Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street (Expanded 20th Anniversary Edition) [Paperback]

An updated edition of the classic book that introduced the world to the controversial money-making formula known as the Kelly system.

In 1956, two Bell Labs scientists discovered the scientific formula for getting rich. One was the mathematician Claude Shannon, neurotic father of our digital age, whose genius is ranked with Einsteins. The other was John L. Kelly Jr., a Texas-born, gun-toting physicist. Together they applied the science of information theorythe basis of computers and the internetto the problem of making as much money as possible, as fast as possible.

Shannon and the MIT mathematician Edward O. Thorp took the Kelly formula to Las Vegas. It worked. They realized that there was even more money to be made in the stock market. Thorp used the Kelly system with his phenomenally successful hedge fund, Princeton-Newport Partners. Shannon became a successful investor, too, topping even Warren Buffetts rate of return.Fortunes Formulatraces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks. It reveals the dark side of this alluring scheme, which is founded on exploiting an insiders edge.

Featuring a new preface and sixty pages of new material, this 20th anniversary edition of William Poundstones classic book is the definitive account of the betting system that forever changed our understanding of risk-taking.

William Poundstoneis the author of more than a dozen books and has contributed toThe New York Times,The Economist,Harpers,Harvard Business Review, and other publications. After studying physics at MIT, Poundstone forged a career delving into the social implications of scientific concepts, covering topics ranging from the prisoners dilemma to the psychology of prices. He lives in Los Angeles.

Seldom have true crime and smart math been blended together so engagingly.The Wall Street Journal

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