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At a bare minimum, understanding entails being able to detect an internal contradiction: a paradox.

William Poundstone

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William Poundstone
Age: 69
Born: 1955
Born: March 29
Author
Biographer
Journalist
Internals
Internal
Paradox
Minimum
Contradiction
Understanding
Entails
Able
Detect
Bare

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A bit is worth 10,000 basis points.
William Poundstone
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Bernoulli's real contribution was to coin a word. The word has been translated into English as utility. It describes this subjective value people place on money.
William Poundstone
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Carl Friedrich Gauss, often rated the greatest mathematician of all time, played the market. On a salary of 1,000 thalers a year, Euler left an estate of 170,587 thalers in cash and securities. Nothing is known of Gauss's investment methods.
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The story of the Kelly system is a story of secrets - or if you prefer, a story of entropy.
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There is a deep connection between Bernoulli's dictum and John Kelly's 1956 publication. It turns out that Kelly's prescription can be restated as this simple rule: When faced with a choice of wagers or investments, choose the one with the highest geometric means of outcomes.
William Poundstone
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The ultimate compound return rate is acutely sensitive to fat tails.
William Poundstone
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There were many at Bell Labs and MIT who compared Shannon's insight to Einstein's. Others found that comparison unfair - unfair to Shannon.
William Poundstone
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Are there any mythical beasts which aren't simple pastiches of nature? Centaurs, minotaurs, unicorns, griffons, chimeras, sphinxes, manticores, and the like don't speak well for the human imagination. None is as novel as a kangaroo or starfish.
William Poundstone
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Your second ducat, like your second million, is never quite as sweet.
William Poundstone
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The engine driving the Kelly system is the law of large numbers. In a 1713 treatise on probability, Swiss mathematician Jakob Bernoulli propounded a law that has been misunderstood by gamblers (and investors) ever since.
William Poundstone
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People tend to be clueless about prices. Contrary to economic theory, we don't really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility, he says. We make do with guesstimates and a vague recollection of what things are “supposed to cost.”
William Poundstone
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Use entropy and you can never lose a debate, von Neumann told Shannon - because no one really knows what entropy is.
William Poundstone
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Samuelson spotted a mistake in Bacheliers work. Bachelier's model had failed to consider that stock prices cannot fall below zero.
William Poundstone
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The assumption that anything true is knowable is the grandfather of paradoxes.
William Poundstone
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In real conversations, we are always trying to outguess each other.
William Poundstone
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Kelly was aware that there is one type of favorable bet available to everyone the stock market.
William Poundstone
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The more improbable the message, the less compressible it is, and the more bandwidth it requires. This is Shannon's point: the essence is its improbability.
William Poundstone
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Average isn't so hot at the race track given those steep track takes. Average is pretty decent for stocks, something like 6 percent above the inflation rate. For a buy-and -hold investor, commissions and taxes are small.
William Poundstone
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The best paradoxes raise questions about what kinds of contradictions can occur-what species of impossibilities are possible.
William Poundstone
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Expectation is a statistical fiction, like having 2.5 children.
William Poundstone