A demonstration of the expected value of running small bets over time.
Inspired by this excellent lecture on Economics by Dr Ole Peters:
https://www.youtube.com/watch?v=f1vXAHGIpfc
And the following tweet by @dvassallo:
https://twitter.com/dvassallo/status/1247673475658964992
Conclusion:
To win over time and have a positive expected value on your investments
(be it with time or money):
- Run many iterations / experiments
- Study your investment to minimize the loss in each bet
- Each bet must be small (little leverage) and have a big potential upside
Over time, your success is inevitable.