Elm Wealth Research
Victor Haghani and James White's notes on bet sizing, expected returns, spending and the behavioral traps of investing, plus interactive games such as the biased coin-flip challenge.
Free to read
Elm Wealth's research comes mostly from founder Victor Haghani, a former Salomon Brothers trader and LTCM partner, and his colleague James White, co-authors of The Missing Billionaires. The notes come back again and again to one idea: deciding how much risk to take matters as much as picking investments, and expected-utility thinking gives a disciplined answer. Topics include the Kelly criterion and the Merton share, lifetime spending, the odds of a market crash, overnight versus daytime stock returns, Roth conversions and other tax questions, and why so few great fortunes last.
The pieces are short and quantitative but clearly written. Several are backed by experiments, most famously the coin-flip study in which finance-trained subjects betting on a coin with a 60 percent chance of heads often went broke.
Play the coin-flip game before reading the sizing notes; the lesson lands harder after you have played. Then use the Greatest Hits page to find the essential notes.
Start with
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1
Coin Flip Challenge
Bet on a biased coin yourself, then read the Journal of Portfolio Management study linked from the page.
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2
The Most Important Number Not in The Wall Street Journal (September 2024)
Introduces the risk-adjusted expected return that should set how much you put in stocks.
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3
Still Working the Night Shift (March 2025)
Examines the puzzle that most stock market gains arrive overnight.
