What is Ed Thorp referring to in Fortune's Formula?

[vistaplayer]

This is from the book "Fortune's Formula" by William Poundstone. Ed Thorp talks about an opportunity he has discovered:

"something available in the Eastern Hemisphere," that can take a million-dollar bankroll. "You can make about $2,000 an hour, but it's work. If I could figure out how to make it better, it would be a lot of fun. I've got a whole theory worked out, and nobody else anywhere knows this theory. The people who operate this gambling situation have no clue."

Anyone know what game Thorp is talking about?

[cardcounter0]

My guess would be deeply dealt baccarat.

[Terry]

Baccarat is normally dealt very deep. The cut card is typically placed with 14 cards beneath it so there are always enough cards for one more hand when the cut card comes out. Even so, count systems don’t identify enough good situations to make it worthwhile.

The “$2,000 an hour” tends to make me think he’s talking about something to do with sports betting or maybe horse racing ... something where there is a lot of money and a lot of data and the opportunity to “guess” better than the general public.

I think I need to withdraw that ... "Eastern hemishphere" ... hmmm

[other1]

Pai gow is the only thing that comes to mind gamblingwise that would be 'eastern hemisphere'-centric.

The wording he uses is very strange and has to be chosen for a reason. "The people who operate this /gambling situation/"

Not 'game'.. not 'lottery'.. not 'casino', but 'gambling situation'. Makes me think its something less conventional than a casino game or some kind of sports betting (like horses which were mentioned). Maybe some sort of market or commodity speculation? Seems strange to talk about that in terms of an hourly winrate though.

[vistaplayer]

I doubt it's horse racing as the book already mentions that big syndicates have made millions at the Hong Kong racetracks. I wonder if maybe Thorp and Poundstone are just having a little bit of fun here. Why would Thorp want to draw attention to a potentially lucrative situation that only he knows about?

[Martin]

Wasn't he doing something with the Japanese Options market? My guess would be exploiting market inefficiency somehow.

[Shaggy]

I agree. Thorp may be best known in the gambling circles for his contributions to blackjack, but he has made multimillions in the stock market with his "hedgefund". I believe I heard somewhere that he is worth 400 million. My guess is that it is market related as well. He wrote a book some time ago called <u>Beat the Market</u> .

-Shaggy

[SheetWise]

For a million-dollar bankroll to make $2,000 an hour it would have to a huge inefficiency.