--- In vpFREE@yahoogroups.com, Ed Miller <ed.miller@...> wrote:
> Now you could call that "fractional Kelly" betting, but I would argue that
> one needn't even know anything about Kelly at all to functionally manage and
> grow a working professional gambling bankroll. Ok, you're betting a fraction
> of Kelly's optimum. So what?
In order to bet a fraction of Kelly, you have to know what the Kelly value is. Otherwise most likely you will eventually overplay your bankroll. You have to know what Kelly is to know whether or not you are over or under Kelly betting. It's just math, but if you're "trying to grow a bankroll", you are constrained by the math of Kelly. Even if you don't even know what Kelly is, you are still constrained by the math. Even if you deny Kelly, you are still constrained by the math.
The poker world is full of top players who overbet Kelly and bust out as a result, even though they are top players. Since they are top players, they can get someone (a sucker) to stake them and take the risk. But the end result is the same, overbet Kelly and bust out. If there are suckers who will take this risk, and there are, then it is they who suffer the consequences.
Here's a video poker example: FPDW has a Kelly number of 2899 (I think, someone else can double check that number). You spot a quarter FPDW machine, five coins max bet, so $1.25 a pull. Your current bankroll is $5,242.69. Can you play this game? Under Kelly, yes, as long as your bankroll remains over 2899 x $1.25 = $3624. If your bankroll is under $3624, the Kelly answer is no, if you played this you would be taking too much risk to your bankroll and getting less than optimal growth in return for taking that risk.
