Thorp, Kelly, & Wall Street's Looming Collapse

[zengrifter]

I don't doubt it,,, but all the article said was in question was $50M over 5 years. zg

[Diver]

This is a transcript from a Fresh Air interview with Thorp which touches briefly on his card counting but is mostly concerned with how mathematical models he introduced for hedge funds were eventually expanded and used incorrectly by Wall Street traders to create the collapse of mortgage backed derivatives.http://www.npr.org/templates/transcr...ryId=123209339 In some respects, it's similar to CP's observation that it's not sufficient just to count cards if you want to be a winner in the long run.

[zengrifter]

This is a transcript from a Fresh Air interview with Thorp which touches briefly on his card counting but is mostly concerned with how mathematical models he introduced for hedge funds were eventually expanded and used incorrectly by Wall Street traders to create the collapse of mortgage backed derivatives.http://www.npr.org/templates/transcr...ryId=123209339 In some respects, it's similar to CP's observation that it's not sufficient just to count cards if you want to be a winner in the long run.

See also -

Kelly Criterion: Fallacy or Kuhnian Paradigm Shift?
Ed Thorp to be Frozen

[zengrifter]

This Thorp Collapse thread was initiated more than a year prior to '08 collapse. zg

[zengrifter]

in the 80's taxes were much higher then current taxes and when you add state , federal , city, and county taxes in the bite is big !!!!!!1

Not at all when you figure in the lavish multiple write-offs generated by tax-shelters of that era. zg

[DDutton]

This Thorp Collapse thread was initiated more than a year prior to '08 collapse. zg

Pathetic, I mean prophetic. Blame it on the Quants!

[zengrifter]

Day trading and even short term is gambling that iis legalized by the government for big busines,small business, and the revenues it raises which I have no problem with . You make some you pay some . My entire stock market history was and is 1,000 shares of Mobil , now exxon mobil , that i got as a college graduation present and have held it now for close to 41 years although I did borrow against it once to buy my first house in 1974 . Long term you are the house and the house always wins long term for sure with a few exceptions and variances . Last year we figured with the splits and the accumulated shares I now have I would get whacked on income tax and especially since I reinvested all my dividends back into stock . However it is and will provide a great retirement for me and give a huge security blanket to my children ...

I'm guessing that you could NOT take it with you.
Who'd have guessed that within 18 months you'd be "in a better place?" zg

[DDutton]

"Far more important to the government’s case against Milken was evidence that it obtained when 50 armed troopers stormed the offices of a hedge fund called Princeton-Newport. The founder of this hedge fund, Edward Thorp, once partnered with the Genovese organized crime family to develop a system for cheating Las Vegas casinos. He wrote a seminal book on counting cards in black jack, and soon after, he was a critical – perhaps the most critical – figure in the Milken operation.

The base of Milken’s operation was the high-yield debt department of Drexel Burnham Lambert in Beverly Hills. From there, he underwrote and sold billions upon billions of dollars worth of junk bonds. Hence the moniker, “the junk bond king.”

But most observers believe that Milken derived a greater part of his fortune from a web of private partnerships and personal brokerages that traded, and often manipulated, not just the debt, but also the stock of public companies. Most profitable of all Milken’s businesses were two Chicago-based brokerages – Belvedere Securities and EGM partners – that he co-owned with the Genovese Mafia card-counter Edward Thorp." more....http://www.marketrap.com/article/vie...ichael-milken#

From the above article -

In 2006, Thorp’s son, Jeffrey, was charged by the SEC with destroying more than 20 companies in a scheme that involved unbridled naked short selling (millions upon millions of phantom shares sold into the market). Jeffrey Thorp also collaborated closely in short selling schemes with Anthony Elgindy, a notorious phantom stock peddler who is now serving an 11 year prison sentence for stock manipulation, extortion, and bribing FBI agents.