This and the linked post have been really helpful for my attempts to better internalize the Kelly Criterion. Thanks!
EDIT: I see you’ve corrected the mistake with the 12% and 2.7x return that I originally discussed below in a subsequent post so the details below aren’t necessary. Maybe consider linking that post in the Addendum?
Mostly unrelated to the above, this is sort of a nitpick but between the body and the addendum, you (implicitly) switch from the odds-as-ratio-of-probabilities representation of b/a to one in which b is net fractional odds and a is assumed to be 1. I know this makes sense because you’re explicitly talking about bets in the final section but I’m bringing it up because it might throw off someone who hasn’t read as many discussions of Kelly.
This and the linked post have been really helpful for my attempts to better internalize the Kelly Criterion. Thanks!
EDIT: I see you’ve corrected the mistake with the 12% and 2.7x return that I originally discussed below in a subsequent post so the details below aren’t necessary. Maybe consider linking that post in the Addendum?
Mostly unrelated to the above, this is sort of a nitpick but between the body and the addendum, you (implicitly) switch from the odds-as-ratio-of-probabilities representation of b/a to one in which b is net fractional odds and a is assumed to be 1. I know this makes sense because you’re explicitly talking about bets in the final section but I’m bringing it up because it might throw off someone who hasn’t read as many discussions of Kelly.