(I could make the spreadsheet for you but you can probably guess that it's going to be -99.999999999%)
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if you do _one single simulation of it_ then the median result will be very negative returns!
but in fact the expected arithmetic mean of annualized returns is positive!
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But really a lot of my point is:
twitter.com/danrobinson/st
what you said there was literally false.
what you _meant_ may have been true!
But your whole point was some weird gotcha schtick involving a sentence you thought sounded bad for me.
and actually it sounds bad for you!
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Replying to @SBF_FTX @SBF_Alameda and 3 others
How do I try to learn what some fund's expected returns are? I'll probably at least look at historical returns, right? (NOT 
INVESTING ADVICE)
Suppose there is 50 years of history. I compute historical returns by averaging the actual annual returns, right?
INVESTING ADVICE)
Suppose there is 50 years of history. I compute historical returns by averaging the actual annual returns, right?1
"averaging the actual annual returns"
should have been "geometric"
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It's true regardless of whether you use arithmetic or geometric, right?
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Replying to @SBF_FTX @SBF_Alameda and 3 others
OK, and you're saying that arithmetic mean of annual returns is appropriate?
What happens if you flip the coin not once a year, but once a day? Even faster growth in EV(wealth), right?
But what happens to your arithmetic mean of annualized returns?
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Nope!
The EV of the arithmetic mean of your annual returns goes up the more you can flip because each flip is positive EV.
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The tweet you're referring to never says EV, right? It is talking about what you do when you compute the historical average of returns.
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Replying to @SBF_FTX @SBF_Alameda and 3 others
How do I try to learn what some fund's expected returns are? I'll probably at least look at historical returns, right? (NOT INVESTING ADVICE)
Suppose there is 50 years of history. I compute historical returns by averaging the actual annual returns, right?
INVESTING ADVICE)
Suppose there is 50 years of history. I compute historical returns by averaging the actual annual returns, right?1
If you arithmetically average the annual returns, it is extremely likely that 99% company will have a better # than kelly company
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Only if you only flip the coin once a year.
If you flip the coin once a day, then the arithmetic mean returns will almost always be worse, right?
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nope!
will almost always still be better
er sorry actually could you describe the coin that you're saying I'm flipping once per day?
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