Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

In 1956 two Bell Labs scientists discovered the scientific formula for getting rich. One was mathematician Claude Shannon, neurotic father of our digital age, whose genius is ranked with Einstein?s. The other was John L. Kelly Jr., a Texas-born, gun-toting physicist. Together they applied the science of information theory?the basis of computers and the Internet?to the problem of making as much money as possible, as fast as possible.

Shannon and MIT mathematician Edward O. Thorp took the ?Kelly formula? to Las Vegas. It worked. They realized that there was even more money to be made in the stock market. Thorp used the Kelly system with his phenomenonally successful hedge fund, Princeton-Newport Partners. Shannon became a successful investor, too, topping even Warren Buffett?s rate of return. Fortune?s Formula traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks. It reveals the dark side 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 Formula will convince you that he was right.

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From: Amazon
Posted: Aug-15-2009

Kelly formula for calculating investment bets

I picked up this book because Mohnish Pabrai, the author of The Dhandho Investor, recommended it. The author describes the Kelly Formula that was developed by John Kelly at Bell Labs in New Jersey and applied by the individuals featured in the book. The formula calculates the optimal fraction of...

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From: Amazon
Posted: Jun-28-2009

Quick, entertaining, informative

FF is a gentle introduction to information science and the 'science' of gambling and the stock market. Well worth the read. Fans of WP might be interested to know: FF is something of a departure from WP's earlier books, which are generally both rigorous and challenging treatments of their...

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From: Amazon
Posted: May-12-2009

adjectively and adverbly stretched introduction to the subject

The cover says this is the "untold story" and it's no wonder why--I really wonder if William Poundstone is enjoying playing a great joke on his agent and publisher - or helping them put over a huge joke on us. The back of the book says it's an "amazing story that gives a big idea the star...

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From: Amazon
Posted: Nov-23-2008

Enjoyable and inspiring tale

It might be a matter of personal taste, since I've found other reviewers with exactly the opposite opinion, but I really enjoyed the book and, given the fact that English is not my first language, it can't be possibly be written as badly as they say. Nevertheless, I found the book truly...

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From: Amazon
Posted: Oct-06-2008

Book review

Good book. I enjoyed it.Especially good for those interested in the Kelly criterion and all the people along the way who wanted to maximise gambling profit or investment profit.

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From: Amazon
Posted: Aug-28-2008

Entertaining

Book was more than I expected. Tied in many stories dating back to the early 1900's and the beginning of AT&T. Excellent read, very entertaining and well researched.

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From: Amazon
Posted: Jun-25-2008

It takes exceptionally smart people to make truly massive blunders

This book is a concise look at the evolution of formal investment theory, with continual contextual references to its ties to gambling and to organized crime. It also is a hilarious and insightful history of gambling from the Bernoulli's in the 1700s through the hedge fund traders of the late...

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From: Amazon
Posted: Jun-09-2008

Interesting review of the systems of the past

This is a nice look into the past systems of betting. Also nicely written and gives a good understanding of the Kelly formula. Was not quite what I thought it would be but was a nice book.

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From: Amazon
Posted: May-29-2008

OK, but not great

Having just finished Poundstone's book on Gaming the Vote, I was hoping for a book equally as interesting. Although this book was worth reading, and there are a few aspects from it that I will put into practice, I did not walk away wanting to quote it on a regular basis like I did Gaming the...

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From: Amazon
Posted: May-12-2008

Any investor or gambler needs this book!

An insightful look under the hood at the factors affecting the money making process. With a lot of very interesting stories, from the mob all the way to Nobel prize winners on Wall Street, it shows the latent traps that can destroy the bankroll of investors, gamblers, and poker players.Any...

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