129: Victor Haghani – Optimal Bet Sizing—Lessons From a Biased Coin Flip Experiment
Chat With Traders
00:00
How to Get the Highest Expected Value of the Game?
The game is only worth and expected utility terms ten to forty thousand dollars, maybe more. What's the optimal strategy to follow if you were not risk averse at all? The answer is that you bet a hundred % of your money on every flip,. But when you lose on the next coin, you've lost 50%. You're down at 75 cents. So do that up and down four times, right? And you're down to having 30 cents left over. If you want to finish off any further comments you have yet, feel free to do so.
Transcript
Play full episode
