Typo corrected,New theories!!!

Made a repost to mathprof with typos corrected regarding a mathematic to show that increasing ROR may be desirable if offset by greater increase in utility function. Based on my idea of combining CAPM in Finance with the life cycle investment theory in Economics:

"I believe the failure rate for start-up small business is very high. I forget the statistic, but I think it was something like 90%. That is, most people who start their own business fail. People who start with a high RoR may actually be at less risk than those who start conventional business."

You're comparing AMATEUR entrepreneurs with PROFESSIONAL Bj players. The rational expectation theory applies to neither, not all players and business guys are equal. There specialty is different too, put an oil tycoon to run casinos and ev changes. You cannot calculate ROR without a confident ev estimation.

"BTW, I like you suggestion of increasing your bets as your bank increases, but at a slower rate, so that your betting fraction decreases."

I suggested this before with by combining CAPM model in finance with the life cycle investment theory. Reference is my debate about Markovs chains and Brownian diffusion with "The Mayor", post titled "Graduating from Blackjack". Which was another innovation regarding random walk in Market behaviours. Maybe nobody understood me. Back to the original problem, I have the paper with the mathematical proofs to show that increase ROR/can improve DI (desiribilty ratio of risk/reward) offsetting decrease in Utility function. Could be useful for professionals.

And to Clarke Cant: Yes, I speak Kantonese and Cantonese, you can talk to me. (smile)

That the simple observation of the pit seeing you increase bets with significant wins, appears to show you have the emotional involvement that a ploppie has with his results. The same is noticable in the stock markets, in that this boosts confidence in your results amoung other investors. Appearing to bet with a high fraction of the Kelly unit, brings allies and fits you into cover patterns. Simple!!!!!!!!!!!!

You are dealing with random walk models that are based on what can be termed coupling effects, and what is not only the risk/return ratio, but the optimal participation in a market. Another way to put it is you are trying to find the fraction of one's capital that one should invest relative to the size of the total market you are investing in, without realizing it. Still another way to put it is that you are not trying to find the optimal Kelly fraction, you are trying to find how big a fish you should be relative to the size of the pond.

I was just pointing out you don't have to consider these factors to also have situations where it is more profitable to bet a higher fraction, so that other's perceptions of how invested you are bring extra profits.