[olalonde]

Javascript simulation (might freeze your browser so would be a good idea to run it in Node):

    var t = 100; for (var i = 0; i < 1e6; i++) { if (Math.random() > 0.5) { t = t * 2; } else { t = t / 2; } console.log(t); }

It's interesting how quickly the return goes from extremely small to extremely big amounts.

[RockyMcNuts]

yeah. Now I wonder what happens when you have $10,000, and always put 1% of your portfolio in that stock? I think that turns it into a positive growth expectation. You do it 10 times and outcomes are 50/50, 5 times you made about $100, 5 times you lost about $50.

On the other hand, if you bet your whole stack each time, you doubled up 5 times and lost half your stack five times, you're even.

if you bet your whole portfolio every time, I think your long run growth rate is 0. if you bet a small amount each time, I think your growth rate is positive.

The Kelly Criterion or gambler's curse in action. In the first case you're taking a positive EV bet and turning into a long run no-growth situation by overbetting.