The Kelly Criterion and small business bets

from blog Forkcasting, | ↗ original
Small businesses have less capital than larger businesses, so they need better judgement to manage that capital. A string of unlucky outcomes can wipe out a small business more easily than a larger business. We can use the Kelly Criterion to see this in action: When you don’t have a lot of capital, each “bet” takes up a larger fraction of your...