Math and gambling have been tied together for centuries.
Sixteenth century Italian mathematician Gerolamo Cardano discovered the more times a game of chance is played… the better probability predicts the outcome.
This was later proven as the Law of Large Numbers.
Imagine if you flip a coin once, you have no way of knowing if it’ll come up heads or tails.
If you flipped it 10 times, it might come up with seven heads and three tails.
But flip it 100 times, and you know roughly 50% of the time it would be heads – the other 50% tails.
Here is the key: You can’t predict a single toss, but you can predict the average outcome over 100 tosses.
That’s the Law of Large Numbers. And today, 70% of Wall Street’s trading is based on the Law of Large Numbers.
In today’s essay, I’ll show you how, for the first time in my career, I’ve found a way for you to make the Law of Large Numbers pump $12,000 per month or more into your account.
I’ll get into that in just a moment. First I want to show you how Wall Street stumbled upon this amazing profit machine.
Turning Math Into Profits
Ed Thorp was a brilliant MIT math professor. Early in his career, he had the idea to use his advanced understanding of math to make a lot of money.
And he made millions of dollars… Not on Wall Street – but in Las Vegas.
If you’ve seen the movie 21 you’re probably familiar with his methods.
Thorp used his knowledge of the Law of Large Numbers – and his access to an MIT supercomputer – to create a system that swung the odds of winning at blackjack in his favor.
Thorp’s system worked so well he made a pile of money – enough to catch the attention of the mob. He was put on a blacklist and tossed out of casino after casino. Once, he was even poisoned.
But that didn’t stop Thorp from sharing his strategies in a 1962 book, Beat the Dealer. It sent countless thousands of people to Las Vegas in their quest to beat the house.
These ordinary, everyday people – armed with little more than a high-school education and Ed Thorp’s simple system – became the scourge of Vegas.
You see, the Law of Large Numbers works for anyone. You don’t have to be a rocket scientist to use it. But most investors have never even heard of this approach before.
Casinos all over the world were forced to change the rules of blackjack to make winning using Thorp’s system more difficult. And that’s when Thorp turned his attention to a much bigger game: Wall Street.
Again, he used math and supercomputers to identify opportunities that allowed him to make incredible amounts of money. Today, he has a personal net worth of around $800 million.
This was the very beginning of a major move towards using powerful algorithms on Wall Street. These math geeks are called quantitative analysts, or “quants” for short.
The Law of Large Numbers
Today, quant trading is one of the most powerful strategies on Wall Street. According to Forbes, the majority of highest-earning hedge fund managers and traders are at quant firms (as highlighted in the table below):
|
Rank |
Manager |
Company |
Earnings (2017) |
|
1 |
Jim Simons |
Renaissance Technologies |
$1.6 billion |
|
2 |
Michael Platt |
BlueCrest Capital Management |
$1.2 billion |
|
3 |
Ray Dalio |
Bridgewater Associates |
$870 million |
|
4 |
Ken Griffin |
Citadel |
$870 million |
|
5 |
John Overdeck |
Two Sigma Investments |
$700 million |
|
5 |
David Siegel |
Two Sigma Investments |
$700 million |
|
7 |
Israel Englander |
Millennium Management |
$500 million |
|
7 |
Paul Tudor Jones II |
Tudor Investment Corporation |
$500 million |
|
7 |
David Shaw |
D.E. Shaw & Co. |
$500 million |
|
7 |
Jeffrey Talpins |
Element Capital Management |
$500 million |
|
11 |
Carl Icahn |
Icahn Capital Management |
$480 million |
|
12 |
Chase Coleman III |
Tiger Global Management |
$450 million |
|
13 |
Alan Howard |
Brevan Howard Asset Management |
$300 million |
|
14 |
Crispin Odey |
Odey Asset Management |
$200 million |
|
15 |
Greg Jensen |
Bridgewater Associates |
$150 million |
|
15 |
Peter Muller |
PDT Partners |
$150 million |
|
15 |
Robert Prince |
Bridgewater Associates |
$150 million |
|
18 |
Steven Schonfeld |
Schonfeld Group |
$130 million |
|
19 |
Peter Brown |
Renaissance Technologies |
$100 million |
|
19 |
Paul Singer |
Elliott Management |
$100 million |
Source: Forbes
Just take Jim Simons’ Renaissance Technologies hedge fund, for example.
Its Medallion Fund is famous for achieving the best continuous returns in history. Between 1994 and 2014, it generated average returns of above 71.8%.
If you made a $10,000 investment in the Medallion Fund 30 years ago, it would be worth about $138 million today. By comparison, putting that same $10,000 in the S&P 500 over that span would be worth around just $172,600 today.
Sounds amazing doesn’t it? But there’s a catch…
I wish there was an easy way to get ordinary investors into these types of funds… but there isn’t. Access is strictly limited to employees, close friends of the owners, and the ultra-rich.
But I haven’t let that stop me from finding you a way into Wall Street’s most lucrative trading strategy.
Two years ago, I presented my team with a very unusual challenge…
Kicking Open the Quant Door
I told them to find a way to replicate the most lucrative quant-based trading strategies. After a 24-month search costing hundreds of thousands of dollars in man-hours, my team finally found a way into this closely guarded private club.
The system we discovered has been credited with accurately calling most major moves in the Dow over the past two decades… including the end of the dot-com crash and the 2008 financial crisis…
And backtesting shows a startling level of accuracy. It forecast The Great Depression and Black Monday in October 1987.
Last night, I unveiled the details of this system for the first time to the public during a special webinar. And I revealed the Lockheed aerospace engineer who helped develop it… and the former Chicago Board of Trade member who helped refine it.
More than 55,000 people signed up to watch these two quants predict what’s ahead for the U.S. stock market, gold, and the U.S. dollar and interest rates.
If you missed last night’s presentation, the good news is I’m making a free replay available for Daily readers.
So if you’re willing to put in 12 seconds to make a simple move, this quantitative trading system will give you a guaranteed shot to see $12,000 or more each month.
Cracking open this market has been a lifelong journey for me. Now, I’ve finally found the team I’m willing to stand behind.
So click here to learn how to put the Law of Large Numbers to work for you.
Let the Game Come to You!
Teeka Tiwari
Editor, Palm Beach Daily