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    william poundstone Quotes

    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
    tags: law 
     
    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
    tags: choice 
     
    The story of the Kelly system is a story of secrets - or if you prefer, a story of entropy.
    — William Poundstone
    tags: secret  stories 
     
    A bit is worth 10,000 basis points.
    — William Poundstone
    tags: worth 
     
    Use "entropy" and you can never lose a debate, von Neumann told Shannon - because no one really knows what "entropy" is.
    — William Poundstone
    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
    In real conversations, we are always trying to outguess each other.
    — William Poundstone
    tags: real 
     
    Shannon's most radical insight was that meaning was irrelevant.
    — William Poundstone
    tags: meaning  insight  radical 
     
    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
    tags: insight 
     
    The assumption that anything true is knowable is the grandfather of paradoxes.
    — William Poundstone
    tags: true 
     
    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
    tags: philosophy 
     
    Kelly was aware that there is one type of favorable bet available to everyone; the stock market.
    — William Poundstone
    tags: stock 
     
    The best paradoxes raise questions about what kinds of contradictions can occur-what species of impossibilities are possible.
    — William Poundstone
    tags: questions 
     
    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
    tags: secret  true  crazy  learn 
     
    Your second ducat, like your second million, is never quite as sweet.
    — William Poundstone
    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
    tags: people  value  real  money 
     
    "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
    tags: decent  race  stock  tax 
     
    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
    tags: time  year 
     
    Samuelson spotted a mistake in Bacheliers work. Bachelier's model had failed to consider that stock prices cannot fall below zero.
    — William Poundstone
    tags: work  mistakes  stock 
     
    At a bare minimum, understanding entails being able to detect an internal contradiction: a paradox.
    — William Poundstone
    The best strategy is one that offers the highest compound return consistent with no risk of going broke.
    — William Poundstone
    tags: risk  strategy 
     
    Samuelson, however, hedged his personal bets - by putting some of his own money in Berkshire Hathaway.
    — William Poundstone
    tags: personal  money 
     
    Expectation is a statistical fiction, like having 2.5 children.
    — William Poundstone
    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
    tags: people  economics  vague 
     
    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
    tags: human  novel  imagination 
     
    The ultimate compound return rate is acutely sensitive to fat tails.
    — William Poundstone
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