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What our customer's say!

"Enjoyable and inspiring tale", It might be a matter of personal taste, since I've found other reviewers with exactly the opposite opinion, but I really enjoyed the book and, given the fact that English is not my first language, it can't be possibly be written as badly as they say. Nevertheless, I found the book truly inspiring. It displays the unlikely social networks that can be build in a complex society, the risks people take, and the rewards some win. I didn't expect a course on "applied Kelly criterion" and much less the ultimate formula to give me advantage in the financial markets or other bet-like places, but a tale about Shannon, Ed. Thorp, Manny Kimmel, the boys at LTCM, etc. Those people who want a course on that should refer to anything derived from Bachelier/Markowitz. Those who like reading for reading, this is an interesting story about gambling.

"Book review", Good book. I enjoyed it.
Especially good for those interested in the Kelly criterion and all the people along the way who wanted to maximise gambling profit or investment profit.


"Entertaining", Book was more than I expected. Tied in many stories dating back to the early 1900's and the beginning of AT&T. Excellent read, very entertaining and well researched.

"It takes exceptionally smart people to make truly massive blunders", This book is a concise look at the evolution of formal investment theory, with continual contextual references to its ties to gambling and to organized crime. It also is a hilarious and insightful history of gambling from the Bernoulli's in the 1700s through the hedge fund traders of the late 1990's.

The author devotes over 50 pages to notes and the index. This was appreciated since I wanted to look up more about so many of the anecdotes he included.

Mr. Poundstone poignantly describes the downfall of high-flying firms such as LTCM, where the investment wizards went from the darlings of Wall Street to the dredges of the investment community in large part because they were so clever; and they started to believe they were infallible.

One LTCM road-show presentation was held at the insurance company Conseco in Indianapolis. Andrew Chow, a Conseco derivatives trader, interrupted Scholes. "There aren't that many opportunities," Chow objected. "You can't make that kind of money in Treasury markets."
Scholes snapped: "You're the reason - because of fools like you we can." (Page 281)

Warren Buffett marveled at how "ten or 15 guys with an average IQ of maybe 170" could get themselves "into a position where they can lose all their money." That was much the sentiment of Daniel Bernoulli, way back in 1738, when he wrote: "A man who risks his entire fortune acts like a simpleton, however great may be the possible gain." (Page 291)

He also points out the real world flaws in some theoretically appealing scams. The St. Petersburg Wager seems mathematically correct; yet it overlooks a vitally important constraint (pages 182-184). Another is the unfounded weight we unconsciously give to historical returns, as evidenced by his retelling of another Warren Buffett story:
In a 1984 speech, Buffett asked his listeners to imagine that all 215 million Americans pair off and bet a dollar on the outcome of a coin toss. The one who calls the toss incorrectly is eliminated and pays his dollar to the one who was correct.
The next day, the winners pair off and play the same game with each other, each now betting $2. Losers are eliminated and that day's winners end up with $4. The game continues with a new toss at doubled stakes each day. After twenty tosses, 215 people will be left in the game. Each will have over a million dollars.
According to Buffett, some of these people will write books on their methods: "How I Turned a Dollar into a Million in Twenty Days Working Thirty Seconds a Morning." Some will badger ivory-tower economists who say it can't be done: "If it can't be done, why are there 215 us?" "Then some business school professor will probably be rude enough to bring up the fact that if 215 million orangutans had engaged in a similar exercise, the result would be the same - 215 egotistical orangutans with 20 straight winning flips." (Page 314)

The author follows the lives of a few major contributors to investment theory, information theory, and betting theory: Claude Shannon, who invented Information Theory and paved the way for the digital computer age; John Kelly, who developed the formula for gains with no possibility of ruin; and Edward Thorpe, who built upon these findings and beat the roulette wheels, the blackjack tables and the investment fund managers.
It's a fast read - only 329 pages before the notes and index. I highly recommend it!


"Interesting review of the systems of the past", This is a nice look into the past systems of betting. Also nicely written and gives a good understanding of the Kelly formula. Was not quite what I thought it would be but was a nice book.

Read this reviews before You buy...

"Engaging read, some good introductory concepts.", This book is relatively well written and an interesting read, for many it will be an introduction to John Kelly, Claude Shannon, Ed Thorp and some of the other people whose career/investment histories are related in the book. This book is not a guide for the serious practitioner (nor does it pretend to be), but rather a relatively well written popular history. Its one drawback is that the author occassionally gets relatively excited about something and bludgeons the point home repeatedly.

"Entertaining and Illuminating", This truly is an excellent work by the author. I found it to be extremely entertaining. The stories are fascinating for anyone of any background due to the author's talent and skill.

"Just Great", If you are an investor, or a mathematician, or a gambler, or love money and adventure, this book is for you. The story is riveting and the writing is clear and to the point. The mathematical concepts are explained very well, though they may take (for some of you) going over them a couple of times before grasping them. I tried to read some of the math articles in the bibliography section, but gave up. Hard core math is a mind scrambler. Any book that makes you think hard is worth reading. This one is just great.

"Kelly criterion for investing?", I give the book four stars because it was a pretty good read and an informative history. The story revolves around the Kelly Criterion which is a risk management system where you bet according to the edge you have. If you have a great edge, like highly reliable tips on horse races, then you bet heavily. If the edge is a much lower probability, you risk much less. Pretty simple. If you can quantify your edge. One important aspect of the criterion was that you always took into account a catastrophic loss, so you never risked your entire account. In theory you could continue to bet forever even if you have a horrible string of losers because you are always betting only a percentage of your account.

The story revolves around John Kelly, Claude Shannon, Ed Thorpe, and a host of others including mafia members, Rudy Guiliani, Ivan Boesky, the geniuses from LTCM and many others. I enjoyed the way the author linked all of these people together. The story kept me interested throughout the entire book. And this was my second time reading it! I picked it up by mistake, read the first chapter, thought to myself "hey, I have read this book already", but I was hooked again so I kept reading. Glad I did.

The Kelly system was interesting to me because Thorpe and Shannon used it to win money at the casinos and also to make a fortune on Wall street. The Princeton-newport partners were highly successful for a number of years and surpassed almost all of Wall street with their consistently high returns. Maybe it was a great streak of luck as they implied, but maybe the market is inefficient and smart people can pull money out at will.

I am thankful for reading this book and learning about the Kelly system which is not all that different from my present risk management system. Except the Kelly system has a few rules I presently do not use. But it has gotten me interested and I will test it out and probably implement some of it into my trading.


"Things you don't get to learn elsewhere", Someone recommended this book to me as an investment book. At the time I was not sure how gambling and quantitative approach to investment are related. But this book, through its illustration of Kelly's criteria provides a new way to think about investment strategy. I learned all the moot theories in school - Mean portfolio optimization, diversification, efficient market theory, etc. But thinking of information theory, Kelly's criteria and ever present arbitrage can give one quite an edge.
The book interweaves mathematics, history and stories quite well and is a very good read. Imagine an investment book that reads almost like a fiction novel :)
The material is very well researched and it contains history of gambling, and investment and how information theory evolved. The book also gives a view into how a powerful school of thought can eclipse other schools of thought. in this case, Samuelson, et all from MIT refute geometric returns from Kelly's criteria even though working proof is present and the alpha factor in returns is not a myth.
I am glad the person recommended this book to me.