By William Poundstone

ISBN-10: 0809046377

ISBN-13: 9780809046379

In 1956 Bell Labs scientists chanced on the medical formulation for purchasing wealthy. One used to be mathematician Claude Shannon, neurotic father of our electronic age, whose genius is ranked with Einstein’s. the opposite was once John L. Kelly Jr., a Texas-born, gun-toting physicist. jointly they utilized the technological know-how of knowledge theory—the foundation of pcs and the Internet—to the matter of constructing as a lot funds as attainable, as speedy as possible.

Shannon and MIT mathematician Edward O. Thorp took the “Kelly formula” to Las Vegas. It labored. They discovered that there has been much more funds to be made within the inventory marketplace. Thorp used the Kelly approach together with his phenomenonally profitable hedge fund, Princeton-Newport companions. Shannon turned a profitable investor, too, topping even Warren Buffett’s expense of go back. *Fortune’s formulation *traces how the Kelly formulation sparked controversy* *even because it made fortunes at racetracks, casinos, and trading* *desks. It unearths the darkish part of this attractive scheme, which is* *founded on exploiting an insider’s edge.

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Shannon believed it used to be attainable for a sensible investor to beat<I> the market—and *Fortune’s formulation *will persuade you that he used to be correct. **William Poundstone** is the bestselling writer of 9 nonfiction books, together with *Labyrinths of cause *and *The Recursive Universe*. In 1956 Bell Labs scientists stumbled on the medical formulation for buying wealthy. One used to be mathematician Claude Shannon, neurotic father of our electronic age, whose genius is ranked with Einstein's. the opposite used to be John L. Kelly Jr., a Texas-born, gun-toting physicist. jointly they utilized the technology of knowledge theory—the foundation of pcs and the Internet—to the matter of constructing as a lot funds as attainable, as speedy as possible.

Shannon and MIT mathematician Edward O. Thorp took the "Kelly formula" to Las Vegas. It labored. They learned that there has been much more funds to be made within the inventory marketplace. Thorp used the Kelly procedure along with his phenomenonally profitable hedge fund, Princeton-Newport companions. Shannon grew to become a profitable investor, too, topping even Warren Buffett's cost of go back. *Fortune's formulation *traces how the Kelly formulation sparked controversy* *even because it made fortunes at racetracks, casinos, and trading* *desks. It finds the darkish part of this fascinating scheme, which is* *founded on exploiting an insider's edge.

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Shannon believed it was once attainable for a wise investor to beat<I> the market—and *Fortune's formulation *will persuade you that he was once correct. "*Fortune's formulation *may be the world's first heritage booklet, playing primer, arithmetic textual content, economics handbook, own finance consultant and comic story publication in one quantity. Poundstone comes throughout because the top university professor you ever hand, an individual who can flip virtually any technical subject into an interesting and zesty lecture."—**The big apple instances ebook Review** "*Fortune's formulation *may be the world's first heritage booklet, playing primer, arithmetic textual content, economics guide, own finance consultant and funny story booklet in one quantity. Poundstone comes throughout because the most sensible university professor you ever hand, an individual who can flip nearly any technical subject into an pleasing and zesty lecture."—**The ny instances ebook Review** "Seldom have actual crime and shrewdpermanent math been combined jointly so engagingly"—**The Wall road Journal**

"An striking tale that provides an important notion the wanted celebrity remedy . . . *Fortune's Formula* will entice readers of such books as Peter L. Bernstein's *Against the Gods*, Nassim Nicholas Taleb's *Fooled by way of Randomness*, and Roger Lowenstein's *When Genius Failed*. All attempt to clarify why clever humans take silly hazards. Poundstone is going them one higher by way of displaying how hedge fund long term Capital administration, for one, may have shunned catastrophe through following the Kelly method."—*Business Week* "Poundstone, a two-time Pulitzer Prize nominee, takes us from chalkboard to inventory marketplace and again as he explains the 'Kelly formula' for playing throughout the lives of these who built and exploited the method. it's a rollicking story approximately cash, arithmetic and greed."—**Bloomberg** "A spectacular array of math geniuses, rogues, swindlers, Nobel Prize winners, gun-toting physicists—all massaging the formulation that provide them an part in growing fortunes."—**George J. W. Goodman (aka "Adam Smith"), writer of ***The cash video game and Supermoney* "This is an excellent story of ways arithmetic acquired married to playing and went off to honeymoon in Las Vegas, prior to discovering final happiness within the greatest on line casino of all—the global monetary markets. Poundstone has produced a rogues' gallery of mobsters and mathematicians, kneecappers and handicappers, card sharps, professors, platforms gamers, numbers runners, and quantity crunchers—the most sensible 'investment advisers' you'll find. someone drawn to taking part in the markets should purchase this publication and browse it immediately."—**Thomas A. Bass, writer of ***The Eudaemonic Pie* and *The Predictors* "The actual tale of the intertwining lives of monetary legends, mathematical geniuses and crooked mobsters. Who could you predict to win an highbrow conflict among specialist gamblers and Nobel Prize winners? This booklet confirms what I'd lengthy suspected, that the profitable gambler is aware extra approximately handling funds than the main PhD-laden funding banker. Poundstone's booklet explains that wisdom, and you'll be stunned via its splendor and ease. a desirable ebook, either a cracking reliable yarn and a realistic advisor for funding success."—**Paul Wilmott, mathematician, bestselling writer, and editor of ***Wilmott* magazine "From bookies to billionaires, you'll meet a motley solid of characters during this hugely unique, 'outside the box' examine playing and making an investment. learn it for the tales on my own, and you'll be stunned at how a lot else you could study with no even trying." —**Edward O. Thorp, writer of ***Beat the broker and Beat the Market* "What a fantabulous book! *Fortune's formulation *provides a deep yet crystal-clear knowing of information idea, card-counting schemes, plunging necklines, mean-variance mapping, junk bonds offered short and gambler's damage, all a part of an epic suspense story crowded with eccentric geniuses and cold-blooded killers. You'll never follow a horse race, push ahead a on line casino chip or input a marketplace an analogous method back. learn this and weep for the sting you simply *thought* that you simply had, then learn it back for a true one."—**James McManus, writer of ***Positively 5th Street*