This also seems like a better way to intuit approximate answers. If I think an event has a 12% chance, and the potential payoff of a bet is to multiply my investment by 3.7, then I can’t immediately tell you what the Kelly bet is. However, I can immediately tell you that 1037 is less than halfway along the distance from 12% to 100%, or that it’s more than a tenth of the way. So I know the Kelly bet isn’t so much as half the bankroll, but it also isn’t so little as 10%.
1⁄3.7 ~ 27% >> 12% so you shouldn’t be betting anything
1⁄3.7 ~ 27% >> 12% so you shouldn’t be betting anything
Ah whoops, that’s what I get for actually intuiting rather than calculating in my example of intuiting rather than calculating :P
I’ll fix the example...
Intuitively, if I think something has a ~10% change of happening, I want at least a 10x bet. (Before even worrying about Kelly).