Which sentence is false?
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"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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er sorry actually could you describe the coin that you're saying I'm flipping once per day?
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I might have been making different assumptions than you.
Thought you were referring to this coin, which you said you would bet 99% on
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yes but what does it mean to "flip that coin once per day"?
I was assuming it was 60% of 99%, 40% of -99% each flip
is it still that, so it's +- 99% per day?
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Are you saying that I take the same coin that gives 60% +99%, 40% -99% each year, and then try to like guess what full time graph produces that yearly result?
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No, I’m saying you take that same coin, but you get to flip it every day. So every day a +99% or (somewhat less likely) a -99%. It’s great news for you: EV(wealth) grows 365 times as fast.
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