Dear- An interesting clip was found for a beginner lesson. IMHO, there might be huge profit difference in equity trading, with understanding and use of the Kelly.
Roughly at 12 min in the above clip, he is talking about compounding / at 35 min about doubling time.
Another interesting clip is Suppose profit rate is annually 20% compounded, it takes less than 4 years by 1.2^4 = 2.0736 with extra annual dividend for equity.
Voice of William Poundstone who is the author of the book http://www.amazon.com/Fortunes-Form...TF8&qid=1430647776&sr=8-4&keywords=poundstone 1) On page 99 in the book, Kelly is compared in long-term graph with Martingale and fixed. 2) On page 232, a graph explains optimal point bet in terms of Kelly.
Yes this is true if you follow kelly, you can save yourself from getting affected from the bankruptcy. And these video tutorials are also supportive in the better understanding.
Maybe, among all the strategies with NO possible bankrupcy, Kelly might be the best rewarding, in terms of long-term compounding. The book explains in detail, page 99 and page 232. However, since Kelly does not asks margin and leverage, long-term profit is NOT as much as many traders (probably stupid 90% traders) expected. There might be a better strategy than Kelly. If you think so, tell me now.