Is Kelly criterion outdated?

[LT Isaac]

Hello, fellow card counters!
After researching the concept of SCORE (essentially the idea of comparing the total EV by the variance [as a proxy for risk] taken), I was wondering why Kelly in the original Kelly criterion has not implemented the variance in his equation. Here is the Kelly equation I am referring to: [https://miro.medium.com/v2/resize:fi...TcdZJrIQ_h.png]
Further, there is Edward Thorp's Kelly formula for financial markets. Here is the link: [https://miro.medium.com/v2/resize:fi...PwjN85-GWA.png] Is that the formula I need to use?
Any insights are greatly appreciated.

[DSchles]

Edge divided by variance is what you want.

Don

[LT Isaac]

Thanks, Don, for both responses.

[LT Isaac]

Is there any chance to get some literature recommendations regarding your proposed adjusted Kelly?

[DSchles]

Is there any chance to get some literature recommendations regarding your proposed adjusted Kelly?

Actually, the correct way to express the Kelly concept is that you bet bankroll times advantage divided by the ratio of a winning payoff to a losing one. The latter is similar to volatility, or variance of outcome, but is not expressed in the same manner. Read the article!

Don

https://en.wikipedia.org/wiki/Kelly_criterion