Kelly Criterion Quotes

“The best on horses you think will lose are a valuable "insurance policy." When rare disaster strikes, you'll be glad you had the insurance. 71

The exponential growth of wealth in the Kelly system is also a consequence of proportional betting. As the bankroll grows, make larger bets. 98

[2 questions are central to John Kelly's analysis] What level of risk will lead to the highest long-run return? What is the chance of losing everything? 286

As Fred Schwed, Jr. author of Where are the Customer's Yatchs? put it back in 1940, "Like all of life's rich emotional experiences, the full flavor of losing important money cannot be conveyed in literature." 304

Claude Shannon: A smart investor should understand where he has an edge and invest only in those opportunities. 308

The longer you hold a stock, the harder it is to beat the market by much. 316”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street