Risk of Ruin

Inside Long Term Capital

14 snips
Jul 17, 2024
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ANECDOTE

Early Sports Betting Model

  • Eric Rosenfeld and a professor built a linear regression model predicting professional football outcomes using 15 years of game data.
  • They won about 60% of bets in the first season, making about $1,000 when minimum wage was $2.
ANECDOTE

Simulating Card Game Probabilities

  • Eric simulated hundreds of thousands of card game hands for gambler Manny Kimmel to compute winning probabilities.
  • The analysis took two weeks on a small computer and earned Eric about $1,000, half a year's tuition then.
ANECDOTE

Developing Early Financial Software

  • Eric and Mitch Caper formed an early Apple users group and developed financial programs like Tiny Troll.
  • They sold their software for $100,000 in summer 1979, far surpassing Eric's $19,000 salary as a Harvard professor.
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