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Shannon and MIT mathematician Edward O. Thorp took the "Kelly formula" to Las Vegas. It worked. They realized that there was even more money to be made in the stock market. Thorp used the Kelly system with his phenomenally successful hedge fund, Princeton-Newport Partners. Shannon became a successful investor, too, topping even Warren Buffett's rate of return. Fortune's Formula traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks. It reveals the dark side of this alluring scheme, which is founded on exploiting an insider's edge.
Shannon believed it was possible for a smart investor to beat the market - and Fortune's Formula will convince you that he was right.
PLEASE NOTE: When you purchase this title, the accompanying reference material will be available in your Library section along with the audio.
Customer ReviewsMost Helpful
By Michael on 11-08-17
Could be MUCH shorter
Oddly the narrator repeatedly refers to the accompanying PDF which I could not find. I emailed support about this.
Nevertheless this was a fine book describing the Kelly formula for investment/betting decisions. This remarkably simple formula is powerful, widely applicable, and easy to understand. In fact, it is so easy to understand most of this book is unnecessary to understanding the formula. Much of the book is very mildly interesting stories about shady bookies and investment managers that have little, or nothing, to do with the Kelly Formula along with various other investment/betting strategies having nothing to do with the Kelly Formula.
I was not impressed with the presentation of the St. Petersburg Paradox. It is well described, but the underlying reason for the paradox seems to be completely missed. This is important because the book later discusses the differences between using the arithmetic verse geometric means. The important take away from the St. Petersburg Paradox is that any mean is worthless if the variance is too large. This variance problem is touched on elsewhere in the book, but it is not appropriately highlighted.
The narration is really excellent.
I enjoyed this book but it would have been better if much more focused on simply understanding the Kelly Formula.
5 of 5 people found this review helpful