You are both wrong but in two different ways:
1 - you have to accept that the KC will only help *winning* players or help you at games with an edge. Period. If you apply it to a game with negative EV you will still lose. So its really not fair to talk about gamblers that do it for "excitement". That's a misapplication of KC
2 - to say that "you can bet below KC but not above" is also misguided. You must always wager *at* the KC number. You must recall that the KC number is also designed to *optimize growth of your bankroll*. Knowing how much to wager on an edge is relatively simple calculation and/or monte-carlo simulation - that's just risk-of-ruin. But knowing how much to bet to *grow* your bankroll and get the most from any given EV, well, that's a whole other number . . . in fact, that's the KC :-)
On Sat, Apr 5, 2014 at 7:32 PM, 007 <007@embarqmail.com> wrote:
nightoftheiguana2000@yahoo.com wrote:I think you're going too far here. It might depend on the situation,
>Don't get stuck if the Kelly bet is $5.522589, yes you can bet $5 and no you can't bet $6 or $10. It's that simple.
since it's so close, but I believe there's more bankroll growth with a
$6 bet than $5.
But my main comment on a stress on the Kelly Criterion is skepticism
that stressing it is necessary. It's kind of like the situation with
Christians saying one has to accept Christ as their Lord and Savior or
spend eternity in hell, even if one was born into a country in which
no one is going to hear the name Christ. I happen to believe that
such people are not doomed to hell and will basically do all right,
even assuming that Christianity would have been a step in the right
direction, which I don't want to express an opinion about. What do
people without much understanding of the Kelly Criterion do? I doubt
if overbetting is generally much of a problem. Most gamblers can be
classified into the vast majority of losers, to whom Kelly would only
tell them to stop gambling, and professionals who, no matter how
unsophisticated their understanding of the Kelly Criterion is,
generally understand that they shouldn't bet more than a certain
amount and generally don't. I don't believe I've ever had much of a
sophisticated understanding of it, but I think I've done pretty well
in not overbetting my bankroll. And I'm skeptical that chronic
overbettors will be "cured" by understanding the Kelly Criterion.
Maybe they crave excitement so much that they wouldn't be affected by
such a cerebral approach. To make a case that the Kelly Criterion
needs to be propagated more, you'd have to show examples of people
whose failure had turned to success, not due to more positive EV, but
strictly due to not overbetting any more, with % EV held constant. It
wold have to be a professional who knows enough to have positive EV
but who is so blind to the danger of overbetting that s/he'll still
lose. I think that's rare. I don't think "Fortune's Formula" made
that case.
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