Players are confused about the inevitability of losing in the long term because they each play for a comparatively short time, which allows some of them to be lucky winners.

For the second time, the Ten-Count System had shown moderately heavy losses mixed with “lucky” streaks of the most dazzling brilliance. I learned later that this was a characteristic of a random series of favorable bets. And I would see it again and again in real life in both the gambling and the investment worlds.

In the abstract, life is a mixture of chance and choice. Chance can be thought of as the cards you are dealt in life. Choice is how you play them.

The Kelly-Thorp method requires no joint distribution or utility function. In practice, one needs the ratio of expected profit to worst-case return—dynamically adjusted (that is, one gamble at a time) to avoid ruin. That’s all.

The number of households worth at least $1 million was thought to be about ten million in 2015. With so many millionaire households, the goal of becoming one of them looks within reach. To see what might be done, imagine you’re an eighteen-year-old blue-collar worker with no savings and no prospects. What if, somehow, you could save $6 a day and

also believed then, as I do now after more than fifty years as a money manager, that the surest way to get rich is to play only those gambling games or make those investments where I have an edge.

The IBM 704 had done a thousand man-years of hand calculations in just ten minutes of computer time. I looked at these results with great excitement, for they would very likely either prove I was right or dash my hopes. The result was a player disadvantage of 2.72 percent with all the Aces gone—2.51 percent worse than the overall 0.21 percent

When Commodity Futures Trading Commission chairperson (1996–99) Brooksley Born wanted to regulate the derivatives that would later be a major cause of disaster, the PBS program Frontline detailed how she was blocked in 1998 by the triumvirate of Federal Reserve chairman Alan Greenspan, US Treasury Secretary Robert Rubin, and Deputy US Treasury

This plan, of betting only at a level at which I was emotionally comfortable and not advancing until I was ready, enabled me to play my system with a calm and disciplined accuracy. This lesson from the blackjack tables would prove invaluable throughout my investment lifetime as the stakes grew ever larger.