The Line Between Aggressive and Crazy

The story of the Kelly Criterion: the magic formula that can tell investors when to use leverage and how much risk is too much. Suppose I offer you a bet. Flip a coin, heads you lose your entire bet, tails you win it back plus one and a half times, so a ten dollar bet becomes $25. And furthermore I’ll let you keep making this bet as many times as you like over the next hour, say.

This is a fantastic bet. For a $10