Investment Betting Algorithm

Abstract

All bettors, including the ”House,” experience losing streaks and winning streaks. The House typically has a ”bankroll” that is orders of magnitude larger than that of any individual bettor, and so can survive losing streaks without going bankrupt, thus remaining solvent long enough to win. Online wagering provides a new twist to this age-old scenario. We use elementary mathematical principles together with the idea of a virtual infinite sample size and the elimination of time as a constraint to develop a fail-proof system that generates the greatest possible exponential growth of capital. Let σ (stake) be the amount you wish to invest or wager each time and ρ (return) be your return or odds on a proposition. Let n (number) be the sum of consecutive loosing investments or number of times you can loose on an identical proposition before depleting a specified amount of investment capital called β ( bankroll). The resultant equation, which I call the : Investment Betters Algorithm (click on thesis to view) provides the answer to remaining solvent long enough to outlast the irrationality of the simulated online ” wagers open market ” through a geometric progression. The augmented bankroll β , calculated slightly higher than the typical sum of the Geometric Series, can serve as a safeguard to capital ruin by it extreme disproportion to. Consider further the expected value of even money propositions, a virtual infinite sample size, and the elimination of time as a constraint and you have a no fail system to generate the greatest progressive exponential growth of capital. Current problems associated with financial return optimization algorithms are identified and discussed. Probable solutions to those problems are also prescribed along with improvements to diversified portfolio design.