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beat the market by Ed Thorp

  • #1
  • First Post: Jul 20, 2005 5:23am Jul 20, 2005 5:23am
has anyone read beat the market by Ed Thorp??? i just finished it. supposedly, this book started an entire industry: hedgefunds. it was written in 1966 by the same guy who invented blackjack card counting, and who later went on to become a billionaire. its a simple concept, and supposedly it still works to this day in a more evolved form. the basic system he writes about shorts warrants and goes long the underlying. not far from a straddle trade in options.
Relax and be happy.
  • #2
  • Jul 20, 2005 8:10am Jul 20, 2005 8:10am
Quoting merlin
...... the basic system he writes about shorts warrants and goes long the underlying. not far from a straddle trade in options.

Merlin,

How different is it from writing covered calls?


Matsu
  • #3
  • Jul 20, 2005 5:33pm Jul 20, 2005 5:33pm
I am currently reading Ed Thorp's 'Mathematics of Gambling" to help me with the math needed to figure probabilities etc. Interesting guy, I will have to locate and read his 'Beat the Market"

Another I am reading is Cynthia Kase's " Trading with the Odds" Next up is
Ralph Vince- The Mathematics of Money Management

It has been a long time since I used any real math and creating spreadsheets out of the formulas in the Kase and Thorp books is keeping me busy but I find I understand it better if I do so.
In trading, there is no bullshit. You either make money or you don't.
  • #4
  • Jul 23, 2005 3:44pm Jul 23, 2005 3:44pm
Quoting mrgreen
I am currently reading Ed Thorp's 'Mathematics of Gambling" to help me with the math needed to figure probabilities etc. Interesting guy, I will have to locate and read his 'Beat the Market"

Another I am reading is Cynthia Kase's " Trading with the Odds" Next up is
Ralph Vince- The Mathematics of Money Management

It has been a long time since I used any real math and creating spreadsheets out of the formulas in the Kase and Thorp books is keeping me busy but I find I understand it better if I do so.
wow, where did you get Mathematics of Gambling? is your copy in pretty good condition? ive been looking for this book but have been unable to find a clean copy for a decent price. you know Beat the Market cost me $300??? it was a clean copy though, and in reality the book is worth well over $5,000 to me there is just so much weight to the book after knowing who Ed Thorp is and that he is now a billionaire from using the exact method described in his book.

ive read Cynthia Kase, it was good but she is no Ed Thorp. Neither is Ralph Vince. i know ive said some good things about vince, but after reading Gehm's MM book, i have to say he made Vince look like a babbling mathematician.
Relax and be happy.
  • #5
  • Jul 25, 2005 1:16am Jul 25, 2005 1:16am
Quoting merlin
wow, where did you get Mathematics of Gambling? is your copy in pretty good condition? ive been looking for this book but have been unable to find a clean copy for a decent price. you know Beat the Market cost me $300??? it was a clean copy though, and in reality the book is worth well over $5,000 to me there is just so much weight to the book after knowing who Ed Thorp is and that he is now a billionaire from using the exact method described in his book.

ive read Cynthia Kase, it was good but she is no Ed Thorp. Neither is Ralph Vince. i know ive said some good things about vince, but after reading Gehm's MM book, i have to say he made Vince look like a babbling mathematician.
My copy is a pdf i found while searching for information on figuring probabilities. I printed it out for easier handling but would have preferred a bound copy. Ill keep an eye out while browsing the used book stores i love so much.
At $300 I probably wont get to read 'Beat the Market" for some time. Gives me something to look forward to.
In trading, there is no bullshit. You either make money or you don't.
  • #6
  • Jul 30, 2005 1:13pm Jul 30, 2005 1:13pm
Quoting mrgreen
My copy is a pdf i found while searching for information on figuring probabilities. I printed it out for easier handling but would have preferred a bound copy. Ill keep an eye out while browsing the used book stores i love so much.
At $300 I probably wont get to read 'Beat the Market" for some time. Gives me something to look forward to.
how big is the PDF? would you mind sharing?
Relax and be happy.
  • #7
  • Jul 30, 2005 4:12pm Jul 30, 2005 4:12pm
Merlin, try here, I think its the same book in pdf format

http://www.bjmath.com/bjmath/thorp/tog.htm
  • #8
  • Aug 1, 2005 4:09pm Aug 1, 2005 4:09pm
Quoting Dark1
Merlin, try here, I think its the same book in pdf format

http://www.bjmath.com/bjmath/thorp/tog.htm
This is the same copy I have. Thanks Dark1 for posting the url.
In trading, there is no bullshit. You either make money or you don't.
  • #9
  • Aug 1, 2005 8:06pm Aug 1, 2005 8:06pm
Thanks for the Pdf link. I remember Larry Hite in "Market Wizards" talking about reading "Beat the Dealer" by Thorp and throwing away his copy of "Principles of Security Analysis" by Graham and Dodd. His take was computing the odds and then testing. Good Stuff. Thanks
  • #10
  • Aug 1, 2005 9:18pm Aug 1, 2005 9:18pm
thanks for the link!
Relax and be happy.
  • #11
  • Feb 26, 2006 3:04pm Feb 26, 2006 3:04pm
Very cool. Mathematics of gambling is written in the 80's. if I read that, would I be wasting my time buying Beat the dealer from amazon?

I keep a close watch on this chart of mine...
  • #12
  • Feb 26, 2006 3:49pm Feb 26, 2006 3:49pm
Does anyone has a link to pdf to "beat the market". What can I read in this book?
  • #13
  • Feb 27, 2006 3:00pm Feb 27, 2006 3:00pm
for those looking to improve or brush up on basic probability theory and statistics I can reccommend the e-book available from the link below

http://www.dartmouth.edu/~chance/tea...msbook.mac.pdf
  • #14
  • Mar 26, 2009 7:31am Mar 26, 2009 7:31am
The reason Thorp became a billionaire is because he's a hedge fund manager, his fund returned about 15% a year.

If he was trading his own private account like the majority of folk in here he would at best be a millionaire.
  • #15
  • Mar 26, 2009 7:41am Mar 26, 2009 7:41am
Quoting merlin
has anyone read beat the market by Ed Thorp??? i just finished it. supposedly, this book started an entire industry: hedgefunds. it was written in 1966 by the same guy who invented blackjack card counting, and who later went on to become a billionaire. its a simple concept, and supposedly it still works to this day in a more evolved form. the basic system he writes about shorts warrants and goes long the underlying. not far from a straddle trade in options.
Not worth it , imo
  • #16
  • Mar 26, 2009 7:51am Mar 26, 2009 7:51am
Quoting arthurb
Not worth it , imo
Really? I consider it one of the best books I have ever read. LOL

To each is own I guess.
  • #17
  • Mar 26, 2009 8:24am Mar 26, 2009 8:24am
Quoting smjones
Really? I consider it one of the best books I have ever read. LOL

To each is own I guess.
yea, really
LOL
  • #18
  • May 6, 2009 5:34am May 6, 2009 5:34am
Thanks of bringing this old thread up..
  • #19
  • Aug 20, 2010 11:47pm Aug 20, 2010 11:47pm
Fortunes Formula by William poundstone is an excellent read.It explains how Thorp developed his betting /risk management formula with some Bell Lab buddies and beat vegas.

It then goes into how he became a fund manager,and describes his approach to the markets.The whole book is basically an explanation of the Kelly Criterion,and has alot of great stuff about probabilities,and even explains how Long Term Capital Management blew up because of fat tails.

Really cool book
  • #20
  • Edited 12:43am Aug 21, 2010 12:28am | Edited 12:43am
http://www.bjmath.com/index.html

Thorpe's "The Mathematics of Gambling" is reviewed by FF short-timer TheRealThing on Amazon.com - interesting to follow the links...
"If The Fool persists in his Folly he will become wise." - William Blake
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