Fortunes Formula, William Poundstone
Fortunes Formula, William Poundstone
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Fortune's Formula
The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

Author: William Poundstone

Narrator: Jeremy Arthur

Unabridged: 10 hr 2 min

Format: Digital Audiobook Download

Published: 06/20/2017

Includes: Bonus Material Bonus Material Included

Synopsis

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 William Poundstone's Fortune's Formula will convince you that he was right.

About William Poundstone

William Poundstone is the bestselling author of more than a dozen nonfiction books, including Fortune's Formula, Gaming the Vote and Priceless. His books Labyrinths of Reason and The Recursive Universe were both nominated for the Pulitzer Prize.

Reviews

Goodreads review by Samuel on November 14, 2018

A disappointing and poorly written book. Very interesting subject, but author bogged it down with an endless barrage of trivial irrelevant minutiae. All those disparate useless factoids about the Mob, Claude Shannon's marriage life, LTCM, Paul Samuelson's biography - all these seemingly unrelated st......more

Goodreads review by Taylor on May 22, 2020

Fortune's Formula begins in the 1950s, when two Bell Lab scientists discovered a formula. It wasn't the usual kind of formula that scientists at Bell Labs found, this one was about how to get rich. Getting rich maybe isn't the purpose of life, but all else being equal it's probably not a bad idea. In......more

Goodreads review by George on May 07, 2016

Hard to implement, but an awesome read.......more

Goodreads review by Bon Tom on January 26, 2020

Is it possible to not quite understand anything in the book, but still profit from it? Turns out, it is. If you're uninitiated to gambling, stocks trade, sports betting and other fields that seem like pure chaos and any yield they might ever give is pure luck, you'll get lost in terminology and phra......more

Goodreads review by Josh on December 23, 2020

Went into this book without knowing much about it. At first I thought it was going to be a biography of Claude Shannon, then I thought it would be about using maths to cheat at casinos, but it turned out to be mostly about finance; or broadly, I guess, about modelling uncertainty for fun and profit.......more

Quotes

“Seldom have true crime and smart math been blended together so engagingly.” —The Wall Street Journal

“An amazing story that gives a big idea the needed star treatment . . . Fortune's Formula will appeal to readers of such books as Peter L. Bernstein's Against the Gods, Nassim Nicholas Taleb's Fooled by Randomness, and Roger Lowenstein's When Genius Failed. All try to explain why smart people take stupid risks. Poundstone goes them one better by showing how hedge fund Long-Term Capital Management, for one, could have avoided disaster by following the Kelly method.” —Business Week (four stars)

“'Fortune's Formula' may be the world's first history book, gambling primer, mathematics text, economics manual, personal finance guide and joke book in a single volume. Poundstone comes across as the best college professor you ever hand, someone who can turn almost any technical topic into an entertaining and zesty lecture.” —The New York Times Book Review

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