Again, that's missing the forest for the trees. The greatest difference for Kelly is that it's the optimal number to *grow* your bankroll. Mentioning ROR is for allegory, choose any other formula you want, it doesn't matter. But using Kelly to keep you from going broke is like using a Ferrari to go to the grocery store. You *could* do that, but there's better ways and a misuse of the Ferrari . . .
On Sep 19, 2014, at 12:36 PM, nightoftheiguana2000@yahoo.com [vpFREE] <vpFREE@yahoogroups.com> wrote:
In my mind the greatest difference between the Kelly system and the ROR calculation is that the Kelly system tells you when to stop and drop down in denomination or find a lower risk gamble (approximately when your current bankroll x edge / variance is less than your current betsize). The ROR calculation assumes you'll fire away to the very last cent. That assumption strikes me as gambling out of control. You could set the risk of ruin very low, say 0.1%, but then your bankroll growth is also very low. What's an acceptable risk? Kelly has that answer, the ROR calculation does not.
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Posted by: funny.young.guy@gmail.com
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