Thorp proved that he was the former.If the principles from the book are understood the execution in different markets becomes apparent. There is a reason that the few copies that were printed are still in demand.The old saying is that those who can, do – while those who can’t, teach. There is no one in the financial world who has had a better risk-adjusted return than Thorp for the last 30 years.Virtually unknown is the fact that years before, Thorp invented/discovered the formula that is attributed to Black-Scholes, with the exception of the risk-free interest rate factor, because of existing market structure that prevented interest from being a factor.And Thorp’s treatment of the Kelly Criterion makes this a standout work.Since many have never read this book yet or tried to apply the principles that Thorp revealed in this book, it would be easy to dismiss this as some worn-out idea that has come and gone. Thorp has made a tremendous career from finding opportunities and properly exploiting them as advertised in this ground breaking book. The author has made the book available for free download from his website. But if you’re new to hedging then I recommend this book as a good introduction to the concept. The hedging system was invented almost 50 years ago when there were very few hedge funds (allegedly the author’s hedge fund was one of the first using such a system), so I don’t know if this system still works. ⭐This is a well-written book presenting a hedging system that uses stocks, warrants and other convertible securities.
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