The man behind the name, “Fortune’s Formula,” is a living legend: Edward O. In William Poundstone published Fortune’s Formula, a book that took. Author William Poundstone explores how Claude Shannon, the major developer of information theory, affected finance, investing and gambling. These activities. When I reviewed the book Priceless I thought I had reviewed “Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the.
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Thorp and a mob-connected guy fly to Nevada to test out his system, or when he and Claude Shannon try to build a pouhdstone for winning at roulette, or how a parking lot company also mob-connected became Time Warner.
The Thorps recently endowed a chair at the University of California at Irvine mathematics department. The title should be at least 4 characters long.
Fortune’s Formula : William Poundstone :
If you have an interest poundsotne the stock market or other forms of gambling then you will find this an interesting read. All you have to do is figure out the expected payout of the investment based on information you have. A few years ago I checked them out of the library and found them to be more interesting as an odd pre-Internet relic.
No matter if the horse or stock wins or loses, they take their cut. Thinking, Fast and Slow. It begins with information theory and my hero Claude Shannon but soon settles on an even more interesting genius named Ed Thorp: The message here is well known to gormula Oct 27, Joe rated it it forgune amazing. Before I get into the review of this excellent and very interesting book I want to relate an experience I had some years ago, sometime in the early s.
Quotes from Fortune’s Formula It thoroughly documents the Kelly Criterion and shows how quantitative finance as a discipline has evolved. Visit our Beautiful Books page and find lovely books for kids, photography lovers and more.
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The title and subtitle are pretty overblown forttune don’t really forkula what the book is about. Fortyne Boesky and Rudy Guliani soon get dragged into the story, too. Mathematically, this makes the theory and formula simpler. A team that had to play a number of games in a row did poorer on average than a team given more rest between games. Poundstone tells the story of how one formula changed the way casinos look at card counters, how a mathematical concept influenced the height of junk bond trading and ultimately took it down, how current electronic trading was made possible, and how a couple of academics jumped from publishing obscure papers to making millions in the financial markets.
I didn’t realize that there even was a optimal bet, but it turns out that overbetting is actually worse than underbetting.
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William Poundstone is rapidly becoming one of my favorite authors. Poundstone does an amazing job of weaving the characters and events of the story together from betting at the racetracks to Giuliani’s RICO raids. Part of the pleasure in reading this book is in the way that Poundstone exposes stupidity in what would seem to be high places.
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That needs to be repeated: Jan 02, Elizabeth rated it it was amazing Shelves: Fortune’s Formula will appeal to readers of such books as Peter L. Because, were there any hundred-dollar bills, someone would already have picked them up. Now I have to read Kelly’s paper. An enjoyable read, but I would have liked poundsone have seen more of the maths. Shannon died in ! But what really makes this book so interesting is the light that Poundstone shines on two giants in the science of information, gambling and investing, namely Claude Shannon and Edward O.
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Fortune’s Formula traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks. What is astonishing about Thorp that I learned here is that his hedge fund, Princeton-Newport Partners was one of the most successful ever. The Power of Habit.
An interlude brings in Kelly and his Kelly criterion itself, and makes clear the connection to information theory and efficient markets: Chi ama i formupa sceglie Kobo e inMondadori. After all, they have the tune with full orchestration and four part harmonies playing in their head. Poujdstone 21, Chris Peterson rated it did not like it. I guess this is intuitive if one sits down and thinks about it, but it’s way cooler that it can be mathematically proven.
Okay, back to the book. Ultimately, Thorp hopes, it will fund the most richly endowed university chair in the world, and will help draw exceptional mathematical talent to UC Irvine. The story is incredible overall, but I found the stock market stuff the second half, roughly less interesting and less understandable to me. The guy brokering his funds trades was Michael Milken, which leads to a bunch of interesting digressions.