Ed Thorpe is a mathematical genius, but his approach to life is what most impresses me.
Ed Thorpe is a beacon to me. I finished his autobiography last week. He offers a great personal blueprint for living your life. If these highlights inspire you, I urge you to read the entire book. Ed has so much to offer.
I had not known of Ed Thorpe until 2021. He is the first modern mathematician to investigate risk and achieve great financial success doing so. He devised ways to beat the casinos in blackjack and roulette. Later, he used similar techniques to win at investing with his hedge fund, Princeton Newport Partners.
His mathematical perspectives on investments underpin the fastfollowinvestor.com investing strategy. And the book details it in a way we can all understand.
But, Ed’s approach to life serves up even more lessons.
In A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market, Ed takes us on his journey from depression-era Chicago to MIT to mafia-controlled Las Vegas and finally Wall Street. Then, suddenly, he casts all of his professional success aside.
At its core, this is a book about how to live your best life.
“What matters in life is how you spend your time. Life is like reading a novel or running a marathon. It’s not so much about reaching a goal but rather about the journey itself and the experiences along the way.”
Ed learned from Benjamin Franklin (another favorite of mine) who became financially independent at 42 years old. It was Franklin who said:
“Time is the stuff life is made of, and how you spend it makes all the difference."
Franklin followed his own interests in his next 42 years, and his accomplishments are remarkable.
Ed Thorpe advises that we:
- Stay independent and in control of our lives
- Keep humble
- Be great, not grand (Don’t get big for big’s sake.)
- Strive for simplicity
- Develop systems for everything in life
On investing, Ed believes in finding a simple edge and betting on yourself. At the same time, you must control the size of your bets to cap any losses.
- “I also believed then, as I do now after more than fifty years as a money manager, that the surest way to get rich is to play only those gambling games or make those investments where I have an edge.”
- “A good defense keeps other people from taking your money. As Warren Buffett said: ‘In order to succeed you must first survive. You need to avoid ruin. At all costs.’.”
In the book, Ed clarifies these points with a sports analogy. The very best teams have both a very good offense and a very good defense. Neither has to be the best, but both must be strong to win championships.
I’d like to close by giving Ed the last words:
“When Princeton Newport Partners closed, Vivian (Ed’s wife) and I had money enough for the rest of our lives…. it freed us to do more of what we enjoyed most: spend time with each other and the family and friends we loved, travel, and pursue our interests.
Taking to heart the lyrics of the song “Enjoy Yourself (It’s Later than You Think),” Vivian and I would make the most of the one thing we could never have enough of—time together. Success on Wall Street was getting the most money. Success for us was having the best life.
Whatever you do, enjoy your life and the people who share it with you, and leave something good of yourself for the generations to follow. "
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Founder’s podcast Ed Thorpe episode
A dozen lessons from Ed Thorpe blog
Nassim Taleb’s book forward on Medium