Ed Thorp - “If You Bet Too Much, You'll Almost Certainly Be Ruined” | #39
In this episode, Meb Faber welcomes Ed Thorp, renowned mathematician, author, and former hedge fund manager. Ed shares his journey from growing up during the Great Depression to becoming a self-taught scientist. He recounts his introduction to blackjack and the development of his card counting system, including his first experience in Las Vegas. Ed discusses managing emotions, the Kelly criterion, and the challenges faced in casinos. He then transitions to Wall Street, comparing gambling with investing and detailing Princeton Newport's strategy. Ed reflects on memorable trades and meeting Warren Buffett, offers investing advice, and shares his thoughts on cryonics and rationality in lottery tickets.
Key Points
- Ed Thorp's experiences growing up during the Great Depression significantly shaped his perspective on money and resourcefulness.
- Thorp's development of the card counting system in blackjack revolutionized gambling and showcased the power of applying mathematical strategies to real-world problems.
- In investing, Thorp emphasized the importance of understanding risk and using strategies like the Kelly criterion to manage bet sizing and leverage effectively.
Follow Ed: Website
Resources: A Man for All Markets Beat the Dealer Beat the Market The Kelly Capital Growth Investment Criterion
Chapters
| 0:00 | |
| 0:52 | |
| 1:04 | |
| 3:32 | |
| 5:18 | |
| 10:20 | |
| 16:50 | |
| 26:08 | |
| 32:26 | |
| 44:51 | |
| 50:35 | |
| 54:09 | |
| 57:08 |
Transcript
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