I try to do the same, personally I find it challenging. Another aspect that can throw a wrench in things is that even bets with negative expected value can sometimes be good to take because their payoffs are anticorrelated with other multiplicative bets that you take. Hence if you take the negative EV bet, the Kelly bet size for the combination of the two becomes bigger than it would be with just the other bets alone and the growth rate increases too.
Huh, can you give an example of a bet like that that you make in real life? I’ve seen that kind of thing in investing, but struggle to think of a good example outside of that.
I try to do the same, personally I find it challenging. Another aspect that can throw a wrench in things is that even bets with negative expected value can sometimes be good to take because their payoffs are anticorrelated with other multiplicative bets that you take. Hence if you take the negative EV bet, the Kelly bet size for the combination of the two becomes bigger than it would be with just the other bets alone and the growth rate increases too.
Huh, can you give an example of a bet like that that you make in real life? I’ve seen that kind of thing in investing, but struggle to think of a good example outside of that.
Buying insurance of various kinds.