Fortune’s Formula: Make Favorable Bets on the Stock Market w/ Shawn O’Malley (MI374)

Shawn O’Malley discusses a formula used by top investors to beat the market averages by maximizing wealth over time. You’ll learn about the Kelly formula, its origins at Bell Labs, how Ed Thorpe used it in Las Vegas, successful investors who have used it, defining an "edge" in investing, controversies, and why it's not widely known. IN THIS EPISODE, YOU’LL LEARN: 0:00:00 - Intro 0:03:47 - The origins of the esteemed Bell Labs and how its research led to the Kelly - formula’s creation 0:15:56 - How to define and use the Kelly formula 0:19:07 - Why the Kelly formula is helpful 0:19:45- Why there are limits to the Kelly formula 0:21:35 - How Ed Thorpe beat the dealer and the markets with the Kelly formula 0:34:14 - How Claude Shannon’s approach to beating the markets with the Kelly formula differed from Thorpe’s 0:35:12 - What it means to have an edge in markets 0:39:44 - Why the Kelly formula is controversial 0:39:31 - How to think about your own edge in markets 0:46:16 - Why the Kelly formula isn’t better known 🤝 Network with like-minded value investors and get new stock ideas by joining the TIP Mastermind Community. https://www.theinvestorspodcast.com/m... 📊 Add the Fundrise Flagship Fund to your portfolio in just minutes and with as little as $10. http://fundrise.com/millennial 📈 Learn to invest like legend investors do — from the company that has interviewed them. Use YOUTUBE15 to get 15% off! https://theinvestorspodcast.com/getst... 💰Click here to download your FREE guide to Stop Worrying About Your Finances In 4 Simple Steps: https://www.theinvestorspodcast.com/s... ▶️ RELATED EPISODES: Disney's Magic Kingdom: Valuing Disney w/ Shawn O’Malley: Disney's Magic Kingdom: Valuing Disney w/ ... The Company Behind The S&P 500: Valuing S&P Global w/ Daniel Mahncke: The Company Behind The S&P 500: Valuing S&... 🎧 Listen to our episodes here: https://open.spotify.com/show/7dnn22E... 🖊️ Access the transcript and learn more about the guest here: https://www.theinvestorspodcast.com/ 📖 BOOKS MENTIONED: Fortune’s Formula by William Poundstone: https://amzn.to/407JLGL Beat the Dealer by Ed Thorpe: https://amzn.to/3YvnEcm The Outsiders by William Thorndike: https://amzn.to/3Ysx6Ny Disclosure: Some of the links above are affiliate links that we may earn commission from. This helps keep our show going! 😀 💡 OTHER RESOURCES Seeking Alpha is a crowd-sourced content service for financial markets. Take control of your financial future — Use our link here for a 14-day free trial: https://www.sahg6dtr.com/59QC8Z/R74QP/ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ABOUT OUR SHOW 🎙 On Millennial investing, we interview top investors, experts, and successful entrepreneurs such as Kevin O’Leary, JL Collins, Jesse Itzler, and more to guide you on your investing journey. 🌍 Website: https://www.theinvestorspodcast.com/m... 📝 Help us understand our audience better so we can create a more intentional user experience by answering this survey! https://www.theinvestorspodcast.com/s... ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ 📚OUR FREE INVESTING COURSES/RESOURCES https://www.theinvestorspodcast.com/t... 📊TRY OUR STOCK INVESTING TOOL: TIP FINANCE https://www.theinvestorspodcast.com/t... ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ❗ DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.