Re: Reasons for Kelly

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Posted by David D'Aquin on July 13, 1997 at 16:46:39: In Reply to: Re: Reasons for Kelly posted by Bisser on July 13, 1997 at 12:30:09:

Grimy is talking about exp logarithm of growth, not your expected win. To put it simply, betting too much causes your bank to jump up and down in a strange fashion such that the expected number of wins brings about a losing result if you are betting more than twice the optimal amount. I'm sure Grimy thought you understood that his use of the word expect applied to the expected logarithm of growth. The same for his number one. The optimal proportion maximizes the rate at which you expect your bank to grow. This also does not mean expected win, which would be maximized by betting 100% of the bank on each play, but it means the expected log of growth is maximized... the outcome obtained via the expected number of wins and losses... what I call the median outcome.


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