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Well Claude Shannon and Ed Thorpe did figure out how to beat roullette. And BlackJack. And then Thorpe figured out Black Scholes and made a killing in the marke

• gbronner 7y ago
  See also the Eudaemonic Pie
• kasey_junk 7y ago
  I don’t have a dog in this fight but Ed Thorpe has one of his funds liquidated via RICO. He’s usually used as an example in the positive case for “only bad behavior gets outsized market returns” argument. Scholes & Merton got famously wrecked in the markets.
  • bob_theslob646 7y ago
    This is the perfect example of broken telephone. (If you don't know the full story and fail to post any source) The reason why they got the RICO. "From 1969 to the end of 1987 the amount invested rose from $1.4 million to $273 million. Its limited partners saw their wealth grow at 18.2 percent annualized after fees. PNP had no losing years — and not even a losing quarter." The regulators thought that it was a Ponzi scheme based off that information or did they... "But most knowledgeable observers believed that the charges — filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act — were also intended to get the Princeton Newport principals to testify against Michael Milken, the controversial “junk bond” trader who had upended Wall Street conventions and who had dealings with PNP." The regulators thought that it was a Ponzi scheme, when in reality, they mastered the tax code and created losses via hedging, which was legal at the time. "The resulting charges were related to trades that PNP had made to create losses that would offset corresponding gains that arose during the firm’s hedging maneuvers." "The Princeton Newport attorney, Theodore Wells, a Harvard Law and Harvard Business School alumnus known for high-profile white collar criminal defense, argued that the trades were allowed under IRS regulations. They even had a former IRS commissioner, Donald Alexander, prepared to testify in their defense. The judge would not permit it." >I don’t have a dog in this fight but Ed Thorpe has one of his funds liquidated via RICO. First off, his name is Edward O. Thorp https://g.co/kgs/jfpjL1 https://g.co/kgs/jfpjL1 not "Thorpe" >Ed Thorpe has one of his funds liquidated via RICO. Please post a source because almost all of the charges were overturned. "Ed Thorp, who was not greatly affected by the criminal charges, was able to restart his hedge fund activity. In 2012 Thorp’s net worth was estimated at $800 million." All of this information came from this source. https://communitynews.org/2017/02/28/from-fat-cat-to-racketeer-jay-regan-says-no-way/ https://communitynews.org/2017/02/28/from-fat-cat-to-rackete...