Fortune's Formula Quotes

“there’s no point in looking for hundred-dollar bills in the street. Why? Because, were there any hundred-dollar bills, someone would already have picked them up.”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

“The strategy is to bet your entire bankroll each race, apportioning it among the horses according to your informed estimate of each horse’s chance of winning.”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

“One portfolio is better than another one when it offers higher mean return for a given level of volatility—or a lower volatility for a given level of return.”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

“the way to get rich is to start a religion.)”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

“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

“In 1894 Alexander Graham Bell’s telephone patents expired. Within a few years, over 6,000 local telephone companies were competing for the U.S. market.”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

“Judge Landis ultimately ruled that a federal judge had no jurisdiction over local antigambling statutes.”
― William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street