Edward O. Thorp

Thorp was born in Chicago, but moved to southern California in his childhood. He had an early aptitude for science and often tinkered with experiments of his own creation. He was one of the youngest amateur radio operators when he was certified at age 12. Thorp went on to win scholarships by excelling in chemistry and physics competitions (one instance led him to meet President Truman), ultimately choosing to attend UC Berkeley for his undergraduate degree. However, he transferred to UCLA after one year, majoring in physics. This was eventually followed by a PhD in Mathematics at UCLA. He met his future wife Vivian during his first year at UCLA. They married in January 1956. ==Computer-aided research in blackjack==

Thorp used the IBM 704 as a research tool in order to investigate the probabilities of winning while developing his blackjack game theory, which was based on the Kelly criterion, which he learned about from the 1956 paper by Kelly. He learned Fortran in order to program the equations needed for his theoretical research model on the probabilities of winning at blackjack. Thorp analyzed the game of blackjack to a great extent this way, while devising card counting schemes with the aid of the IBM 704 in order to improve his odds, especially near the end of a card deck that is not being reshuffled after every deal. Applied research in casinos Thorp decided to test his theory in practice in Reno, Lake Tahoe, and Las Vegas, Nevada. Thorp started his applied research using $10,000, with Manny Kimmel, a wealthy professional gambler and former bookmaker, providing the venture capital. First they visited Reno and Lake Tahoe establishments where they tested Thorp's theory at the local blackjack tables. which sold over 700,000 copies, a huge number for a specialty title which earned it a place in the New York Times bestseller list, much to the chagrin of Kimmel whose identity was thinly disguised in the book as Mr. X. is one of the very few examples where results from such research reached the public directly, completely bypassing the usual academic peer review process cycle. He has also stated that he considered the whole experiment an academic exercise. His team's roulette play was the first instance of using a wearable computer in a casino — something which is now illegal, as of May 30, 1985, when the Nevada devices law came into effect as an emergency measure targeting blackjack and roulette devices. He also devised the "Thorp count", a method for calculating the likelihood of winning in certain endgame positions in backgammon. ''Edward O. Thorp's Real Blackjack'' was published by Villa Crespo Software in 1990. ==Stock market==

Since the late 1960s, Thorp has used his knowledge of probability and statistics in the stock market by discovering and exploiting a number of pricing anomalies in the securities markets and has made a significant fortune. Thorp wrote many articles about option pricing, Kelly criterion, statistical arbitrage strategies (6-parts series), and inefficient markets. In 1991, Thorp was an early skeptic of Bernie Madoff's supposedly stellar investing returns which were proved to be fraudulent in 2008. ==Bibliography==