49 lines
1.8 KiB
Markdown
49 lines
1.8 KiB
Markdown
# kelly-paper-experiment
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If you start with $100 balance, and you make a bet with a 70% chance of winning. If you win, you get $80. If you lose, you lose $80.
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Do you take the bet? Even more interesting, if you could keep repeating this bet over and over again, always betting 80% of your balance, should you do it?
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It makes sense, right, the odds are in your favor!
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### The actual answer - if you want to go broke, then yes
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This blew my mind, how counter-intuitive the answer to this question actually is.
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This program runs 16 simulations where you start with a balance of 100 currencies. You make consecutive bets, always betting 80% of your total balance with a 70% chance of winning each bet. It then reports the results after ONLY 200 bets. The result is the percentage of your returns (your end balance divided by your starting balance).
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### Output
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Notice the e-n at the end... these are very small numbers, with only one simulation winning out with 24441% return based on the original balance.
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* 9.615689177895335e-11
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* 0.037253150033722274
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* 1.3190245785864657e-13
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* 1.0684099086550371e-11
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* 0.0041392388926358116
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* 0.004139238892635805
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* 5.1101714723898945e-05
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* 7.788708234095249e-09
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* 244.4179173712515
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* 5.67796830265542e-06
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* 0.0041392388926358185
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* 1.1871221207278168e-12
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* 0.0004599154325150897
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* 1.0684099086550387e-11
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* 7.788708234095218e-09
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* 0.0041392388926358116
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In other words, given enough time, we're all screwed.
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### Reference Video
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[](https://www.youtube.com/watch?v=91IOwS0gf3g)
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### How to build this program yourself
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1. Install go - https://golang.org/dl/
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2. Clone - git clone https://deadbeef.codes/steven/kelly-paper-experiment.git
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3. Build - cd kelly-paper-experiment && go build .
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