Kelly criterion and loan like BR
Quote: EddyFullI'm AP player. I know that I need use Kelly criterion for effective play. But what is the formula if I have a loan like my BR?
It changes nothing, betting Kelly will maximize your profit.
If, however, you mustn't end your session below your starting BR, because otherwise the loanshark will kill you, it is a different story. In this rare case, Martingale - starting with the lowest denomination possible - seems to be the correct strategy. Once you have turned a profit, you bet only the profit and let it ride until a Kelly approximation at the lowest denomination becomes feasible. If you go back to starting BR, start the Martingale again.
Opinions?
Correct. To use Kelly you need to define an advantage/edge % in return.Quote: RSWhat are the terms on the loan?
10k loan on 2 month with 5250 payment every monthQuote: RSWhat are the terms on the loan?
Quote: Dalex64That is an interest rate of 39.784%
https://financialmentor.com/calculator/interest-rate-calculator
He BETTER be an AP player!
what's wrong with it? can you give me a lowest interest rate?Quote: DeMangoHe BETTER be an AP player!
Quote: EddyFullwhat's wrong with it? can you give me a lowest interest rate?
Are you having a laugh?
What happens when you lose that money? You sure as hell won't be repaying the capital or the interest out of your winnings.
Quote: EddyFullwhat's wrong with it? can you give me a lowest interest rate?
As a "wise" man once told me....."That's cheap for street money".
Quote: OnceDearWhat happens when you lose that money?
I'll pay from my current BR.
If that's the best rate you can find, you must not have much history of borrowing money and paying it back.
now you are being silly. The loan is either none of your bankroll, part of your bankroll or all of your bankroll. If you propose to borrow the money but cover the loan with your existing br then your existing br is not available as br. So what's the point of getting the stupidly expensive loan?Quote: EddyFullI'll pay from my current BR.
Dammit. Why should anyone take this thread seriously?
Take both questions as rhetorical. I'm done here.
Quote: EddyFullI'll pay from my current BR.
This is EXACTLY how they set you up to pay forever. This kind of circular reasoning and unrealistic optimism.
Just say No. Really.
I don't have any collateral. I have 5-figure BR only. I never have a job. My history is 1 loan in my national currency for 4 years with 62% rate (it was a good decision 4 years ago). June 2017 will be the last month I need make a payment. This is reasons why I can't get good rate.Quote: billryanWhat sort of collateral do you have?
If that's the best rate you can find, you must not have much history of borrowing money and paying it back.
It does not matter how much your rate, if you can get more money than your % is it +EV. I can make 100% of my BR per month. But it's EV. If I get -1 std dev I don't earn anything.
So, it's intuitive +EV, but I don't trust my intuitive. I'm here ask you about formula.
Quote: EddyFullI don't have any collateral. I have 5-figure BR only. I never have a job. My history is 1 loan in my national currency for 4 years with 62% rate (it was a good decision 4 years ago). June 2017 will be the last month I need make a payment. This is reasons why I can't get good rate.
It does not matter how much your rate, .... I can make 100% of my BR per month. But it's EV. If I get -1 std dev I don't earn anything.
Sorry I can't answer because I split my sides laughing.
Only two questions, . . Just to satisfy my curiosity:-
What is the nature of your Advantage play?
Is that 62% APR?
Eddy, You are either Brilliant, Crazy, or Trolling. Which do you think it is?
Sorry, I don't want answer on your first question.Quote: OnceDear
What is the nature of your Advantage play?
Is that 62% APR?
Eddy, You are either Brilliant, Crazy, or Trolling. Which do you think it is?
Yes, it's APR.
It's not trolling. If you think you're rirgt, please use numbers to proof it. Can you do it with math?
Quote: EddyFullI don't have any collateral. I have 5-figure BR only. I never have a job. My history is 1 loan in my national currency for 4 years with 62% rate (it was a good decision 4 years ago). June 2017 will be the last month I need make a payment. This is reasons why I can't get good rate.
It does not matter how much your rate, if you can get more money than your % is it +EV. I can make 100% of my BR per month. But it's EV. If I get -1 std dev I don't earn anything.
So, it's intuitive +EV, but I don't trust my intuitive. I'm here ask you about formula.
Why not wait until you are -1SD before getting the loan. As long as you are above that, the money is not needed but you are paying high interest on money that never gets put in play.
Your BR is five figures in your National Currency. What is it in Dollars or Euros?
Can explain why you think so?Quote: mamatA loan is like infinite Kelly. Risk with zero bankroll.
Cards don't have a memory. My BR is five figure in euro. I said "national currency" related to my loan, because loan in a national currency of a developing country have high rate always.Quote: billryanWhy not wait until you are -1SD before getting the loan. As long as you are above that, the money is not needed but you are paying high interest on money that never gets put in play.
Your BR is five figures in your National Currency. What is it in Dollars or Euros?
Which we know is a 2 month loan at 39%aprQuote: EddyFull10k loan on 2 month with 5250 payment every month
then you talk about
Which is totally different with nearly twice the interest rate.Quote: EddyFull
1 loan in my national currency for 4 years with 62% rate (it was a good decision 4 years ago). June 2017 will be the last month I need make a payment.
That incredible inconsistency makes you just that: not credible.
Quote:I can make 100% of my BR per month.
So you can turn €10,000 into €20,000 every month on average. . . And you've achieved that for nearly 4 years.
I wonder if you compounded your growth from 10k,20k,40k,80k,160k,320k to 640k for your first 6 months and now after 46 months have 10k *2^46 = €700000000000000000
or whether you were just a bit more cautious and only tried to make 10k per month, giving you a pathetic €460,000 today. In either case, the pathetic little 5 figure loan is not significant.
Or can you not really double your bankroll every month?
No shame in that. The most spectacular AP can't do that. But if you want sensible answers, you need to quote sensible and consistent numbers.
I asked what was the nature of your AP. I wasn't asking specifics. Simple enough to state cards, dice, other and maybe tell us about the wagering limits that apply.
And I don't trust your description of your AP prospects, leaving nothing on which to base any observations, calculations, or formulae.Quote:. . . but I don't trust my intuitive. I'm here ask you about formula.
What is totally different? I want to borrow 10k for 2 month. I don't have this loan now. billryan ask me about a collateral and my history of borrowing money. I confirmed his words: I get high rate because I my borrowing history is 1 loan only 2 years ago. Why I'm not credible?Quote: OnceDearWhich is totally different with nearly twice the interest rate.
Obv. I don't have offer that can double my BR every month for nearly 4 years. I found this offer a 2 month ago.Quote: OnceDearSo you can turn €10,000 into €20,000 every month on average. . . And you've achieved that for nearly 4 years.
Ohh... if the nature means a game — it's blackjack.Quote: OnceDearI asked what was the nature of your AP. I wasn't asking specifics. Simple enough to state cards, dice, other and maybe tell us about the wagering limits that apply.
And I don't trust your description of your AP prospects, leaving nothing on which to base any observations, calculations, or formulae.
Quote: EddyFullI found this offer a 2 month ago.
Ohh... if the nature means a game — it's blackjack.
OK, so you have a way of playing blackjack that gives you enough advantage to, on average, double your bankroll each month.
That's a spectacular expectation!!!!
You can either get a player advantage of several percent for an awful lot of rounds, or there is a massive bonus exploit to be had.
Do you honestly think the casino is going to happily let you cash out 10K profit from them, month after month. I, myself, found a few ways of getting hefty advantage at online casinoes. They were quick and happy to renege on paying me, trying to confiscate all my account balance, and then make me an ex-member. Hope your casino doesn't do that to you while you are in the hole with that damned stupid loan hanging over your head. Kelly won't help you then.
it's a few casinos and no, I don't think so. They banned and I ready to it. They confiscate slightly less than 1k today, but I think I'll can return it.Quote: OnceDearDo you honestly think the casino is going to happily let you cash out 10K profit from them, month after month. They were quick and happy to renege on paying me, trying to confiscate all my account balance, and then make me an ex-member. Hope your casino doesn't do that to you while you are in the hole with that damned stupid loan hanging over your head. Kelly won't help you then.
Quote: mamatA loan is like infinite Kelly. Risk with zero bankroll.
Completely wrong. Infinite growth with no risk. How good is your hide and seek?
Quote: AxelWolfTell me what play you can double your BR each month and I might be willing to make you an interest-free loan depending on the situation.
I'll work for you for a month ,starting at a dime a day, but my salary doubles every day.
Quote: billryanI'll work for you for a month ,starting at a dime a day, but my salary doubles every day.
I would even do that in February. If it's a Leap Year I will throw in the 29th for FREE.🤑
I not even under the impression he is talking about a situation where one can keep doubling their BR each month. But if there was a situation where someone could make 30k+ per month with a good percentage, it would be more than worthwhile traveling for, and even loaning someome10k.Quote: billryanI'll work for you for a month ,starting at a dime a day, but my salary doubles every day.
I have a feeling if this is +EV, it's a high ROR and low percentage return.
Quote: AxelWolfTell me what play you can double your BR each month and I might be willing to make you an interest-free loan depending on the situation.
Eddy,
For what it's worth, he does have the money and he means what he says. You should discuss this privately, though, not here for the moment.
Quote: MaxPenI would even do that in February. If it's a Leap Year I will throw in the 29th for FREE.🤑
I'd fire you after two weeks.
Quote: billryanI'd fire you after two weeks.
I'll do that. Wage doubles every day, starting at 10 cents, for 14 days.
EDIT: Actually probably not. But it's still a decent wage.
Quote: billryanI'd fire you after two weeks.
Is there a severance package? 🤔
What is the question, how does the criterion work? This is a method of calculating the size of the bet from the bank, https://wizardofodds.com/gambling/kelly-criterion/
Unless conditions from where the money is taken affect it? It seems to me not ...
If in simple terms:
For example, the advantage in the game = 1%
Bankroll = 2000
So the bet should not be more than (1% * 2000) / 4 = the bet should not be more than 5
Quote: EddyFullI'm AP player. I know that I need use Kelly criterion for effective play. But what is the formula if I have a loan like my BR?
Then you said. . .
Quote: EddyFullSo, nobody knows how to use math for this case?
Well. Yes. We all do. https://wizardofodds.com/gambling/kelly-criterion/ explains Kelly pretty well.
You use Kelly based wagering to maximise the expected growth rate of whatever bankroll you have at hand at any point in time. If you have $10,000 in your hand and a 1% advantage on a wager, then you stake 1% of $10,000 or $100. * The outcome of that wager might be that you find yourself with only $9,900 left for your next wagers and with your persisting 1% advantage your next bet is $99, etc, etc. Theoretically you can never lose all your bankroll, apart from the practicality that there will be a lower limit on any wager.
Nothing about Kelly criteria says that you cannot find yourself with only a tiny fraction of your bankroll remaining at any point in time. What the loan shark does to you then is your problem. For that you need to look at risk of ruin calculations, and for that, you need to define what ruin means to you.
To see if your venture is worthwhile you need to weigh up the consequences of failure and compare the expected dollar profit per month with the amount of interest to be paid. At the rates of interest you've mentioned, you would be insane to proceed. But then your claim of expecting to double your bankroll each month are already indicative of delusional insanity.
Just don't do it.
Also, don't ask vague questions about maths. If you have a question, formulate it properly. Then don't be rude to the forum by saying that we are not competent to answer your incomprehensible question.
* I ignored the variance part of the kelly maths, for simplicity. If you want more accuracy
Bankroll percentage wagered = advantage/ Variance =1%/1.3225 for typical rules. So that $100 bet would really be $76
