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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?

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Which sentence is false?

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@GaussianProcess

"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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@GaussianProcess

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?

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Replying to

@GaussianProcess

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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@GaussianProcess

nope! will almost always still be better

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Describe the coin?

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@GaussianProcess

er sorry actually could you describe the coin that you're saying I'm flipping once per day?

5:09 AM · Dec 4, 2020Twitter Web App

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I might have been making different assumptions than you.

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Thought you were referring to this coin, which you said you would bet 99% on

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Replying to @danrobinson @GaussianProcess and 2 others

whatever, take your pick. for instance: let's say you wager X to win X (so even odds) but it's a 60/40 weighted coin. I claim that wagering 99% of your money each year produces pretty a pretty good average of your yearly returns.

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