So you can see data, it's running there.
So you can see if you have half your money,
you get 12% annual return in stock if you have half your money in Stock 1.
If you put nothing in Stock 1, you basically break even,
I could run this 10,000, 5,000 more times.
And you'll see the same thing, you put all of your money in Stock 1, nothing in
Stock 1, all in Stock 2, you hardly grow at all, but you grow around 12% here.
Let's do it one more time.
So that should convince you there is something to Kelly growth,
here we grew 11.9%, here we grew 0.36%.
So basically we can see by putting half our money Stock 1 and
half our money in Stock 2, we sort of hedge our risk.
We rebalance our portfolio each year, and sort of lets us buy low and
sell high in a sense.
And that's much better than putting all our money in one stock or the other.
And so, this will lead us in the next video to basically applying the Kelly
growth criteria to figure out, if you know your probability of winning a bet,
basically, what fraction of you money should you place on each bet.
And basically, when we talk about family fantasy sports,
if you think you know the chance of your lineup winning, you could apply Kelly
growth to family fantasy sports games like Skill zone, Draft Kings or Phantom.