4 ms·

> The only solution: eat the rich. The only? Maybe not bet 100% of your wealth every time? That's what Kelly criterion is about.

• eli_gottlieb 3y ago
  You have to have enough in the first place that trying to support yourself isn't betting 100% of your wealth.
  • sobriquet9 3y ago
    If you have nothing in your checking account, it does not mean your wealth is zero. In real life you can earn more money, in the given example you can't.
    • Timon3 3y ago
      In real life you can also have negative money. In real life you can live paycheck to paycheck. In real life you can have costs higher than your earnings.
      • sobriquet9 3y ago
        If you have no money to bet, the example is not applicable.
• coryfklein 3y ago
  Uh do you mean "bet 0% of your wealth every time"? Or does betting some number greater than 0% lead to net positive expected gains for an individual?
  • sobriquet9 3y ago
    Kelly criterion defines the optimum ratio.
    • rerdavies 3y ago
      The Kelly Criterion, in this case, suggests that the optimum bet size is ~25% of your wealth. Making 4 separate bets in each round with 25% of your wealth produces the following results: Investors: 100,000 Iterations: 100 Portfolio size: 4 Avg wealth: $130.041 Median wealth: $11.6259 Winners: 85,902 Investestors worth < $0.01: 119 Max wealth: $86,177.5 heads: 241 tails: 159