Can someone please explain how to apply this first and an ELI5 second? (www.youtube.com)

submitted 1 year ago by cheese_greater@lemmy.world to c/asklemmy@lemmy.ml

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[-] cheese_greater@lemmy.world 2 points 1 year ago* (last edited 1 year ago)

Make smaller bets that are more likely to win and that have smaller risks of downside for a higher "guranteed" positive return rate. —Me (my understanding)

Is this an accurate understanding? Like focus on additive gain rather than trying to "hit the motherlode" or something?

Sorry, I didn't feel like he really spelled out a takeaway means of immediately understanding and applying this

[-] limitedduck@awful.systems 5 points 1 year ago

The key is not letting your losses affect your bet amount. With the gain being only 80% instead of 100%, betting your bank means 1 win and 1 loss leaves you with less than you started. Making your bet amount fixed between flips means 1:1 will instead give you a net gain. The Kelly Criterion says there is an optimal proportion of bank you can bet that will maximize this gain over many flips

[-] cheese_greater@lemmy.world 1 points 1 year ago

Is there a metaphysical or like everyday life kind of application to this, everybody seems to be talking about Gambling or like using that metaphor at the very least. I don't gamble (in name if not in deed) but I sense there's a takeaway I can sort of apply to life buried in here. Any thoughts?

[-] limitedduck@awful.systems 1 points 1 year ago

My takeaways would be:

Never trust averages on their face
Being consistent gives you an advantage
Always be looking to reevaluate your situation and maximize what you can get out of it

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this post was submitted on 24 Oct 2023

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