Quote:
Originally Posted by getmeoffcompletely
If Goldman Sachs finds an investment opportunity and they approximate their edge to be 30% do you honestly believe they're going to just put half their money on the line cause that's what Kelly staking says? There's opportunity costs, you don't live forever and Mayweather won't be fighting McGregor every day from now til the end of time.
Not to go all Socratic on you like some of our Russian forum posters, but this statement is legitamitely meaningless.
What does edge mean for an investment?
Are we talking just equity or fully capitalized "bankroll"? Bc I would point you to google long term capital management or Amaranth hedge fund then go back to the TGIFridays you manage and drink mudslides until you blackout.
If you bet [insert a fraction] Kelly then you do what it tells you. Or you have some kind of rules to modify it. But arguing that you don't follow it Bc of opportunity cost / that human lifespan is not infinite (I assume this is trying to get at something related to variance) / that all sporting events are not identical / repeated is laughable.
Laughable.
And btw my opinion on the matter is that the line was laughably wrong. It gets tricky though saying what it should have been Bc you are just arguing over how to discount the exponential nature of aging and long layoffs from competition.