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I didn't say they won't understand it, they'll just consider the applicant too stupid to understand the problem they presented: grow the bankroll.

So is your trading account entirely dispensable because the rest of your assets are "sufficiently large"?

None of what has anything to do with the interview question. They want to know how will you grow that $1000. If you start going off the rails with this "life roll" shit, you can kiss that job goodbye. Try to remember: this is not a real casino game. It exists only because the interviewers...

I see nothing extraordinary here. It's just fractional Kelly. If your net worth is say $50K but the most you're willing to gamble (aka lose) is $1K, then figure out the strategy that maximizes your potential gain. I doubt there is a general formula for this. Everything is dependent on both...

No if you allocate the entire bankroll across the wheel, you lose on 30 out of every 37 spins. The only way to make money on every spin is to bet on Red and the individual nonred numbers in an appropriate division of the bankroll.

No, I've read plenty about Kelly and this is the first I ever heard of this. This is just your own arbitrary spin. That's your choice but don't act like this is how it's "supposed to be" for everybody. Most people don't want to risk their entire net worth when they gamble, even when the odds...

Visaria, thanks for your contributions to the thread. The person who came up with the strategy you speak of is nonlinear5.

There is an article called "The Good and Bad Properties of the Kelly Criterion". It is available as a free pdf and is easily found via Google. One of the good properties is this: The Kelly bettor is never behind any other bettor on average in 1, 2, ... trials. Source: M. Finkelstein and R...

If there was a way to calculate the probability of a market top (and/or a bottom), why on earth would anybody tell you? :confused: Trading is a competition. The sooner you learn that, the better off you'll be.

Thanks for your inputs, it wouldn't have been as much fun without them. :) I still prefer the strategy that bets equally on all slots. It's pure elegance. Very appealing, and easier to analyze than most strategies.

Thanks for all your contributions to the thread. :)

107/37 is the expected return of betting on R-16 alone. 71/37 is the expected return of betting on R-14 alone. -1/37 is the expected return of betting on any other single number alone.

Strategy #1: Divide your bankroll into 37 equal parts. Bet one part on each of the not-red numbers, bet 18 parts on Red, bet 3 parts on R-16 and bet 2 parts on R-14. k*E == (18/37)(9/37) + (3/37)(107/37) + (2/37)(71/37) + (14/37)(-1/37) == 0.44631 Strategy #2: Divide your...

Fascinating. I wonder if the interviewers were aware of this strategy. I wonder even more if any interviewee came up with it in the 20-minute limit in an interview. Anyone who did should have been offered a vice-president position. :D

:)

I checked again, and my k*E values are identical for the two strategies. Can you write out the formula for F(...)? Thanks.

So basically what you're saying is ... Divide your bankroll into 37 equal parts and bet one part on each wheel slot. This works out to 4 parts on R-16, 3 parts on R-14, and one part on each of the other 30 numbers. Interesting. k*E == 0.446, which happens to be identical to the previous...

No, I mean the risk per spin. For a single bet, the bet risk is easy: 100%, because that's how much of your bet you lose when you lose. So your risk (to your bankroll) is your bet size. But we now have a combination of bets where your betsize is 100% of your bankroll but the most you can...

A question about risk ... Every spin you're betting your entire bankroll. But you can only lose 2.7% for any given spin. So what is the "risk", the 100% you're betting or the max 2.7% you stand to lose?

0.125 without borrowing, infinity with borrowing.