William Poundstone Quotes

• Are there any mythical beasts which aren't simple pastiches of nature? Centaurs, minotaurs, unicorns, griffons, chimeras, sphinxes, manticores, and the like don't speak well for the human imagination. None is as novel as a kangaroo or starfish.

  William Poundstone

  Simple, Imagination, Kangaroos

  "Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge". Book by William Poundstone, 1988.

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• Expectation is a statistical fiction, like having 2.5 children.

  William Poundstone

  Children, Expectations, Fiction

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.50, Macmillan

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• Use "entropy" and you can never lose a debate, von Neumann told Shannon - because no one really knows what "entropy" is.

  William Poundstone

  Use, Debate, Shannon

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.57, Macmillan

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• Samuelson, however, hedged his personal bets - by putting some of his own money in Berkshire Hathaway.

  William Poundstone

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.125, Macmillan

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• People tend to be clueless about prices. Contrary to economic theory, we don't really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility, he says. We make do with guesstimates and a vague recollection of what things are “supposed to cost.”

  William Poundstone

  Clueless, Price Tag, Yield

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• The best strategy is one that offers the highest compound return consistent with no risk of going broke.

  William Poundstone

  Risk, Return, Strategy

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.69, Macmillan

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• The best paradoxes raise questions about what kinds of contradictions can occur-what species of impossibilities are possible.

  William Poundstone

  Raises Questions, Kind, Paradox

  "Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge". Book by William Poundstone, 1988.

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• In real conversations, we are always trying to outguess each other.

  William Poundstone

  Real, Always Trying, Conversation

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.56, Macmillan

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• The story of the Kelly system is a story of secrets - or if you prefer, a story of entropy.

  William Poundstone

  Secret, Stories, Entropy

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.76, Macmillan

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• The ultimate compound return rate is acutely sensitive to fat tails.

  William Poundstone

  Tails, Return, Sensitive

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.297, Macmillan

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• There is a deep connection between Bernoulli's dictum and John Kelly's 1956 publication. It turns out that Kelly's prescription can be restated as this simple rule: When faced with a choice of wagers or investments, choose the one with the highest geometric means of outcomes.

  William Poundstone

  Mean, Simple, Choices

  "Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street". Book by William Poundstone, 2005.

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• A bit is worth 10,000 basis points.

  William Poundstone

  Bases, Bits

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.75, Macmillan

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• Carl Friedrich Gauss, often rated the greatest mathematician of all time, played the market. On a salary of 1,000 thalers a year, Euler left an estate of 170,587 thalers in cash and securities. Nothing is known of Gauss's investment methods.

  William Poundstone

  Years, Salary, Cash

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.132, Macmillan

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• The more improbable the message, the less "compressible" it is, and the more bandwidth it requires. This is Shannon's point: the essence is its improbability.

  William Poundstone

  Essence, Messages, Shannon

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.57, Macmillan

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• The engine driving the Kelly system is the "law of large numbers." In a 1713 treatise on probability, Swiss mathematician Jakob Bernoulli propounded a law that has been misunderstood by gamblers (and investors) ever since.

  William Poundstone

  Law, Numbers, Misunderstood

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.102, Macmillan

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• Kelly was aware that there is one type of favorable bet available to everyone; the stock market.

  William Poundstone

  Type, Available

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.75, Macmillan

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• The assumption that anything true is knowable is the grandfather of paradoxes.

  William Poundstone

  Grandfather, Assumption, Paradox

  "Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge". Book by William Poundstone, 1988.

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• Your second ducat, like your second million, is never quite as sweet.

  William Poundstone

  Sweet, Never Quit, Like You

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.186, Macmillan

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• In The Tricky Art of Co-Existing, Sandi Toksvig navigates life's little dilemmas with wit and not-so-common sense. You'll learn the strange history of common courtesy and the one true secret of social success: how to not drive everyone around you crazy.

  William Poundstone

  Art, Crazy, Common Sense

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• At a bare minimum, understanding entails being able to detect an internal contradiction: a paradox.

  William Poundstone

  Understanding, Able, Paradox

  "Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge". Book by William Poundstone, 1988.

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• Paradox is thus a much deeper and universal concept than the ancients would have dreamed. Rather than an oddity, it is a mainstay of the philosophy of science.

  William Poundstone

  Philosophy, Oddities, Paradox

  "Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge". Book by William Poundstone, 1988.

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• Shannon's most radical insight was that meaning was irrelevant.

  William Poundstone

  Shannon, Radical, Insight

  "Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street". Book by William Poundstone, 2005.

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• There were many at Bell Labs and MIT who compared Shannon's insight to Einstein's. Others found that comparison unfair - unfair to Shannon.

  William Poundstone

  Mit, Bells, Labs

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.15, Macmillan

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• Bernoulli's real contribution was to coin a word. The word has been translated into English as "utility". It describes this subjective value people place on money.

  William Poundstone

  Real, People, Coins

  William Poundstone (2010). “Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street”, p.184, Macmillan

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• "Average" isn't so hot at the race track given those steep track takes. "Average" is pretty decent for stocks, something like 6 percent above the inflation rate. For a buy-and -hold investor, commissions and taxes are small.

  William Poundstone

  Race, Average, Track

  "Fortune's Formula". Part Three, Arbitrage, This Is Not the Time To Buy Stocks, p. 134. Book by William Poundstone, 2005.

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