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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Feb 12, Tadas Talaikis rated it really liked it Shelves: Then they ask the person who is doing the tapping how confident they are that the person listening will be able to guess the song — generally people say they are fortuns confident.

We’ll publish them on our site once we’ve reviewed them. Like Thompson sampling, the Kelly criterion has been reinvented many times; Poundstone lists at least 4 inventors: They realized that there was even more money to be made in the stock market. With that said, I would recommend this book to people who are nerdy in certain ways. Lists with This Book. What is a little remarkable to me is how well Shannon did financially by 3 early venture capital investments, and how little Shannon contributed intellectually after his information theory paper; I had always somehow assumed that Claude Shannon, a genius who had offhandedly made a major contribution to genetics simply because his advisor forced him to work on genetics, and had created fully-formed ponudstone theory, had died in the s or something, because how else would such a genius have not made further major contributions?

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Dec 08, Bo rated it it was amazing Recommends it for: I did not notice any major errors pkundstone from perhaps a confusion of Euler and Gauss, and overstating the obscurity of Louis Bachelier’s life. It’s just not as cohesive as I would prefer. I’ve also read his excellent book on game theory called Prisoners Dilemma. Paperbackpages. Heard many times elsewhere, but still cool as a history.


When the efficient market hypothesis was influencing the formhla of finance, Mr.

Fortune’s Formula traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks. Not unlike The Fornula movies.

With that said, I wish Poundstone had gone into more detail explaining how the Kelly Criterion works in games or investments with more than 2 possible outcomes. It dortune the dark side of this alluring scheme, which is founded on exploiting an insider’s edge. In my view, that reinforces the views expressed in the Random Walk Guide – a good thing as far as I’m concerned. Most importantly, I like that Fortune’s Formula caused me to go and find articles written by Ed Thorpe and others explaining Kelly’s Criterion and the formla involved.

I did not pick up on enough science to be useful for my own investing and gambling, but this book does give you the basics on how it can be applied, ofrmula whets the appetite for learning more.

Fortune’s Formula : William Poundstone :

William Poundstone is rapidly becoming one of my favorite poundshone. A disappointing and poorly written book. He was a smart guy who lived modestly, made some smart stock picks, never sold them, and hit really big on one of them, but I certainly wouldn’t call him an investor who beat Wall Street. This is more of an enjoyment read for me, but it correlates tightly with the Random Walk Guide. The story is incredible overall, but I found the stock market stuff the second half, roughly less interesting and less understandable to me.

Part of the pleasure in reading this book is in the way that Poundstone exposes stupidity in what would seem to be high places. Thorp made money off warrants, and then published the strategy for increasing the credibility of his new hedge fund, and moved onto convertible bonds by applying similar reasoning: Open Pundstone See a Problem? It begins with information theory and my hero Claude Shannon but soon settles on an even more interesting genius named Ed Thorp: It reveals the dark pundstone of this alluring scheme, which is founded on exploiting an insider’s edge.


Shannon believed it was possible for a smart investor to beat the market—and Fortune’s Poujdstone will convince you that he was right. Thorp took the “Kelly formula” to Las Vegas. A few years ago I checked them out of the library and found them to be more interesting as an odd pre-Internet relic.

I did not pick up on enough science to be useful for my own i Some interesting stories revolving around the science of information, investments sometimes using this science and sometimes notand the law revolving around RICO. I started and quit this book a while back. This book is a bit of an odd combination of history-biography like The Idea Factory: No trivia or quizzes yet.

I also like this book because it blurs the line between “wagering” and “investing”.

The title does refer to the Kelly Criterion, a particular method for choosing how much of your portfolio to bet in a way that simultaneously avoids any possibility of Interesting history tying together Claude Shannon, information theory, organized crime, probability, investment theory, and the early history of hedge funds.

Nov 21, Chris Peterson rated it did not like it. Goodreads is the world’s largest site for readers with over 50 million reviews. It seems like harmless fun, almost honorable, compared to what has been going on in the past pounstone in finance. Fortine comes across as the best college professor you ever hand, someone who can turn almost any technical topic into an entertaining and zesty lecture.

There were times when I’d wished Poundstone had gone into a slightly deeper explanation — as if I was just on the verge of fully grasping the concepts — but I suspect I’d need an economics textbook for that. Fortunr this book is good and in parts it’s great.