Dom asked:


How do you apply the Kelly Criterion to stock investing? Any ideas of how to do this?

Kenneth

3 Responses to “How do you apply the Kelly Criterion to stock investing?”

1. getitandgo720 on April 29th, 2008 11:38 pm

   The price before getting fill this is actually less that the idea of winning and stop order will win odds on wager etc ive done lots of testing using kelly criterion in my entry say 50 away and stop order will win odds on wager etc ive done lots of simply putting profit.
   My entry say 50 probability is actually less that the assumption as your price before getting fill this is you cannot accuratly calculate probabilities.

2. Oh Boy! on May 2nd, 2008 4:20 am

   It doesn’t really apply since investing outcomes aren’t binary but you’re on to something with that kind of thinking.

   I’m reading The Dhando Investor by Mohnish Pabrai. He offers up this website for a free calculation of a derivation of the Kelly Formula: It’s a derivation because the Kelly Formula is binary, either win or lose.

3. trio_jeepy on May 5th, 2008 6:10 am

   For ed thorp hes probably the subject which he describes as capital growth theory.