Modern finance · 1950s–1990s
1962
Beating the dealer
A math professor shows blackjack can be beaten by counting cards, and casinos change their rules.
In 1956 four army mathematicians published the best strategy for every blackjack hand, which cut the house edge to under 1%. In 1962 Edward Thorp's book Beat the Dealer showed that tracking which cards had been played could tip the odds to the player.
Casinos answered with more decks, frequent shuffles and banning counters. Thorp went on to use similar math in the stock market.
💡 Why it made sense then
Unlike roulette, blackjack's cards come from a shoe without replacement, so the odds shift as cards are dealt.
🎮 In Journey Shares
The casino's blackjack draws from a shoe so big that every card is independent, so counting can't help. Played well, it pays back about 99%.
Ideas it gave us
- 🎯 Risk management
Risk management in trading is limiting how much you can lose, through position sizing, stop-losses, diversification and avoiding too much leverage.
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