I thought what I was saying was quite a bit different. If one is using the Kelly Criterion, one needs to know what the probability of winning and odds paid for a win. Traders generally don't know these at all and only can find them out by making the trade and seeing what happens.
Of course when the Kelly Criterion is known and constant, one can make the optimal bets and get rich, but those situations don't exist in real life (unless there is some kind of monopoly or external force being used to make people take the other (loosing side) of the bet). The iterative thinking of the the Kelly Criterion must be part of a traders mindset, but markets never understood well enough to where this formula can be strictly applied.
A bit strange to see Taleb talk about a casino situation to explain his thinking. Elsewhere he mocks such "casino odds" view of the world as very unrealistic an bemoans that such a view will cause one grief if you use those ideas with "skin in the game".
ps. I've only read "Anti-Fragile" and some of his blog essays.
Of course when the Kelly Criterion is known and constant, one can make the optimal bets and get rich, but those situations don't exist in real life (unless there is some kind of monopoly or external force being used to make people take the other (loosing side) of the bet). The iterative thinking of the the Kelly Criterion must be part of a traders mindset, but markets never understood well enough to where this formula can be strictly applied.
A bit strange to see Taleb talk about a casino situation to explain his thinking. Elsewhere he mocks such "casino odds" view of the world as very unrealistic an bemoans that such a view will cause one grief if you use those ideas with "skin in the game".
ps. I've only read "Anti-Fragile" and some of his blog essays.