Book Reviews, Economics

A Man For All Markets

A Man For All Markets is Edward O. Thorp’s autobiography. I was looking forward to reading that book I wasn’t disappointed. Even though he is an icon, Edward O. Thorp might not be familiar name, so who is he? Thorp was an absolute intellect that despite his success he managed to stay under the radar. He didn’t subscribed to widely accepted views such as you can’t beat casinos or Wall-Street and he did. The first half of the book is his story. The 2nd half is filled with advice and insights. Plus Nassim Taleb wrote the foreword. So what are some of Thorp’s accomplishments?

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  • Thorp figured out how to win at blackjack using card counting. Check. Thorp published the classic book Beat the Dealer. That book launched a revolutions in Vegas. If you like this kind of stuff you will love Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions. These MIT guys took Thorp’s strategies and feed it roids.
  • Thorp then built the world’s first wearable computer and used it again to beat the house at roulette. Check. The computer used physics to calculate the momentum of a roulette wheel.
  • Play bridge with Warren Buffett. Check.
  • Thorp discovered what is known today as the Black-Scholes option formula, before Black and Scholes. Check.
  • Discovered that Bernard Madoff was a cheat in 1991. Check. Madoff got busted in 2008.
  • Beat Wall-Street. Check. Then wrote Beat the Market (Out of print, copies are going for $700+). He was the first modern mathematician who successfully used quantitative methods for risk taking.

This is a story of Thorp’s odyssey in science, mathematics, hedge funds, finance and investing. Thorp is not a guy that’s after money or fame. He is a very wealthy man but if he wanted to he could have been extravagantly more wealthy. To preserve his quality of life and to spend more time with his family, he decided not to pursue a number of very profitable business ventures. He like the exploration of ideas. He likes to solve problems. He like mental challenges. That’s what fuels him to beat the dealer and Wall-Street.

Thorp is 85 years and still very sharp. You can listen to him on Masters in Business podcast: Ed Thorp, the Man Who Beat the Dealer and the Market. He reminds me a lot of Buffett and Munger. They might be in their 80s and 90s, but their brain haven’t display any sign of aging.

This is a great book. Read it. Give it. Share it. Enjoy it.

Article by Brian Langis