Edward O. Thorp

Ed ThorpEdward ThorpThorpEdward O ThorpThorp, Edward O.
Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack player.wikipedia
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Blackjack

21Black Jackbasic strategy
Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack player. Thorp used the IBM 704 as a research tool in order to investigate the probabilities of winning while developing his blackjack game theory, which was based on the Kelly criterion, which he learned about from the 1956 paper by Kelly.
Ed Thorp would use Baldwin’s hand calculations to verify the basic strategy and later publish (in 1963) his famous book Beat the Dealer.

Wearable computer

wearable computingwearableswearable
He also developed and applied effective hedge fund techniques in the financial markets, and collaborated with Claude Shannon in creating the first wearable computer.
In 1961, mathematicians Edward O. Thorp and Claude Shannon built some computerized timing devices to help them win at a game of roulette.

Claude Shannon

ShannonClaude E. ShannonC.E. Shannon
He also developed and applied effective hedge fund techniques in the financial markets, and collaborated with Claude Shannon in creating the first wearable computer. In addition, Thorp, while a professor of mathematics at MIT, met Claude Shannon, and took him and his wife Betty Shannon as partners on weekend forays to Las Vegas to play roulette and blackjack, at which Thorp was very successful.
He is also considered the co-inventor of the first wearable computer along with Edward O. Thorp.

Card counting

card countercounting cardscard counters
Thorp is the author of Beat the Dealer, which mathematically proved that the house advantage in blackjack could be overcome by card counting.
American mathematician Edward O. Thorp is considered the father of card counting.

IBM 704

704address registerIBM704
Thorp used the IBM 704 as a research tool in order to investigate the probabilities of winning while developing his blackjack game theory, which was based on the Kelly criterion, which he learned about from the 1956 paper by Kelly.
Edward O. Thorp, a math instructor at MIT, used the IBM 704 as a research tool to investigate the probabilities of winning while developing his blackjack gaming theory.

Roulette

roulette wheelAmerican Roulettebetting wheel
In addition, Thorp, while a professor of mathematics at MIT, met Claude Shannon, and took him and his wife Betty Shannon as partners on weekend forays to Las Vegas to play roulette and blackjack, at which Thorp was very successful.
Edward O. Thorp (the developer of card counting and an early hedge-fund pioneer) and Claude Shannon (a mathematician and electronic engineer best known for his contributions to information theory) built the first wearable computer to predict the landing of the ball in 1961.

Princeton Newport Partners

Princeton/Newport Partners
Thorp's first hedge fund was Princeton/Newport Partners.
Princeton/Newport Partners (P/NP) was an early alternative investment management company founded by pioneering mathematical financier Edward O. Thorp in late 1974.

Blackjack Hall of Fame

His achievements have led him to become an inaugural member of the Blackjack Hall of Fame.
Edward O. Thorp, 2002, author of the 1960s classic Beat the Dealer

Scott Patterson (author)

Scott PattersonPatterson, Scott D.Scott Paterson
* Patterson, Scott D., The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, Crown Business, 352 pages, 2010.
His coverage has included high-profile interviews with Mark Cuban, Warren Buffett, Edward Thorp and others.

Manny Kimmel

Thorp started his applied research using $10,000, with Manny Kimmel, a wealthy professional gambler and former bookmaker, providing the venture capital.
He is also known for his early forays into card counting in blackjack in the early fifties as "Mr. X" in the classic book on card counting, Beat the Dealer by Edward O. Thorp.

Hedge fund

hedge fundshedge fund managerhedge-fund
Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack player. He also developed and applied effective hedge fund techniques in the financial markets, and collaborated with Claude Shannon in creating the first wearable computer.

Probability theory

theory of probabilityprobabilityprobability theorist
He pioneered the modern applications of probability theory, including the harnessing of very small correlations for reliable financial gain.

Correlation and dependence

correlationcorrelatedcorrelate
He pioneered the modern applications of probability theory, including the harnessing of very small correlations for reliable financial gain.

Casino game

Casinohouse advantagehouse edge
Thorp is the author of Beat the Dealer, which mathematically proved that the house advantage in blackjack could be overcome by card counting.

Financial market

financial marketsmarketmarkets
He also developed and applied effective hedge fund techniques in the financial markets, and collaborated with Claude Shannon in creating the first wearable computer.

University of California, Los Angeles

UCLAUniversity of CaliforniaUniversity of California at Los Angeles
Thorp received his Ph.D. in mathematics from the University of California, Los Angeles in 1958, and worked at the Massachusetts Institute of Technology (MIT) from 1959 to 1961.

Massachusetts Institute of Technology

MITMassachusetts Institute of Technology (MIT)M.I.T.
Thorp received his Ph.D. in mathematics from the University of California, Los Angeles in 1958, and worked at the Massachusetts Institute of Technology (MIT) from 1959 to 1961.

New Mexico State University

New Mexico StateNew Mexico A&MNMSU
He was a professor of mathematics from 1961 to 1965 at New Mexico State University, and then joined the University of California, Irvine where he was a professor of mathematics from 1965 to 1977 and a professor of mathematics and finance from 1977 to 1982.

University of California, Irvine

UC IrvineUCIUniversity of California at Irvine
He was a professor of mathematics from 1961 to 1965 at New Mexico State University, and then joined the University of California, Irvine where he was a professor of mathematics from 1965 to 1977 and a professor of mathematics and finance from 1977 to 1982.

Professor

chairuniversity professorProf.
He was a professor of mathematics from 1961 to 1965 at New Mexico State University, and then joined the University of California, Irvine where he was a professor of mathematics from 1965 to 1977 and a professor of mathematics and finance from 1977 to 1982.

Kelly criterion

Kellyprofit maximally
Thorp used the IBM 704 as a research tool in order to investigate the probabilities of winning while developing his blackjack game theory, which was based on the Kelly criterion, which he learned about from the 1956 paper by Kelly.

Fortran

FORTRAN 77FORTRAN IVFortran 90
He learned Fortran in order to program the equations needed for his theoretical research model on the probabilities of winning at blackjack.

Playing card

playing cardscardscard
Thorp analyzed the game of blackjack to a great extent this way, while devising card-counting schemes with the aid of the IBM 704 in order to improve his odds, especially near the end of a card deck that is not being reshuffled after every deal.

Reno, Nevada

RenoReno, NVNevada (Reno)
Thorp decided to test his theory in practice in Reno, Lake Tahoe, and Las Vegas.

Lake Tahoe

TahoeNorth Lake TahoeLake Tahoe, California
Thorp decided to test his theory in practice in Reno, Lake Tahoe, and Las Vegas.