Overview
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 Einstein's. The other was John L. Kelly Jr., a Texas-born, gun-toting physicist. Together they applied the science of information theory--the basis of computers and the internet--to 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 Buffett's rate of return. Fortune's Formula traces 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 insider's edge. Featuring a new preface and sixty pages of new material, this 20th anniversary edition of William Poundstone's classic book is the definitive account of the betting system that forever changed our understanding of risk-taking.
Full Product Details
Author: William Poundstone
Publisher: St Martin's Press
Imprint: St Martin's Press
Dimensions:
Width: 13.20cm
, Height: 2.80cm
, Length: 20.80cm
Weight: 0.363kg
ISBN: 9781250391124
ISBN 10: 1250391121
Pages: 480
Publication Date: 09 December 2025
Audience:
General/trade
,
General
Format: Paperback
Publisher's Status: Active
Availability: In Print
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Reviews
""Seldom have true crime and smart math been blended together so engagingly."" --The Wall Street Journal ""An amazing story that gives a big idea the needed star treatment . . . Fortune's Formula will appeal to readers of such books as Peter L. Bernstein's Against the Gods, Nassim Nicholas Taleb's Fooled by Randomness, and Roger Lowenstein's When Genius Failed. All try to explain why smart people take stupid risks. Poundstone goes them one better by showing how hedge fund Long-Term Capital Management, for one, could have avoided disaster by following the Kelly method."" --Business Week (four stars) ""'Fortune's Formula' may be the world's first history book, gambling primer, mathematics text, economics manual, personal finance guide and joke book in a single volume. Poundstone comes across as the best college professor you ever hand, someone who can turn almost any technical topic into an entertaining and zesty lecture."" --The New York Times Book Review
Author Information
William Poundstone is the author of more than a dozen books and has contributed to The New York Times, The Economist, Harper's, 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 prisoner's dilemma to the psychology of prices. He lives in Los Angeles.
