Thorpe.

I studied physics and got a Ph.D. in physics.

Later, he switched to mathematics, successfully obtained a PhD in mathematics, and became a mathematics professor.

Of course, this is an outstanding person, but what he is most outstanding about is not in academics, but in investment. He brought mathematics from theory to actual investment, and founded the school of quantitative investment.

The two funds he founded in 1969 had posted positive returns for 19 consecutive years by the time they were unexpectedly closed in 1988, with annualized returns reaching 15.1% and 18.8% respectively. This was quite a remarkable performance.

There are two points in this book that impressed me deeply: 1. Probabilistic thinking and doing things with high probability.

It is generally believed that in gambling, the casino has a probability advantage, so in the long run, the gamblers will definitely lose, and the casino will definitely make a lot of money.

But taking blackjack as an example, Thorpe believes: According to the rules, the casino must continue to ask for cards before 17 o'clock, but gamblers do not have to.

Therefore, when the low card is played first, the gambler has an advantage over the casino.

Thorpe not only demonstrated theoretically, but also went to the casino to test it himself, and finally returned home with a huge profit.

What I learned from this is: consider the probability advantage more, and it is reasonable to raise your bet when there is a high probability of winning, but don't go all-in unless you can win 100% of the time.

Otherwise, reduce your bet.

In this regard, Long-term Capital Company is a negative example. It ignores small-probability events and blindly increases leverage. In the end, when a black swan occurs, it is completely defeated!

2. Make reasonable use of arbitrage, hedging and other tools to do things that have a high probability of winning.

The book introduces how Thorp made huge profits by taking advantage of company splits and option pricing errors.

In fact, convertible bonds in A-shares are also a good investment tool, with a guaranteed bottom and no upper limit.

If you use it rationally, you can also achieve risk-free arbitrage.

The above are some of the gains from listening to the book. I also recommend it. I think it is a good book and I will read it again if I have the opportunity.