A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market Hardcover – January 24, 2017

“A Man for All Markets” is at its core a captivating memoir on how Professor Thorp managed to acquire a fortune estimated at around $800-million. It’s dense, it’s detailed, it’s engagingly written, it’s a lot of fun to read and it’s full of valuable information. I would love to have read the chapters on markets some years ago when I was an active trader. I’d have made a lot more money!How did he do it? “Education,” he explains in a later chapter.He either taught himself or he learned from others. Indeed Chapter 1 is entitled “Loving to Learn.” He began as a poor boy in Lomita, California delivering newspapers in the morning and in the afternoon. He got into UCLA and graduated with a degree in physics and then went on to grad school to study mathematics. He became fascinated with challenges, most famously with the gambling card game, blackjack or twenty-one. He devised a point count system that, coupled with his ability to remember cards, allowed him to beat the casinos at their own game.And then he wrote a bestselling book, “Beat the Dealer” showing others how it could be done. I read that book when it came out in the early Sixties and was fascinated. Because my memory is only average I ended up playing poker instead of blackjack--but that’s another story.Following up on his success at twenty-one, Thorp, along with Claude Shannon, designed and built a mechanical and electrical device that allowed them to gain an advantage in roulette by predicting with some proficiency approximately where the bouncing ball would end up. That was quite a coup especially considering that it happened fifty-some years ago.This takes us through the first ten chapters. Then in Chapter 11: “Wall Street: The Greatest Casino on Earth” Thorp turns his attention to the financial markets. The titles of the next 14 chapters not only outline the story but could serve as something like a syllabus for a graduate course in investing. Viz., “Front-Running, The Quantitative Revolution, Swindles and Hazards, Buying Low, Selling High, Hedging Your Bets, Compound Growth, Beat Most Investors by Indexing, Asset Allocation and Wealth Management, etc.”There’s an illuminating chapter on financial crises and lessons not learned. Thorp concludes with Chapter 30 “Thoughts,” which I found fascinating. There are also five appendices, three on inflation and the dollar, historical returns, and the performance of his fantastically successful hedge fund, Princeton Newport Partners.I think it is important in accounting for Thorp’s extraordinary success to realize that he was very good with people and formed valuable friendships with knowledgeable and gifted persons including the afore-mentioned Claude Shannon, Warren Buffet and others. Additionally, his curiosity and love of challenges took him places others couldn’t go. Finally, there was the loving support of his very talented wife, Vivian. If I were giving out advice on how to be successful in this world I would say first pick your spouse wisely.Also, Thorp was thrifty. On page 86 we learn that when he was playing blackjack in Las Vegas he would call his wife collect and to save money would ask for “’Edward __ Thorp,’ the middle initial being a code we had devised to tell how many thousands of dollars we were ahead or, if the initial came before ‘Edward,’ how many behind…” “After hearing the name of the person being called, Vivian would politely tell the operator that Mr. Thorp ‘wasn’t here at the moment.’”I think it is a good lesson to understand that not only is a penny saved a penny earned but it’s worth more than that because what’s saved is untaxed and the money can be invested. Thorp elaborates on the value of thrift in building wealth elsewhere in the book especially on page 269.I want to say that I have a personal affinity for both this book and its author because of some similarities in the lives we have led. For those interested see my recently published memoir “If I Had Been a Better Man.”Okay now for some tidbits from the amazing professor of gambling and markets.“Joseph Heller and Kurt Vonnegut were at a party given by a billionaire…Vonnegut asked Heller how it felt to know that their host might have made more money in one day than Heller’s “Catch-22” since it was written.” Heller replied that “he had something the rich man could never have.” Vonnegut wondered what that might be, and Heller answered, “The knowledge that I’ve got enough.” (p. 213)Thorp actually discovered in 1991 that Bernie Madoff’s trades were fakes and that he was running a Ponzi scheme. See pages 213-219.A joke: “…pronounced MADE-off, as in “with your money.” (p. 217)If you haven’t heard of the so-called “secretary/marriage problem” in math turn to page 224. The problem is when to say yes to get the best candidate. Once you say no you usually don’t get another chance and you may find the remaining candidates not as good. On the other hand, if you say yes too soon you might miss the best choice.Thorp’s answer to high frequency trading: “a small federal tax…a few cents a share…” (p. 231)On the crisis in funding for the California university system: “To starve education is to eat our seed corn. No tax today, no technology tomorrow.” (p. 341)--Dennis Littrell, author of “The World Is Not as We Think It Is”

Read full summary of this book on my blog: imeducatingmyself.com/a-man-for-all-markets-from-las-vegas-to-wall-street-how-i-beat-the-dealer-and-the-market-by-edward-o-thorp-book-reviewThe life of the Edward was quite interesting, and full of ups and downs – but in the end it turn out be everything good. I really enjoyed reading this book, it does contain a lot of useful material which we can apply to our lives.I bought this book because was interested to learn about Edward’s investing strategy. And there are useful material when it comes to investing, but it’s not for absolute beginners. If you don’t know anything about investing, than you might find this book a bit confusing. I like how he played the both sides of investing; buying and shorting stocks. Even though I have to say that I’m not a fan of shorting stocks, it does require a lot of analysis and experience to get it right; I’ve done it couple of times, and it didn’t turn right for me.But in the end, since he had been in contact with Warren Buffett, he does apply the long-term value investing. And when you go through a lot of methods of trading, majority of investors would agree that this is the best way. But, nevertheless, it does require a lot of research and investigating about particular stock(s) in which you are going for the long-term.I wasn’t very interested in that part of the book that talks about Blackjack, because I’m not interested in playing cards, or anything similar. If you are someone who is interested in cards, you can find useful information on how Edward developed his card counting method.One thing about the gambling I like that, he didn’t end up addicted to gambling, and it didn’t destroyed his family. That is very important that he knew when to stop playing and move to something else. It was successful experiment, and that was all.One thing that got me, positively of course, is his life with Vivian. The greatest thing that can happen to anyone is to have great life companion. Of course, I believe that they’ve had some problems, that is normal – but overall, everything went well for a long time. And from that I conclude that two great minds can make a lot of things possible.This book is also good for those who are looking to motivate them self in life. Maybe your’re not interested in card ( I know I’m not), nor investing, but just getting through the book and getting familiar with Edward’s life, and how he was determined to succeed in life – I know my motivation was raising up reading the book.

The author is brilliant and offers his story along with lessons learned and advice that is relevant even today, or rather, especially today.Worth the read for those who interact with the financial world.