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I am often asked to recommend a good introduction to Technical Analysis. In my...

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Edge Versus The Odds - The Kelly Criterion

Event:

Traders & Investors Club Meeting - 14th December 2010

The Kelly Criterion is a risk management tool which takes into consideration probabilities and odds to calculate the optimal amount to invest in any strategy in order to maximise the growth of your capital over the long term and to minimize the risk of ruin.

Utkarsh Gadodia of the Traders & Investors Club discusses the principles of portfolio diversification using real life examples from legendary investors such as Warren Buffet and George Soros as well as the paradox of the Efficient Market Hypothesis and shows that these legendary investors make good use of the Kelly Criterion for investing and do not necessarily diversify as much as we have been led to believe.

Utkarsh has also provided an interesting selection of links on the last slide of his presentation.