Comment by Majromax
20 hours ago
'Enough' [capital] is doing a lot of work in that sentence. In the limit of a one-sided irrational market, the 'rational actor' would need to take the other side of every open transaction.
20 hours ago
'Enough' [capital] is doing a lot of work in that sentence. In the limit of a one-sided irrational market, the 'rational actor' would need to take the other side of every open transaction.
Yeah, but in the limit of a one-sided irrational market, the rational actor is going to be given as much capital as he can take.
In the long run. In the short run, our rational actor will be constrained by the Kelly criterion, well and whatever outside funding she can raise.