Originally posted on 12/03/2006:

To me personally, money management is based first on defense (not going broke), and only then on offense (maximizing profit). In theory you may not be able to go broke if you continue to bet any but 100 percent of bankroll, but that theory doesn't necessarily pay the bills.

The chance of a 60% system losing five times in a row is 0.4x0.4x0.4x0.4x0.4= 0.01. One in a hundred. In other words, just a matter of time.

For a -110 bet with a 60% winning percentage Kelly suggest to bet 16% of your bankroll. Let's say your bankroll is 100K. After five straight losses you would have 41.8K. Even if you now won five in a row you would only be back to roughly 82.5K. You're now 5-5 but have handed in 17.5% of your bankroll.

Streaks are real, and the best gamblers know how to ride them. This is an intuitive element not covered by math theory.

Just my two cents, but a full 100 percent.