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> The author here is trying to make a point about EV. This is only the first of their two points (summarised at the top and bottom). The second section "Poor
by statstutor 6y ago
> The author here is trying to make a point about EV.
This is only the first of their two points (summarised at the top and bottom).
The second section "Poor Bet Sizing" covers what you are trying to say.
They make the second point that even if you have positive EV, the size of your bet is relevant - and the Kelly Criterion can help you decide how much to stake.
The larger your bankroll, the more volatility you can stomach [the smaller your bankroll, the more "good bets" are still a personal risk] - you are agreeing with their second point, that you should think like a professional gambler.
- dalbasal 6y agoNot quite. Appropriate bet sizing is related to volatility, but that doesn't make it the same. This is what I meant by imprecise definitions. Sure, two small bets are technically less volatile than one. I think this is a tricky road to walk. Whether its a diy version of modern portfolio theory, or a day trader's take on martingale system... EV doesn't matter if you're not trying getting market returns. If you very investment is a speculation, a risk. IDK what you mean specifically by "professional gambler," but most pro poker players are staked by others. That basically makes a martingale strategy viable... not unlike a "two and twenty" wall street trading firm. "Professional" in both gambling and finance are positions, not skillsets. A professional investor invests other people's money. Same with pro gamblers, generally