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User23 ◴[20 Dec 24 05:06 UTC] No.42468428[source]▶
The lesson I'm taking away is "learn math and how to use it."
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1. paulluuk ◴[20 Dec 24 11:23 UTC] No.42470196[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.