See the seller’s listing for full details and description of any imperfections. Don’t get derailed when bad things happen – focus on what you can control and move forward. He didn’t let normal volatility shake him out of his strategy – something helpful for investors to remember during the next downturn. I did and then recited, “Alfred the Great, began 871, ended 901, Edward the Elder, began 901, ended 925,” and so on. As I finished the list of fifty or so rulers with “Victoria, began in 1837 and it doesn’t say when she ended,” the man’s smirk had long vanished.
He invented card counting, then by chance bacme an early investor in Berkshire Hathaway, was adamant about Bernie Madoff being a fraud in 1991, then became the first LP of Citadel, then turned down an opportunity to seed D. I mean no disrespect when I say this, but at times the book gives the impression that Thorp has been the Forrest Gump of Quantitative Finance. Edward O. Thorp is the author of the bestseller Beat the Dealer, which transformed the game of blackjack. His subsequent book, Beat the Market, co-authored with Sheen T. Kassouf, influenced securities markets around the globe.
While somewhat interesting, none of this material is original and can be discovered in greater detail in any number of finance/business books. The 3-star rating is the end result of a 5-star start that sputtered to the finish. Thereafter, Thorp shifted his sights to “the biggest casino in the world” Wall Street. Devising and then deploying mathematical formulas to beat the market, Thorp ushered in the era of quantitative finance we live in today. You can’t time the market, and you can’t beat the house. In his case, there’s also a contrarian streak at play; told, like all of us, that the winning odds are always with the casino and that there’s no way to reliably play against the house, he took the scientific approach and tested the assertion.
Find the formula for valuing financial options but use it to make money rather than win a Nobel Prize? This book is in part the gripping story of how one man’s genius and dedication has solved so many problems in diverse fields. But more important, it’s a fascinating insight into the thought processes of someone with little interest in fame, who has mostly stayed under the radar, yet who has followed his inquisitive mind wherever it has led him, and reaped the resulting…
A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer…
Hell, this review could very well be just a list of his achievements. I’ve come to believe very strongly that any knowledge that cannot be used in the real world is useless. Application of knowledge to solve real world problems – for individualistic gain or otherwise – satiates our desire to exist. As Munger says, we have a high moral responsibility to understand human systems and act rationally.
It turns out that Thorp took a different path to Wall Street where his ability to find mathematical inefficiencies led to the creation of successful hedge funds. Edward O. Thorp launched revolutions in Vegas and on Wall Street by turning math into magic, and here he weaves his own life lessons into a page-turner as hot as a deck full of aces. Ben Mezrich, New York Times bestselling author of Bringing a man for all markets Down the House and The Accidental Billionaires. Bill Gross read Thorp’s book on blackjack, turned $200 into $10,000 and went on to start PIMCO – the $2 trillion investment firm. Thorp was the first limited partner of Citadel, now one of the world’s largest hedge funds. Princeton Newport Partners, Thorp’s first fund, compounded at 19% per year from 1969 to 1988 with zero losing quarters.
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My father helped Marvin and his father, Old Man Kester, with the work of the farm, and sometimes I tagged along. One sunny forenoon during the second summer of our two weeks in Crete, my father took me to pick up supplies at a local store. I was just turning six, tall and thin with a mop of curly brown hair, lightly tanned, pants too short, the bare ankles https://forexarena.net/ ending in a pair of tennis shoes with frayed laces. I was carrying A Child’s History of England by Charles Dickens. It happened because my parents became friends with the Kesters, who lived on a farm in Crete, Illinois, about forty-five miles from our home. They invited us out for two weeks every summer, starting in 1937 when I was turning five.
The knowledge that I’ve got enough.” -Joseph Heller, the author of Catch-22, to Kurt Vonnegut at a billionaire’s party. If you haven’t heard of the so-called “secretary/marriage problem” in math turn to page 224. The problem is when to say yes to get the best candidate. Once you say no you usually don’t get another chance and you may find the remaining candidates not as good. On the other hand, if you say yes too soon you might miss the best choice.
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The author provides advice and informative overviews related to financial topics such as hedging, compound interest, index funds, and the causes and characteristics of financial crises. In the book’s final chapter, “Thoughts,” Thorp particularly emphasizes the importance of education, which he notes “made all the difference” for him. He particularly advocates for increased study of probability, statistics, and finance in schools, arguing that knowledge of such subjects is essential to making informed choices later in life. Born during the Great Depression, Thorp spent his early years in Chicago, Illinois, before moving to Lomita, California, with his parents and younger brother.
His descriptions of his methods sometimes get a bit technical, but serious investors will be able to follow them easily. I’ve spent a lot of time reading books about investing and quantitative finance. This book is a train ride that stops at all of the interesting stops. Yet, Ed has so much primary information to share that he manages to make so much of this his own. The coverage is incredible, the perspective is priceless.
The author’s habit to damn the damned only adds to the impression of a person unlikely to stand up for anyone in need of help or support. Thorp describes his research and discoveries about roulette, blackjack, option trading, and more, in easy-to-understand language, for a general audience. You need no prior experience dealing with probability or securities or anything else. (He even explains at one point that a molecule is a collection of atoms bound by electrical forces.) He also tells stories about the wealthy and famous people he encountered because of his books about beating the dealer and the market. Before the advent of writing and books, human knowledge was memorized and transmitted down the generations by storytellers; but when this skill wasn’t necessary it declined.
Nevertheless, he got the highest score the principal had ever seen in many years of educating bright students. Ed Thorp is a genius and will one day be recognized, officially, as one of the greatest minds of the 20th century. I haven’t finished the book yet but Thorp seems to take great pleasure in describing what a special snowflake he is. His self-aggrandizing way of reflecting the past makes him come across as a braggart, which makes for a rather painful read. One of those unique minds who combined amazing innate math abilities with a flair for practical implications, Thorpe would enjoy decades of results that even earned the respect of Warren Buffet.
Book Summary Of ‘A Man For All Markets’
Unfortunately, very few people believed that Madoff was scamming them until it all went bust. Thorp also gives an understandable explanation of why the financial markets collapsed in the first decade of the twenty-first century, and tells why something like this can keep happening. Few people have as good a grasp of financial issues as he does, and for that reason alone this is a valuable book. Figure out how to win at blackjack using card counting?
Ed Thorp A Man For All Markets – Recommended By Charlie Munger – ValueWalk
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Beginning with blackjack, he assessed through mathematical means the edge held by the player or the dealer throughout the game as the cards left in the deck changed. Based on his findings, he developed card-counting strategies that he went on to test in Nevada casinos, bankrolled by wealthy businessmen Emmanuel Kimmel and Eddie Hand. He later published these strategies in works such as the 1962 book Beat the Dealer.
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Our family dynamics also changed then, with the birth of my brother. My father, fortunate to be employed in the midst of the Great Depression, worked longer hours to support us. My mother was fully occupied by the new baby and was even more focused on him when, at six months of age, he caught pneumonia and nearly died. This left me much more on my own and I responded by exploring endless worlds, both real and imagined, to be found in the books my father gave me. My first memory is of standing with my parents on an outdoor landing at the top of some worn and dirty wooden steps.
- Having grown up in the South Bay very near to him, I would have liked a little more color and a little less instruction on how to succeed in gambling and stock trading styles that probably no longer apply.
- Unfortunately, very few people believed that Madoff was scamming them until it all went bust.
- I still remember facts from this time such as my phone number and address (3627 North Oriole; 7600 W, 3600 N) in Chicago and Chicago’s seven-digit population , cited in the old green 1930 Rand McNally Atlas and Gazetteer that’s still on my bookshelf.
- Thorp received his Ph.D. in mathematics from the University of California, Los Angeles in 1958, and worked at the Massachusetts Institute of Technology from 1959 to 1961.
- Princeton Newport Partners, Thorp’s first fund, compounded at 19% per year from 1969 to 1988 with zero losing quarters.
The writing is clear and engaging, page-turning, and not overly technical nor filled with too many numbers. He is the author of Beat the Dealer, the first book to mathematically prove, in 1962, that the house advantage in blackjack could be overcome by card counting. He also developed and applied effective hedge fund techniques in the financial markets, and collaborated with Claude Shannon in creating the first wearable computer. The remainder of the book’s chapters could be divided into three sections based on their focus, the first of which deals with Thorp’s research into the games of blackjack and roulette. His interest in such games, developed early in life, was at last able to be put to use following his move to MIT, where he had access to a variety of resources that proved crucial to his research. Thorp was particularly interested in determining whether it was possible for players to predict the outcomes of the games of blackjack and roulette in a casino setting and thus to gain an edge over the casino in which they are gambling.
The lengthy descriptions on his own mathematical skills reveal an author who is completely unaware that as good as his analytical abilities are, they are not one in a billion or possibly even one in a million varieties. This trait of glorifying the marginally superior traits/events/investments/ideas hurts the book throughout. This also creates the impression of a person ignorant of his basic flaws and incapable of providing a balanced view of the failures. To a degree, the author’s habit to share credit with only the known greats like Shannon or Buffet creates the image of a person that might have failed to mention numerous others who might have had a bigger influence in his achievements. Eversight Wealth is an independent flat fee investment advisor offering financial planning and investment management services.
I learned to do it with pencil and paper as well as to work out the answer in my head. My unusual retention of information was pronounced until I was about nine or ten, when it faded into a memory that is very good for what I’m interested in and, with exceptions, not especially remarkable for much else. I still remember facts from this time such as my phone number and address (3627 North Oriole; 7600 W, 3600 N) in Chicago and Chicago’s seven-digit population , cited in the old green 1930 Rand McNally Atlas and Gazetteer that’s still on my bookshelf. Though we were poor, my parents valued books and managed to buy me one occasionally. As a result, between the ages of five and seven I carried around adult-looking books and strangers wondered if I actually knew what was in them.
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When I was reading or just thinking, my concentration was so complete that I lost all awareness of my surroundings. Thinking I was willfully ignoring her, the shout would became a yell, then she would bring her flushed face right up to me. Only when she appeared in my visual field did I snap back into the here and now and respond.
Thorp is one of the world’s best blackjack players and investors, and his hedge funds were profitable every year for twenty-nine years. The incredible true story of the card-counting mathematics professor who taught the world how to beat the dealer and, as the first of the great quantitative investors, ushered in a revolution on Wall Street. Most of the book was autobiographical rambling filled with uninteresting anecdotes about how this math guru put his skill to work finding minuscule edges through money making schemes, whether it was casino gambling or quant-style hedge fund trading.