World Library  
Flag as Inappropriate
Email this Article

John Larry Kelly, Jr

Article Id: WHEBN0021746873
Reproduction Date:

Title: John Larry Kelly, Jr  
Author: World Heritage Encyclopedia
Language: English
Subject: Claude Shannon, HAL 9000, Speech synthesis, IBM 704, Quantitative analyst, Daisy Bell, Kelly criterion, Gambling and information theory, 2001: A Space Odyssey (film)
Collection:
Publisher: World Heritage Encyclopedia
Publication
Date:
 

John Larry Kelly, Jr

For other people named John Kelly, see John Kelly (disambiguation).

John Larry Kelly, Jr. (1923–1965), was a scientist who worked at Bell Labs. He is best known for formulating the Kelly criterion, an algorithm for maximally investing money.[1]

He was born in Corsicana, Texas. He spent four years in the US Navy as a pilot during World War II before entering the University of Texas at Austin. He graduated with a PhD in Physics in 1953.

Speech synthesis: Enter Hal 9000

In 1962 Kelly created one of the most famous moments in the history of Bell Labs by using an IBM 7090 computer to synthesize speech. Kelly's voice recorder synthesizer vocoder recreated the song Daisy Bell, with musical accompaniment from Max Mathews. Arthur C. Clarke of 2001: A Space Odyssey fame was coincidentally visiting friend and colleague John Pierce at the Bell Labs Murray Hill facility at the time of this remarkable speech synthesis demonstration and was so impressed that he used it in one of the climactic scenes of his novel and screenplay for 2001: A Space Odyssey,[2] where the HAL 9000 computer sings the same song as he is being put to sleep by astronaut Dave Bowman.[3]

The Las Vegas connection: Information theory and its applications to Game theory

John Kelly was a remarkable character. Apart from being a physicist he embodied certain stereotypical Texan character attributes being a tough guy, recreational gunslinger and a daredevil pilot all at the same time. He was also an associate of Claude Shannon at Bell Labs. Together they developed a Game theory type method based on the principles of information theory developed by Shannon.[4] It is reported that Shannon and his wife Betty went to Las Vegas with M.I.T. mathematician Ed Thorp, and made very successful forays in roulette and blackjack using this method, later called the Kelly criterion, making a fortune as detailed in the book Fortune's Formula by William Poundstone[5] and corroborated by the writings of Elwyn Berlekamp,[6] Kelly's research assistant in 1960 and 1962.[5] Shannon and Thorp also applied the same theory to the stock market with even better results.[7]

Over the decades, John Kelly's scientific formula has become a part of mainstream investment theory[8] and the most prominent users, well-known and successful billionaire investors Warren Buffett,[9][10] Bill Gross[11] and Jim Simons use Kelly methods. Warren Buffett met Thorp the first time in 1968. It's said that Buffett uses a form of the Kelly criterion in deciding how much money to put into various holdings. Also Elwyn Berlekamp had applied the same logical algorithm for Axcom Trading Advisors, an alternative investment management company, that he had founded. Berlekmap's company was acquired by Jim Simons and his Renaissance Technologies Corp hedge fund in 1992, whereafter its investment instruments were either subsumed into (or essentially renamed as) Renaissance's flagship Medallion Fund.

Death

Kelly died of a stroke on a Manhattan sidewalk at the young age of 41 in 1965.[12] It is reported that he never used his own criterion to make money.[12]

References

Cited references

General references

  • Bell Labs Text to Speech Systems.
  • American Scientist online: Bettor Math, article and book review by Elwyn Berlekamp.
  • Elwyn Berlekamp (Kelly's Research Assistant) Bio details
  • John Kelly and Edward O. Thorp
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
 
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
 
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.
 


Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.