YouSaid · the spoken record

Ed Thorp

lines on the record: 92
first: 2021-12-20
most recent: 2021-12-20
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Ever top this in my life. Another important point of life here. My thoughts were much like I expected his to have been. That acknowledgement, applause, and honor are welcome and add zest to life, but they are not ends to be pursued. I felt then as I do now, that what matters in life is what you do and how you do it. The quality of the time you spend and the people you share it with”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because he's at a turning point in his life. Like, where is happening here? And he's just got good advice. I want to be clear here. I'm not being clear. I'm stuttering. This is just some great thoughts on life. So let me just read that to you. During the long ride back, this is after the talk. During the long ride back, I wondered how my research into the mathematical theory of a game might change my life. In the abstract, life is a mixture of chance and choice. Chance can be thought of as the card you're dealt in life. Choice is how you play them. I chose to investigate Blackjack. As a result, chance offered me a new set of unexpected opportunities. And one of those is obviously going to be working with Claude Shannon and he talks about what they're having a conversation. They want being of like mind. So it says ever since my first meeting with Claude Shannon, we've been working on the roulette project approximately 20 hours a week. Following a roulette work session at the Shannon's house, Claude asked me at dinner if I thought anything would”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Find possible flaws. My few minutes turned into an hour and a half of animated dialogue during which we grab lunch in the MIT cafeteria and they're going to develop this partnership in developing the world's first wearable computer. As we return to his office, he asked me, are you working on anything else in the gambling area? I hesitated for a moment, then decided to spill my other big secret, explaining why roulette was predictable, and that I planned to build a small computer to make predictions wearing it hidden under my clothing. Ideas flew between us, several hours later. Remember he was only supposed to get a few minutes. Now he's like two hours into this. Now there's several hours after that. We finally parted, excited by our plans to work together to beat the game. Meanwhile, I was planning to present my blackjack system at an annual meeting of the American Mathematical Society in Washington, DC. I submitted an abstract of my talk titled Fortune's Formula The Game of Blackjack. Also, there's a very famous”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“a future episode of Founders sometime in the next like three or four months something like that. So, anyways, he meets Claude Shannon because he needs somebody. He's at MIT and he needs somebody to co-sponsor so he could publish this paper in an academic or science journal. There's only one person that could, and it's called Shannon. This is fantastic. This required a member of the Academy to approve and forward my work. So I sought out the only mathematics member of the Academy at MIT, Claude Shannon. Claude was famous for the creation of information theory, which is crucial for modern computing, communications, and much more. The department secretary arranged a short appointment with a reluctant Shannon. However, she warned me that Shannon was going to be in for only a few minutes, that I shouldn't expect more, and that he didn't spend time on topics or people that didn't interest him. A little in all, but feeling lucky, I arrived at Shannon's office. Shannon Cross examined me in detail both to understand the way I analyzed the game.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“So he winds up wanting to, he does all this research. He winds up developing a system that works on blackjack, okay? This is going to lead to a bunch of other opportunities in life. This might be the turning point of his life, if you think about it. But this is where he starts to meet Claude Shannon. So Claude Shannon is one of the most legendary people in history, the father of information theory. I did his biography all the way back on founders number 95. It's called A Mind at Play, if you haven't listened to that. I'd read the book too. In fact, the author of that book sent me a really nice email. Somebody, I guess, had sent him the podcast, and he's like, thanks for doing that. But I bring that up because he's one of the authors of that book. His name is Jimmy Sony. He's actually writing a book. It's going to be released in like two months, three months, something like that. And it's about the history of PayPal. I think it's a company history of PayPal. And he actually winds up interviewing all of the important people.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“He gave me a summer job at HP working on an assembly line putting together frequency counters. And this is the most important part. This is the punchline of what Steve Jobs is telling us. I have never found anyone who said no or hung up the phone. I just ask. Most people never pick up the phone and call, and that is what separates the people who do things versus the people who just dream about them. You have to act.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wedged in between my teaching duties, I mastered every detail. My excitement mounting as I strove to speed up the enormous number of calculations that lay between me and a winning system. And so this idea. Ed's like, okay, I'm going to ask no downside. I'm going to ask for help. The author could ignore me. Maybe I never get a response back to my letter, my email. Oh, I guess no email this time. My call, whatever it is, or he could actually be really beneficial. He sends me giant boxes of thousands of calculations that I can then use for my research to try to build a winning system on Blackjock. This is exactly what Steve Jobs did, direct quote from Steve. I've never found anybody that didn't want to help me if I asked them for help. I called up Bill Hewlett when I was twelve years old. He answered the phone himself. I told him I wanted to build a frequency counter. I asked him if he had any spare parts I could have. He laughed. He gave me the parts.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then he makes a very interesting observation. He says it wasn't the money that drew me to Blackjack. What intrigued me was the possibility that merely by sitting in a room and thinking, I could figure out how to win. And if you think about it, that is more true now than any other time in history that is more true now you could sit in a room and think, obviously the access to technology and the internet and all the world technology we have and figure out a way to win.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“ignorance and superstition surrounding the Blackjack table that day had convinced me that even good players didn't understand the mathematics underlying the game. I returned home intending to find a way to win. The belief that casinos must come out ahead in the long run was supported by conventional wisdom, which argued that if Blackjack could be beaten, the casinos would either”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“businesses all the different games in a casino and trying to figure out okay which one has the the greatest mathematical advantage for the player obviously they're going to all be tilted towards the house or else the game wouldn't exist if over a long period of time the house lost right and so he realizes blackjack and i think bakarab is the other one but he's going to focus on blackjack where he realizes okay this how can i develop an even greater edge and actually put the switch the the odds so instead of them being in like develop a system so the odds are switched in favor from from in favor of the casino to favor of me i'm going to read this section to you this is the the note i wrote to myself let's see if this makes any sense i may not be right but i know that you are wrong so i will use that as a starting point to find a system that is right your conventional wisdom is flawed i need to think for myself so that is the note i left to myself while i got to the section let's see what this was about i was hooked on blackjack though not in the usual sense the atmosphere of ignorance”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Knowledge is found by pursuing your genuine curiosity and passion than whatever is hot right now. Is that not a description of where we are in the book? It is. Building specific knowledge will feel like play to you, but will look like work to others. Yeah, for me, it was play. It was relaxing. Much as others might find a book or a movie, I certainly wasn't motivated by the hopes of making big money. What drew me was the chance of doing something people thought wasn't possible. Finding an edge, finding your advantage of something that Ed talks about a lot in the book, he mentions it multiple times. I'm just going to read you the short paragraph because I think this is the most concise reason why. I also believe then, as I do now, after more than 50 years as a money manager, that the surest way to get rich is to play only those games or make those investments where I have an edge. As he's theorizing on roulette, he actually takes the diversion and he realizes he's analyzing all the different bits.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he starts becoming obsessed running experiments to try to prove. Everybody says this is impossible. I believe it is. Let me see if I can figure this out. My roulette experiments diverted time from finishing my thesis and getting a full-time job. Yet for me, it was play. So I want to read founder's number 181. I did the book The Almanach of Naval Ravicant, a guide to wealth and happiness, and that's one of the main ideas in that book. I also talked, Michael, you see this a lot throughout the history of entrepreneurship. So Naval really picked up on something very foundational. Michael Jordan talks about this. I hate working, but people didn't understand that playing basketball, I was playing. And so it's work and hard work to everybody else, but I was so obsessed. I found work that felt like play. So two quotes from the book. I'm always working. It looks like work to others, but it feels like play to me. That's Naval, not Michael, although Michael said the same thing. And that's how I know no one can compete with me on it. Second quote from Naval, the almanac from Naval Ravakhan.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“So this is where he winds up meeting Richard Feynman and then he finds work that feels like play, which we've talked about a bunch on this podcast. And so says, Vivi and I were invited to a house party. We were introduced to Richard Feynman, who was playing the bongo drums. A 38-year-old professor at Caltech, he was already regarded as one of the world's most brilliant physicists. If anyone knew whether physical prediction at roulette was possible, it would be Richard Feynman, though this is going to be hilarious. I asked him, is there any way to beat the game of Roulette? When he said there wasn't, this is a funny part, I was relieved and encouraged. This suggested that no one had yet worked it out or had no one had yet worked out what I believed was possible.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“About what he has in common with his wife. We were both avid readers. We enjoyed plays, movies, and music. We both, as we both wanted, very much wanted children, we also agreed on the principles of raising them. We planned to give them all the education they wanted, teach them to think for themselves rather than simply accept received wisdom from experts and authority, and encouraged them to choose their own calling at life, both somewhat introverted we look forward to an academic life with its collection of smart, educated people, teaching, research, and travel. There would not be a lot of money, but it would be enough. What was important to us, and this is really...”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“I didn't think so, and I decided to find out. He didn't write for myself, but that's what he meant, decided to find out for myself. Fortunately, I didn't know at the time that one of the greatest mathematicians of the previous hundred years Henri Poncar, I don't pronounce English correctly, there's no way I'm pronouncing French name correctly. So says he's talking about the fact that naivete was beneficial. I didn't know that at the time one of the greatest mathematicians of the previous hundred years had quote unquote proven that physical prediction at roulette was impossible. So he also meets his wife around this time. And this is what I meant about what happened in his life. He did not, one, he couldn't have predicted. There's no way he could predict it. And number two, he was fine with just pursuing his genuine intellectual curiosity. And so they were both very similar like-minded. So they agreed, hey, we're going to pursue this academic life. We won't have a lot of money, but we're going to enjoy ourselves.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“People that are interested in learning what you've learned also happen to be people that are lifelong learners, and those are the kind of people that get themselves involved in very interesting activities in the future. Many of those interesting activities can have a financial benefit to them. So it's just wild. Anyways, I agree with the others at the table that despite all the maths to the contrary, you could beat roulette. Using what I had learned from six additional years of physics, I explained that friction would gradually slow the orbiting ball in the circular track. And so finally, gravity would be enough to cause its until the gravity would be enough to cause its spiral it to spiral down and in towards the center. I argue that an equation could forecast the ball's position during this process. Limiting the predictive power of my equations were random irregularities that cannot be forecast. With mathematicians and physicists called noise, conventional wisdom said this is the main crux of his argument, okay? Conventional wisdom said the noise was enough to ruin the”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Using that one up and one down system. And once I'm selling or writing a book, I think it was like 1964 called Beat the Dealer. This book sells millions of copies. People still buy it to this day. Then he winds up doing a follow-up when he takes a lot of the same methods of experimentation that he used on gambling in Las Vegas and applying it to financial markets. Then he writes a book called Beat the Market, a ton of super influential people that are now billionaires in present day, wind up reading his book. And so this is the importance of putting your work out there, putting your thoughts out there and sharing them because it leads to all these unexpected opportunities, right? And he winds up being like the first LP and like Citadel as a result of this, I'll go into more detail. I think I go into more detail later. The point is his thoughts were one extremely influential and two opened up real, very real positive financial opportunities for him in the future, just the fact that he spent all his time learning and then sharing what he learned.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of talk about, you know, like, and they're all math and physics-oriented people he's around. And so says, I was taking a break from studying along with a few others, someone who had been to Las Vegas was explaining how no one could beat the casinos. This was the consensus view of the group that is extremely important because Ed talks over and over again, don't accept consensus. You've got to check things out for yourself. Since I was self-taught, talks about, you know, basically I had to teach myself everything teach everything to myself rather. And as a result, I wind up just questioning everything. I need to prove for myself what you're telling me is true. So he says it was also the view of the world in general, backed up by the painful experience of generations of gambling. So you said you can't beat these games. He's going to wind up. I don't know if I've mentioned this to you already. I guess this fits into his life treated life like an adventure. He winds up coming up with a way to what Taleb was explaining to us earlier, how to count cards.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Checkups at the doctor. I try to eat fairly well. This is what I copy from right here. I weigh myself every morning and I write it down. That automatically changes my behavior. Awareness leads to change if my weight starts creeping up. I find myself eating less without even thinking about it. And I don't write it down. I put in my phone, but I'm telling you, that works. It is so easy to see when you're falling off and correct immediately before it gets out of hand. So at this point, he's in graduate school. I'm going to redo my notes about everything going on because I got a ton of highlights. Some of them I've already read to you on this page. So he's talking about the fact that there's a playground for soccers. I wrote down. This is why you must constantly strive to get better at entrepreneurship. It has very real downsides. Then it says health and fitness is mandatory. You have to take care of both. I already read that to you. And everyone said it was impossible. This peaked at interest, so he's in graduate school. People are constantly traveling from Southern California to Vegas at this point. And so there's just a lot of...”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he says, investing is like the Super Bowl. If you want a good Super Bowl team, you need a good offense and a good defense. A good defense keeps other people from taking your money. And so when he talks about like, how do you do that? He'll mention a lot of things. There's a lot of times he quotes actually Charlie Munger and Warren Buffin in the book just about the fact that, and they talk about this extensively in their talks and their shareholder letters, you know, there's a lot of shenanigans, shall we say, in the world, any kind of market. So it says the friend traveling with me was a group of was one of the group of weightlifters with whom I'd begun exercising a year earlier. It says it started one evening when as I walked by the basement furnace room, I heard the sound of iron clanking. Curiously, I ventured inside and found three muscular residents hoisting barbells. And so remember, he's like this nerd, super smart kid, academic, a lot of people would look at something like this like, oh, you're just a big waste of time. And you can think about this.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“To Ed as a young man. He's probably like 19, 20 years old, something like that. This is the first time I'd seen Las Vegas and left me with conflicting but vivid images. The glitter and glamour of the strip with its promise of easy, unearned riches contrasted with the crowd of homeless in the park, victims of the dark side of the dream. It was a memory that stuck. And this is so important I double underline the sentence. A glitzy playground where suckers were induced to gamble at games that I knew from mathematics they must collectively lose. And so a glitzy playground where suckers were induced to gamble at games they must collectively lose who was paying for the giant hotels and the beautiful pools and all the shows and so I want to read a quote that he actually came from some notes I took when he was actually promoting the book. And this talk can be found on YouTube if you just put in Ed Thorpe a man for all markets.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, this experience is actually really important because one thing I learned from Ed that I've repeated I know probably a dozen times on past podcasts is the fact that you need a good offense is how you make money and then you also need a good defense and the defense is how you how you stop other people from taking your money and a large part of this the fact that he was one of the most successful investors of all time a lot of his investing was informed by what he learned spending time trying to analyze mathematical ways to beat different gambling games And so he talks a lot about the fact that every single time where you have a human being, if there's a way to make money, the larger the stakes, the more corruption you will find. So he's like, I cannot believe how mob dubbed Las Vegas is, how corrupt all these gamblers are. I'm going to move on to investing. And then he gets to what he calls the largest casino in the world, which is Wall Street. And he's like, oh my God, this is so much more corrupt. And so he talks a lot about that in the book.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so there is a lot going on in this section. I have crazy amount of notes, and this is the first time he's going to be introduced to two things that changes life. One, this is when he goes to Las Vegas for the first time. This is like in the 1950s. So it's definitely different. It's all mobbed up, and he winds up getting poisoned, his breaks get. They mess with his brakes on his car. They try to kill him, essentially. And then the second thing is he discovers he's going to have a lifelong addiction to physical fitness. And so he says this was the first time I'd seen Las Vegas, and it left me with conflicting but vivid images. So he winds up there. They're really poor. They're doing a road trip with him and some college friends. One of the stops is Vegas. They don't have money for hotels. They don't have sleeping.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some questions. None of this would have happened if, as I wish I had done, I had asked myself beforehand. If you do this, what do you want to happen? And if you do this, what do you think will happen? I wouldn't have liked either answer. These two questions became valuable guides for me in the future. So before you make a decision, especially reacting in anger, sleep deprived, you know, this is an emotional response. If I do this, what do I want to happen? And if I do this, what do I think will happen? So those two questions became valuable guides for me in the future.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Has to do with relationships with other human beings, right? This damage his self-esteem, which I came to understand later, is an absolute no-no in human relationships unless you don't mind creating an enemy. Looking back, I realized I had always been irritated by what I viewed by what I viewed as petty, rigid mediocrities. Later, this is there's so much wisdom in what he's about to say here. Later, I would understand the stupidity of butting heads with them. He's talking about mediocre people, right? I would learn to avoid them when I could and finesse them when I couldn't. That's one of the most important sentences in the entire book. I would learn to avoid them when I could and finesse them when I couldn't. And so he wants to apologizing, doing all this other stuff because getting complaint, getting put on probation could have been kicked out of school because of this. So it says by this time the full consequences of my immaturity and bad behavior was becoming evident to me. And so this is where he comes up with a simple system. And it's just by pausing for a minute and asking you.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“He didn't go to a church. He went to like the Harry Krishner and had this gigantic. He said he had the biggest, he had one big meal a week and it was on, I think it was on Sundays, same thing, where he actually went and walked and was fed by the benevolence of somebody else. And so we see Ed's in similar circumstances here. So I want to talk about what he learns when he gets into an argument with his professor, because Professor is being real petty. Ed's still sleep deprived. He's got to work a lot in college. And so he winds up turning in a paper, and there's like a bell and it was like the bell starts ringing. Ed turns it in on the last ring in the bell, and the professor won't take it, and it's tired and he's just pissed off. And so he just starts yelling any. He yells at the professor and tells him he's a mediocre teacher. And then he realizes this is a mistake. And the reading, the reason I want to bring this to your attention is because this is a first example of Ed just developing simple systems and simple guidelines as a way to get through into Excel through life.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“and spent the money. So he spent years of being sleep deprived because he had to get up really early, have this rather robust paper out that he expanded. And then he'd have to spend all day at school. So it says her unexpected betrayal was an emotional blow that estranged us for years. And whether I could support myself at the university was now in doubt. I survived with scholarships, part-time jobs, and $40 a month for my father. I got by on less than $100 a month, including everything, books, tuition, food, shelter, and clothes. On Sundays, when the boarding house I lived in did not provide meals, I visited church open houses where I consumed large quantities of free hot chocolate and donuts interesting parallel that I just put together now as I'm rereading that section where he's like, okay, I have no money to feed myself, so I got to rely on the church or some religious institution to feed me. Steve Jobs, when he was in college, he did the same thing. I think he had to walk like six miles or eight miles across town.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Originally stayed when we visited California for the first time. So I think that was like five years. It was quite a long time before they were in Chicago. They came out to check out Southern California. They wound up living in Orange County, Newport Beach area. And so his wife, you know, friends and family, the husband of that family, and then Ed's mom wind up carrying on this affair. Her dad's obviously going to find out. And so that's going to lead to the dissolution of their marriage. And also to some really poor decision making by his mom here. In August 1949, as I was turning 17, I went off to Berkeley. The Berkeley campus of the University of California now divorced my mother sold our house, moved away, and installed my 12-year-old brother in military school. It would be several years before I saw much of either parent again. I was on my own from then on. Shortly before leaving for college, I learned that my mother had cashed the war bonds I had paid for with my paper hours.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“He thought he was just going to live his life as an academic. He's like, I'll be able to do experiments and be able to learn. I won't have a lot of money, but I'll enjoy myself. And so he's got to do all these things to try to scrounge up money. The reason I'm telling you this, he's got to scrounge up money to pay for college. And so at the very same time, his parents are going to wind up getting divorced and his mom is going to wind up betraying him. So it says that summer was especially difficult for me because my parents filed for divorce. Our house was often filled with conflict during the three years it took for the last of our ten guests to move out. My father moved to Los Angeles during my senior in high school. I saw him only on Sunday mornings. He drove 20 miles from Los Angeles and parked a block or so away. I'd come out and spent several hours with him, practicing for my driving test, going to lunch, talking, whatever. The situation with the divorce was confusing as neither parent offered any explanation. What was going on only became clear years later. My mother had been carrying on an affair with the husband of the family with whom we had”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he didn't like it. Change meant I was a troublemaker, a radical, a threat to the status quo. And so the reason I'm reading this to you is because he winds up running into these people at high school union many years and he's gives us some advice here. 46 years later, when I stopped by our high school reunion for a couple of hours, the ins, which he's going to talk about, like the social click, the popular kids, okay? Let me put that. The popular kids seem the same as they had so long ago, only older and mallower. High school had been the apex of their lives. Many had married one another and lived locally ever since, whereas for me, high school was a launching pad for life's great adventure. And so this point is a high school senior. He's doing all these things he's taking like math competitions, physics competitions, I think, chemistry competitions. His parents don't have any money. He thinks at this point, I guess until he had a large success in both gambling and he starts the first quantitative hedge fund.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“His mother is Filipino, her family winds up escaping and coming to America, and they wind up living with them. So you have 14 people in a small house, Ed's around high school age at this point. He says, American troops had liberated the survivors of my mother's family from a Japanese prison camp in the Philippines. Now my grandmother and my mother's youngest brother and two of her sisters and their families came over from the Philippines to stay with us. And there's just this tragic, crazy stories from World War II. This is one of them. They told us that my aunt Nona and her husband had been beheaded in front of their children. My grandfather had died painfully of prostate cancer in the camp just a week before liberation, having 10 extra residents packed into a house along with our family of four brought difficulties in addition to overcrowding and the economic burden of supporting them. So personality trait that Ed had even in high school is the fact that he liked to upset the status quo. He thought of himself, he's definitely a misfit.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Couple years later during World War II, his mom actually has to get a job as well. It's very common. Obviously a lot of the men went off to combat. The women would work in factories. There's like this famous meme, I guess they don't call it memes back then, but like this poster, this propaganda poster, I guess, or advertisement, whatever it is. It's Rosie the Riveter. So that was based on actual generation of women that had to construct these machines of war, his mom being one of them. My mother was a riveter on the swing shift. She worked from 4 p.m. until midnight at Douglas Haircraft. My father worked a graveyard shift at Todd's shipyards. The reason I'm telling you this is because that means he essentially was just left to his own devices, left to raise himself. My parents were usually gone or they were sleeping. They would seldom see us or each other. This left me and my brother to raise ourselves. So they never had money. It gets even worse after World War II.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Further wonders than that might be. I admired the heroes who, through extraordinary abilities and resourcefulness, achieved great things. I was introverted and thoughtful, and I may have been inspired to mirror this in my future by using my mind to overcome intellectual obstacles. And so one thing he benefited from was the fact that his father pushed him. His father didn't push him on purpose, since they just didn't have a lot of money. And so he says, though we were poor, my parents valued books and managed to buy me one occasionally. My father made challenging choices. As a result, between the ages of five and seven, I carried around adult-looking books. So as far as buying books that he'd actually want to read, and Ed's just going to have to keep up. This is, Ed grew up during the Depression, has a major effect on him and his family. It says the depression permeated every facet of our lives. Living on my father's $25 a week salary, we never wasted food, and we wore our clothes until they fell apart.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“He's saying these are the trades that happened. Thorpe went and looked, and it's like those traits never happened. So, anyways, that winds up happening like 17 years before Madoff finally admits to, I think it was the largest Ponzi scheme in history. So there's just a ton to learn from him. But the five things that I think are interesting, he's smart, he's rich, he's physically fit, he's got good relationships, and he had fun. So let's jump into his early life. The first chapter is called Loving to Learn, and he talks a lot about the importance of developing a love of reading from a very early age. By the time I turn five, I was reading at the level of a 10-year-old, gobbling up everything I could find. My parents left me very much on my own, and I responded by exploring endless worlds, both real and imagined to be found in the books that my father gave me. So he's reading, some of these are fiction books, like Gulliver's Travels, Treasure Island, and they inspire him to develop extraordinary abilities and to achieve great things. So he says, I enjoyed the vivid pictures it created in my mind and the fantastical notions that spurred me to imagine for myself”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“The very first word in the forward, if I'm not mistaken, is Ed Thorpe's memoir reads like a thriller. And so Ed's idea of just following my own intellectual, like genuine intellectual curiosity winds up intersecting with all these other, which would be soon to be famous people. So he winds up knowing Richard Feynman, the legendary physicist. He winds up being invited to dinner and invited to Warren Buffett's house when Warren's late 30s, right? dissolving the Buffett partnership and starting Berkshire Hathaway. Ed Thorpe's life intersects with Claude Shannon. After Shannon had published his legendary information theory, Thorpe winds up discovering the Bernie Madoff Ponzi scheme like 17 years before Madoff winds up. I think he discovered in like 1991, he's like, no, this guy's clearly a fraud. He wind up checking his, realizing that Madoff was making up like...”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Been in the hospital at the end of my life. Number four, he was good relationships. He was a good father. He was a good husband. He made spending time with his family and friends a priority. He got the most joy out of his life with what from the times he spent with the people he loved. He talks a lot about this in the book. And number five, just like what Nassim was mentioning in the forward, he treated life like the adventure it is. He had fun. And part of the way he had fun was he actually followed his genuine intellectual curiosity. It was a great quote by Naval Ravakant, the founder of Angelist, and he said that following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now. Ed Thorpe, if he had heard that quote, would definitely agree with it. The fact that Thorpe followed his genuine intellectual curiosity led him to this life of adventure. It also leads to several intersections of his life with, you just can't believe the stories that are in this book.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Realized before him a couple hundred years before Ed Thorpe was even born. That time is the stuff that life is made of. And so Ed wouldn't chase more money at the expense of other areas in his life after he was already really wealthy and had more money than he could ever spend. Number three, he took care of his health. He developed simple systems, and we'll talk about this today because that's part of his genius. That's what Teleb was just hinting at, the fact that he just developed simple systems for everything. One of the things he developed simple systems for is how to be healthy, to be physically fit. So he took care of his health, he developed simple systems, and he made it a priority. And he looks, if you watch an interview, there's a bunch of interviews on YouTube of him, especially when this book was coming out a couple years ago. He did a bunch of interviews to promote it. He looks 20 years younger. He's almost 90 years old. He's giving interviews. I think he's 85 at the time. And if you look at this, he looks like he's in his mid-60s. He talks about what he figured out at a young age. He's like every hour I spent exercising, I thought of as one less day that I'll”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“After the separation from his partners and the closing of his firm, for reasons that had nothing to do with him, he did not start a new megaphone. He limited his involvement in managing other people's money. But such restraint requires some intuition, some self knowledge. It is vastly less stressful to be independent, and one is never independent when involved in a large structure with powerful clients. It is hard enough to deal with the intricacies of probabilities you need to avoid the vagaries of exposure to human moods. True success is exiting some rat race to modulate one's activities for peace of mind. Thorpe certainly learned a lesson. The most stressful job he ever had was running the math department of the University of California Irvine. You can detect that man is in control of his life. This explains why he looked younger the second time I saw him in.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Money management, something central for those who learn from being exposed to their own profits and losses. Having an edge and surviving are two different things. The first requires the second, as Warren Buffett said, in order to succeed you must first survive. You need to avoid ruin at all costs. Thorpe's ideas were rejected by economists in spite of their practical appeal because of economists' love of general theories for all asset prices, dynamics of the world, etc. The famous patriarch of modern economics, Paul Samuelson, was supposedly on a vendetta against Thorpe. Not a single one of the works of these economists will ultimately survive. Strategies that allow you to survive are not the same thing as the ability to impress colleagues. So the world today is divided into two groups using distinct methods.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“Add one for some strong cards, minus one for weak ones, and nothing for others. It is mentally easy to just bet incrementally up and down, bet larger when the number is high, smaller when it is low, and such a strategy is immediately applicable by anyone with the ability to tie his shoes or find a casino on a map.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“They prefer the mouse to give birth to a mountain. It is the perception of sophistication that matters. The more complicated the better. The simple doesn't get you citations that bring the respect of university administrators, as they can understand that stuff, but not the substance of real work. Ed was initially an academic, but he favored learning by doing with his skin in the game. When you reincarnate as a practitioner, you want the mountain to give birth to the simplest possible strategy, and one that has the smallest number of side effects, the minimum possible hidden complications. Edge genius is demonstrated in the way he came up with very simple rules in blackjack. Instead of engaging in memory challenging card counting, something that requires one to be a savant, he crystallizes all of his sophisticated research into simple rules. Go to the blackjack table, keep a tally, start with zero”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source
“He estimated a typical edge of roughly forty percent per bet, but that part is easy, very easy. It is capturing the edge, converting it into dollars in the bank, restaurant meals, interesting cruises, and Christmas gifts to friends and family. That is the hard part. It is the dosage of your betting, not too little, not too much that matters in the end. For that, Ed did great work on his own before the theoretical refinement that came from a third member of the information trio, John Kelly, the originator of the famous Kelly Criterion, which is a formula for placing bets that we discussed today because Ed Thorpe made it operational. A bit more about simplicity before we discuss dosing.”
2021-12-20 · Founders · #222 Ed Thorp (My personal blueprint) · IDENTIFIED FROM THE TRANSCRIPT · source