Author Topic: Fortune's Formula - William Poundstone  (Read 7831 times)

Liberty

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« Last Edit: September 07, 2011, 11:09:23 PM by Parsad »
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berkshiremystery

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Re: Fortune's Formula - William Poundstone
« Reply #1 on: August 31, 2011, 10:05:05 PM »
There are currently only two major books about the Kelly Criterion on the market that I am aware of.




1) "Fortune's Formula"  by William Poundstone
2) "The Kelly Capital Growth Investment Criterion" by Leonard C. MacLean, Edward O. Thorp and William T. Ziemba



Fortune's Formula, written by William Poundstone is the easier read. The second book, "The Kelly Capital Growth Investment Criterion", that got just recently published is a much bigger workload to read. I would compare this duo of books with the twin sets of Graham's "The Intelligent Investor" and "Security Analysis". Whereby the "Intelligent Investor" is a easier read for the novice investor, and "Security Analysis" for the more advanced financial reader. The two available Kelly books should also be read in the same order, Poundstones book for the starter as an appetizer and William Ziemba's book as the main and advanced course.

Fortune's Formula - web site for the book
http://www.fortunesformula.com/


William Poundstone's - homepage
http://home.williampoundstone.net/
Kelly explained @ William Poundstone's  homepage
http://home.williampoundstone.net/Kelly/Kelly.html

William Poundstone's page @ Amazon
http://www.amazon.com/William-Poundstone/e/B000APFI2K/ref=ntt_athr_dp_pel_1
« Last Edit: September 05, 2011, 08:28:39 PM by berkshiremystery »

Liberty

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Re: Fortune's Formula - William Poundstone
« Reply #2 on: September 01, 2011, 07:24:32 AM »
I've been meaning to ask about the MacLean book. Do you think it's a good buy for someone without a math background? It's kind of expensive, and I'm a bit afraid of getting a math textbook that I mostly won't understand.

Security Analysis is indeed drier and more complex than Intelligent Investor, but I can understand it just fine. Is it the same with Kelly Capital Growth or is it a lot more like a statistical journal paper that is 800 pages long? Thanks.
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berkshiremystery

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Re: Fortune's Formula - William Poundstone
« Reply #3 on: September 05, 2011, 09:00:28 PM »
I've been meaning to ask about the MacLean book. Do you think it's a good buy for someone without a math background? It's kind of expensive, and I'm a bit afraid of getting a math textbook that I mostly won't understand.

Security Analysis is indeed drier and more complex than Intelligent Investor, but I can understand it just fine. Is it the same with Kelly Capital Growth or is it a lot more like a statistical journal paper that is 800 pages long? Thanks.

The book is probably half a statistical journal, with the other half of some interesting reads and a collection of anecdotes deeply researched for the pure Kelly nerd. So it depends on your point of view, if the glass is half full or empty. Yes, at least over half the book is occupied with pure math formulas, very dry, and the other pages enjoyable, so readers with non-mathematical backgrounds have to step dance through the pages. You have no other choice.

Here is an earlier version of their work from the year 2005 as a PDF file (63 pages), so you can get a feeling how the real updated book would look inside:

Hope this helps. Cheers!

Capital Growth: Theory and Practice
Leonard C. MacLean†and William T. Ziemba‡
September 29, 2005

http://stevanovichcenter.uchicago.edu/seminars/Handbook.pdf

For registered Amazon.com members there is also the free "Search Inside This Book" feature !
« Last Edit: September 05, 2011, 09:10:24 PM by berkshiremystery »

Chris DeMuth Jr

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Re: Fortune's Formula - William Poundstone
« Reply #4 on: August 31, 2013, 10:21:46 AM »
We use Kelly's formula for sizing investments and thought that this was an enjoyable and useful introduction to the basic concept and history -- http://seekingalpha.com/article/1146341-fortunes-formula-the-untold-story-of-the-scientific-betting-system-that-beat-the-casinos-and-wall-street.
Chris DeMuth, Jr.
 
Rangeley Capital

GrizzlyRock

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Re: Fortune's Formula - William Poundstone
« Reply #5 on: September 13, 2013, 04:39:04 PM »
There is a great discussion of exactly how to use the formula in the new market wizards.  See attached for a spreadsheet that let's you play with formulas and a portion of a Kelly Growth piece I wrote earlier this year.

Hey Chris - how do you use the formula?

Jurgis

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Re: Fortune's Formula - William Poundstone
« Reply #6 on: July 31, 2017, 09:19:26 PM »
I thought there was a newer thread about this... anyway, I thought this article fits the topic although it shows a different angle on how a player could win against casinos:

https://www.theatlantic.com/magazine/archive/2012/04/the-man-who-broke-atlantic-city/308900/
"Before you can be rich, you must be poor." - Nef Anyo

Liberty

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Re: Fortune's Formula - William Poundstone
« Reply #7 on: September 03, 2018, 08:15:54 AM »
"Most haystacks don't even have a needle." |  I'm on Twitter  | Interesting podcast on sleep science