One simple example is buying 2X S&P index ETF instead of 1x. There was a great article about the Kelly optimal S&P allocation, and with all the fees included it's about 2x. Of course there's increased execution risk for the ETF itself, which needs to be estimated.
Another thing where I may look stupid from outside is that I started to take some loan against my BTC and use that to finance my lifestyle, as currently (under $100k BTC price) my estimate of the Kelly optimal BTC allocation is more than 1. This is of course a personal estimate, I don't suggest other people to do the same thing, and again there's a lot of execution risk, so I do this only with a part of my portfolio.
For people who earn a wage and don't just make money by investing, the Kelly Criterion can't be applied in its basic form, since it means your capital gain has both constant and linear components, instead of just being linear as the formula assumes, which complicates matters a lot.
Plus for low probability high reward bets you have the additional complication that you probably can't make them often enough to get a decent chance of hitting the jackpot.
For people who expect to have stable earnings with the current interest rates being below the real inflation the Kelly optimal strategy is to be in debt use it to finance investments (of course this works only if the future earnings are really stable).
As a business example startups are starting to apply for loans against their future subscription earnings to reinvest in their companies. Debt against your salary is the personal version of the same strategy.
One simple example is buying 2X S&P index ETF instead of 1x. There was a great article about the Kelly optimal S&P allocation, and with all the fees included it's about 2x. Of course there's increased execution risk for the ETF itself, which needs to be estimated.
Another thing where I may look stupid from outside is that I started to take some loan against my BTC and use that to finance my lifestyle, as currently (under $100k BTC price) my estimate of the Kelly optimal BTC allocation is more than 1. This is of course a personal estimate, I don't suggest other people to do the same thing, and again there's a lot of execution risk, so I do this only with a part of my portfolio.
I have an old blog post about the subject: https://cryptm.org/posts/2019/10/04/vol.html
Optimal over my time period was 2.99x, but the expense ratio was not accounted for.
For people who earn a wage and don't just make money by investing, the Kelly Criterion can't be applied in its basic form, since it means your capital gain has both constant and linear components, instead of just being linear as the formula assumes, which complicates matters a lot.
Plus for low probability high reward bets you have the additional complication that you probably can't make them often enough to get a decent chance of hitting the jackpot.
For people who expect to have stable earnings with the current interest rates being below the real inflation the Kelly optimal strategy is to be in debt use it to finance investments (of course this works only if the future earnings are really stable).
As a business example startups are starting to apply for loans against their future subscription earnings to reinvest in their companies. Debt against your salary is the personal version of the same strategy.