Samuelson spotted a mistake in Bacheliers work. Bachelier's model had failed to consider that stock prices cannot fall below zero.
William PoundstoneThe story of the Kelly system is a story of secrets - or if you prefer, a story of entropy.
William PoundstoneThere is a deep connection between Bernoulli's dictum and John Kelly's 1956 publication. It turns out that Kelly's prescription can be restated as this simple rule: When faced with a choice of wagers or investments, choose the one with the highest geometric means of outcomes.
William Poundstone"Average" isn't so hot at the race track given those steep track takes. "Average" is pretty decent for stocks, something like 6 percent above the inflation rate. For a buy-and -hold investor, commissions and taxes are small.
William Poundstone