Edward O. Thorp was born in 1932 in Chicago and grew up during the Great Depression. From an early age, he questioned everything and preferred to test ideas for himself. He taught himself math and science, set up home laboratories, and ran chemistry experiments that occasionally ended in small explosions. That habit of thinking independently shaped his entire life.
Thorp earned a PhD in mathematics and became a professor. While teaching at MIT, he used an early computer to prove that blackjack could be beaten by keeping track of the cards already played. He teamed up with legendary scientist Claude Shannon to build one of the first wearable computers, designed to predict where a roulette ball would land. Then he went to Las Vegas and tested his theories with real money. His 1962 book, Beat the Dealer, became a bestseller and forced casinos to change their rules.
Thorp soon realized that the biggest casino in the world was Wall Street. He applied the same mathematical thinking to the stock market, developing ways to hedge risk that were years ahead of their time. In 1969, he launched one of the first quantitative hedge funds, which delivered strong, steady returns for nearly two decades. He was also one of the first to spot that Bernie Madoff’s results didn’t add up, years before the fraud collapsed.
His memoir, A Man for All Markets, tells the story of a life spent testing conventional wisdom, managing risk, and valuing time and freedom over simply making more money.
Edward O. Thorp’s story is covered in Deeply Driven Episode #2.
Source Book
A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market
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