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A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market Summary

a man for all markets review
a man for all markets review

They invited us out for two weeks every summer, starting in 1937 when I was turning five. These special days were what I most looked forward to each year. The Kesters’ oldest boy, strapping twentysomething Marvin, would carry me around on his shoulders. My mother, along with the women of the household, Marvin’s pretty sister Edna Mae, their mother, and their aunt May, would preserve massive quantities of fruits and vegetables. In our basement back home my father built racks for the rubber-sealed mason jars of corn, peaches, and apricots that we brought back.

Indeed Chapter 1 is entitled “Loving to Learn.” He began as a poor boy in Lomita, California delivering newspapers in the morning and in the afternoon. He got into UCLA and graduated with a degree in physics and then went on to grad school to study mathematics. He became fascinated with challenges, most famously with the gambling card game, blackjack or twenty-one. He devised a point count system that, coupled with his ability to remember cards, allowed him to beat the casinos at their own game. The author is an extraordinarily talented and successful person.

Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. In addition, any of the above-mentioned violations may result in suspension of your account. Okay now for some tidbits from the amazing professor of gambling and markets. And then he wrote a bestselling book, “Beat the Dealer” showing others how it could be done. I read that book when it came out in the early Sixties and was fascinated.

Indexing seems to be the right choice for the vast majority of people. Lacking any background related to investing, Mr. Thorp spent the summer of 1964 educating himself, as he had on many other subjects earlier in life. He included Graham and Dodd’sSecurity Analysisin his reading but also went further into scores of other books including the study of technical analysis. Early forays into investing in the silver market produced unsatisfactory results but Mr. Thorp’s self education continued, eventually reaching the subject of common stock warrants.

Because my memory is only average I ended up playing poker instead of blackjack–but that’s another story. See, I read “A mind at play”, a biography about Claude Shannon , and I dragged myself to finish it. It is hard to write about a genius, if you are not a genius yourself (the author of “A mind at play” admitted it himself). The publishers should let customers know this because it will make the reading of the book unnecessarily hard work.

I would actively recommend many other books before this one. The knowledge that I’ve got enough.” -Joseph Heller, the author of Catch-22, to Kurt Vonnegut at a billionaire’s party. If you haven’t heard of the so-called “secretary/marriage problem” in math turn to page 224.

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He was also confident that he would have more ideas that could be exploited for monetary gain. Shortly after publishingBeat the Market, Mr. Thorp independently came up with the formula that would later become known as the Black-Scholes pricing model for options. Academics Fischer Black and Myron Scholes, who were partly motivated by Beat the Market,came up with their famous formula and published the findings in 1972 and 1973. It appears that the formula should be known as Thorp-Black-Scholes, if not attributed entirely to Mr. Thorp. Find a problem, form a theory, test your idea, and apply the results with skin in the game. The authors have created a sort of anti-Book of Virtues in this encyclopedic compendium of the ways and means of power.

  • As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
  • He was a true pioneer in providing the new logic/methods in playing some games.
  • And then he wrote a bestselling book, “Beat the Dealer” showing others how it could be done.
  • I enjoyed the vivid pictures it created in my mind and the fantastical notions that spurred me to imagine for myself further wonders that might be.
  • See, I read “A mind at play”, a biography about Claude Shannon , and I dragged myself to finish it.
  • The author provides advice and informative overviews related to financial topics such as hedging, compound interest, index funds, and the causes and characteristics of financial crises.

Princeton Newport ran into trouble in late 1987 when the IRS and FBI raided the firm’s Princeton headquarters which housed the trading operations. Rudolph Giuliani, who was then a politically ambitious U.S. Attorney, was on a campaign to prosecute suspected Wall Street criminals and was looking for information to bolster his case against Michael Milken at Drexel Burnham and Robert Freeman at Goldman Sachs. Several employees of the Princeton office ended up facing charges but no one in the Newport office, run by Mr. Thorp, were ever implicated. Returns in 1988 were only 4 percent as the firm was distracted by the investigation and Mr. Thorp decided to leave at the end of 1988, after which point the partnership eventually wound down. Mr. Thorp’s ambition early in life was to excel in academia and he appears to have embraced the ethos of viewing scientific research as a public good.

Driven by an innate sense of curiosity and powered by raw intellect, combined with some help from early computer technology, Ed Thorp demonstrated that players could gain an edge in blackjack through straight forward card counting methods. An intellectual thrill ride, replete with practical wisdom that can guide us all in uncertain financial waters, A Man for All Markets is an instant classic–a book that challenges its readers to think logically about a seemingly irrational world. Thereafter, Thorp shifted his sights to “the biggest casino in the world” Wall Street. Devising and then deploying mathematical formulas to beat the market, Thorp ushered in the era of quantitative finance we live in today.

The Wisdom of Finance

Born during the Great Depression, Thorp spent his early years in Chicago, Illinois, before moving to Lomita, California, with his parents and younger brother. Although he did not speak until he was about three years old, Thorp began to demonstrate an affinity for mathematics shortly thereafter, learning to count to large numbers and perform mental arithmetic before ever attending school. He likewise became an avid reader and chess player at an early age. Having earned a scholarship by placing first in a Southern California physics exam, Thorp enrolled in the University of California, Berkeley, after high school, initially planning to study chemistry. After a year, he transferred to the University of California, Los Angeles , where he met his wife, Vivian.

Investors in the Buffett Partnership would be receiving cash plus the option to receive shares in Diversified Retailing and Berkshire Hathaway. In retrospect, we can say that people who took cash rather than shares were crazy but virtually no one at the time thought that Berkshire would become Mr. Buffett’s investment vehicle for the next half century. A autobiography by Ed Thorp, the man who has beaten not only the casino but also Wall Street. This book is recommended by Charlie Munger in the Daily Journal AGM in Feb 2017. Jack Sschwager also said the most impressive of all the people he met/featured for his Market Wizards series was Ed Thorp. I also enjoyed the final chapters in which he moves away from memoir to talk about good investment strategies and how the 2008 market crash came about and why it is likely to happen again.

The author writes about his hard childhood, showing how he rose from the bottom. As for me, I don’t care at all, because I’m interested in the actions that a person has taken as an adult. Whether he had a hard childhood or was born with a silver spoon, I don’t care. For it is not a fact that it will significantly affect the subsequent success of a person. The book is a wonderful tour de force of Thorp’s fascinating life.

The End of the Free Market

From blackjack and roulette, where he helped develop the first wearable computer, Thorp moved on to the “big casino”—that is, Wall Street. Professional investors can learn much from Thorp’s application of his gambling-based methods of solving problems, measuring probabilities, and formulating choices to stock and options trading. Is the autobiography of a man regarded by many as the father of quantitative finance. His story is one of a mathematician who moved from solving such casino games as blackjack to applying his skills to option pricing and statistical arbitrage.

The 3-star rating is the end result of a 5-star start that sputtered to the finish. You can’t time the market, and you can’t beat the house. In his case, there’s also a contrarian streak at play; told, like all of us, that the winning odds are always with the casino and that there’s no way to reliably play against the house, he took the scientific approach and tested the assertion. “I formed the habit of taking the result of pure thought—such as a formula for valuing warrants—and using it profitably,” he writes. It’s the kind of thing any would-be investor, to say nothing of casino cowboy, ought to read. Thorp’s in-the-trenches account of gaming the system is a pleasure—and instructive, too.

a man for all markets review

I also learned the US version of the prefixes million, billion, trillion, and so on, up to decillion. I found that I could add columns of figures quickly by either seeing them or hearing them. One day when I was five or six I was in the neighborhood grocery store with my mother and overheard the owner calling out the prices as he totaled up the customer’s bill on his adding machine.

Book Details

Yet, the way he describes it makes it unbearably one-sided and as if coming from a person too much in love with himself. The incredible true story of the card-counting mathematics professor who taught the world how to beat the dealer and, as the first of the great quantitative investors, ushered in a revolution on Wall Street. After teaching me counting, my father’s next project for me was reading. I was puzzled and disoriented for a couple of days; then I saw that the groups of letters stood for the words we spoke. In the next few weeks I went through all of our simple beginner books and developed a small vocabulary.

Invest when the odds are in your favour – Morningstar India

Invest when the odds are in your favour.

Posted: Wed, 01 Mar 2023 08:00:00 GMT [source]

My alarmed parents explained that I had yet to speak a single word. The doctor smiled and asked me to point to the ball on his desk. After I had done this and a few more tasks he said, a man for all markets “Don’t worry, he’ll talk when he’s ready.” We left, my parents relieved and a little mystified. When you buy books using these links the Internet Archive may earn a small commission.

Will ship within 10 business days of receiving cleared payment. The seller has specified an extended handling time for this item. Mr. Thorp was already a very wealthy man as Princeton Newport liquidated. Rather than immediately starting another large fund, he stepped back for a while but still provided consulting services related to hedge fund selection.

His measured and direct voice gives one a much better feel for the precise words and the gentle soul behind them. Even though he must have been nearly 90 when he recorded it, his voice is strong and it’s an endorsement to the physical activity that Thorp says has been good for his body and mind. It was also refreshing to see the life balance mentioned explicitly as I think so many book glamorize the intense work dedication and ignore the often detrimental effects on home life.

How do you persuade the banks to approve loans they wouldn’t normally make? You allow them to sell bad loans to the government-created Fannie Mae backed by the taxpayer. Thorp is right that it could have all been prevented with different rules, but in actuality the easy money is what the politicians wanted. The housing crisis was only possible because of government, rather than a crisis that could have been prevented by government.

That’s why I mentioned above that I only read up to half of the book. On the theme of the stock market, my interest has finally faded. Mathematics, the US stock market, and boring text are definitely not my favorite topics. That’s why I wrote in the beginning that the reader should decide whether or not he or she is interested in the above-mentioned topics. And on this basis, we can conclude that the book is highly specialized, that it is most likely not suitable for a wide range of readers who are far from all these stock markets.


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