Pabrai Week: The Kelly Formula
Read the full article at: http://www.fwallstreet.com/blog/70.htm
Submitted by SilverSlime on Fri, 2007-10-05 03:57.
(via www.fwallstreet.com)
John Larry Kelly came up with a formula to determine how much you should bet on a gamble or investment to optimize your bankroll. Now known as the Kelly Formula, the equation determines the optimal percentage of your cash to bet on a favorable bet. Mohnish Pabrai talks about it and applies it to some of Buffett's past purchases.
