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Thread: John Grochowski writes about money management.

  1. #361
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    A famous economist said, "What does the long-run mean, as in the long-run we are all dead."

    Well, aside from that consideration, we are left with the Kelly Criterion. The Calculus version of the corresponding Algebra linear programming of early Game Theory. Though, the math has come a long way baby since those relatively simple 50's formulas later employed by Mr. Thorp to generate 10's of millions in private investments. Not only better definitions of money management, but full-fledged methods for skirting the newest theories of all together.

    In a nut shell, money management is the optimization of a given expected value which may be positive, or negative. In the extremes, many negative expectancy games may be made into winners with proper MM, and, many positive expectancy games may be doomed into losers w/o it. It's where, loosely, bet selection and progression allow the variance to meet up with the mean. Sort of like the "saddle points" of the poker theory, by which all of the optimal strategies must be derived simultaneously. But, a level or two beyond.

    Anyone who speaks of stop-losses, or the contrary, is in the pursuit of unhappiness. No point in being an atheist, or a believer, to argue about it when you can just be your own god/devil. Humanism of a sort, I guess.

  2. #362
    I like this:

    Originally Posted by ThomasClines View Post
    In a nut shell, money management is the optimization of a given expected value which may be positive, or negative. In the extremes, many negative expectancy games may be made into winners with proper MM, and, many positive expectancy games may be doomed into losers w/o it.

  3. #363
    I do too Alan. By definition, he's referring to the "long-term", and in my case at least, "extreme" is really what it took for my play strategy to have been developed and to have been so successful over a long time. When luck is the main ingredient, every aspect really has to be extreme, including the work that went into it.

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