vp_wiz wrote: "Still, when it comes down to it, the derivation of Kelly numbers is not sourced from ROR calculations."
??? There is no ROR with the Kelly system. There is risk, perhaps that's where I lost you. Anytime you have a gamble there is risk. With the Kelly system there is no risk of RUIN (ROR).
The bottom line is that we hear all the time: "don't overbet your bankroll". But what does that mean in terms of hard numbers? You seem to be saying that several percent of risk of ruin is OK. How many percent? Many Kelly gamblers, but not all, consider betting more than the optimum Kelly bet to be overbetting. How is this applied to video poker? If you only gamble with the portion of your bankroll that is over the optimum Kelly bankroll (approximately betsize x variance / edge), you will never bet more than the optimum Kelly bet (approximately bankroll x edge / variance) and by this definition you will never overbet your bankroll, and your risk of ruin is zero. What do you do with the rest of your bankroll? You find a lower risk gamble that puts some of it into play. Or you wait until you can build it back up again with contributions from your day job.
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Posted by: nightoftheiguana2000@yahoo.com
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