14th November 2005, 04:10 PM
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Member
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Join Date: Jan 1970
Location: Sydney
Posts: 402
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Quote:
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Originally Posted by Duritz
System A has a 22% s/r, ave div $4.80. What's the % of bank you should outlay and be safe?
System B has a 6% strike rate, ave div $17.20. What's the % of it you should outlay and be safe?
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I'm amazed that no one here has supplied the one and only correct solution.
The Kelly Criterion says Edge/Odds.
If you believe in the long-term consistency of the systems:
System A: Edge=5.6%
Stake = 1.47% (=5.6/3.8%)
System B: Edge=3.2%
Stake = 0.1975% |