Gambler’s ruin is Darwin’s ruin

The same day I first watched “Expelled” in theaters, I also watched the movie “21”. The movie “21” is based on the true story of MIT students who made a fortune in Las Vegas casinos through the use of mathematics.
The real story behind the movie began with an associate of Claude Shannon by the name of Dr. Edward O. Thorp of MIT. In the Early 60’s, Thorp published a landmark mathematical treatise on how to beat casinos. His research was so successful that Las Vegas casinos shut down many of their card tables for an entire year until they could devise counter measures to impede Thorp’s mathematics.
Thorp is arguably the greatest gambler of all time. He extended his gambling science to the stock market and made a fortune. His net worth is in the fractional to low billions. He is credited with some independent discoveries which were the foundation to the Black-Scholes-Merton equation relating heat transfer thermodynamics to stock option pricing. The equation won the Nobel prize and was the subject of the documentary: The Trillion Dollar Bet.
Thorp would probably be even richer today if Rudy Gulliani had not falsely implicated him in the racketeering scandal involving Michael Milken. Thorp, by the way, keeps a dartboard with Gulliani’s picture on it… 🙂
The relevance of Thorp’s math to Darwinism is that Thorp was a pioneer of risk management (which he used to create the world’s first hedge fund). In managing a hedge fund or managing the wagers in casinos, one is confronted with the mathematically defined problem of Gambler’s Ruin. The science of risk management allows a risk manager or a skilled gambler to defend against the perils gamblers ruin. Unfortunately for Darwinism, natural selection has little defense against the perils of gambler’s ruin.
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