William Poundstone Quotes

The best strategy is one that offers the highest compound return consistent with no risk of going broke.

The engine driving the Kelly system is the "law of large numbers." In a 1713 treatise on probability, Swiss mathematician Jakob Bernoulli propounded a law that has been misunderstood by gamblers (and investors) ever since.

Expectation is a statistical fiction, like having 2.5 children.

Samuelson spotted a mistake in Bacheliers work. Bachelier's model had failed to consider that stock prices cannot fall below zero.

A bit is worth 10,000 basis points.

From Adam Smith through John Maynard Keynes, economics had been mostly talk. At Harvard economics was talk. At MIT, Samuelson made it math.

The assumption that anything true is knowable is the grandfather of paradoxes.

The more improbable the message, the less "compressible" it is, and the more bandwidth it requires. This is Shannon's point: the essence is its improbability.

In American culture the coin toss is the paradigm of the random event. A coin toss decides who kicks off the Super Bowl. Looked at another way, a coin toss is not random at all. It is physics.

Paradox is thus a much deeper and universal concept than the ancients would have dreamed. Rather than an oddity, it is a mainstay of the philosophy of science.

Samuelson, however, hedged his personal bets - by putting some of his own money in Berkshire Hathaway.

The story of the Kelly system is a story of secrets - or if you prefer, a story of entropy.

Are there any mythical beasts which aren't simple pastiches of nature? Centaurs, minotaurs, unicorns, griffons, chimeras, sphinxes, manticores, and the like don't speak well for the human imagination. None is as novel as a kangaroo or starfish.

To hedge the bets he made every working day, Meriwether kept a set of rosary beads in his briefcase.

The dealer now theorized that Thorp was memorizing the entire deck. He knew exactly which cards remained in the deck and bet accordingly. Thorp said it was impossible for any one to do that.