initial commit

README.md

@@ -1,2 +1,27 @@
 # kelly-paper-experiment
 
+If you start with $100 balance, and you make a bet with a 70% chance of winning.  If you win, you get $80.  If you lose, you lose $80.  
+
+Do you take the bet?  Even more interesting, if you could keep repeating this bet over and over again, always betting 80% of your balance, should you do it?  
+
+It makes sense, right, the odds are in your favor!  
+
+### The actual answer - if you want to go broke, then yes
+
+This blew my mind, how counter-intuitive the answer to this question actually is.  
+
+This program runs 16 simulations where you start with a balance of 100 currencies.  You make consecutive bets, always betting 80% of your total balance with a 70% chance of winning each bet.  It then reports the results after ONLY 200 bets.  The result is the percentage of your returns (your end balance divided by your starting balance).
+
+In other words, given enough time, we're all screwed.  
+
+### Reference Video
+
+[![IMAGE ALT TEXT HERE](https://img.youtube.com/vi/91IOwS0gf3g/0.jpg)](https://www.youtube.com/watch?v=91IOwS0gf3g)
+
+
+### How to build this program yourself
+
+1. Install go - https://golang.org/dl/
+2. Clone - git clone https://deadbeef.codes/steven/kelly-paper-experiment.git
+3. Build - cd kelly-paper-experiment && go build .
+

main.go

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+package main
+
+import (
+	"fmt"
+	"math/rand"
+	"time"
+)
+
+func main() {
+	rand.Seed(time.Now().UTC().UnixNano())
+
+	var balance, investedPercentage, winningPercentage float64
+	balance = 100
+	investedPercentage = 0.80
+	winningPercentage = 0.70
+	discreteCompoundingPeriods := 200
+	numSimulations := 16
+	outputChannel := make(chan float64)
+
+	for i := 0; i < numSimulations; i++ {
+		go simulation(balance, investedPercentage, winningPercentage, discreteCompoundingPeriods, outputChannel)
+	}
+
+	for i := 0; i < numSimulations; i++ {
+		fmt.Println(<-outputChannel)
+	}
+
+}
+
+func simulation(startingBalance, investedPercentage, winningPercentage float64, discreteCompoundingPeriods int, outputChannel chan float64) {
+	balance := startingBalance
+	for i := 0; i < discreteCompoundingPeriods; i++ {
+		investedAmount := balance * investedPercentage
+		if rand.Float64() <= winningPercentage {
+			// you win
+			balance += investedAmount
+		} else {
+			// you lose
+			balance -= investedAmount
+		}
+	}
+	outputChannel <- (balance / startingBalance)
+}