My Rich Nerd,
Imagine I give you $25 and 30 minutes to bet on a coin that lands heads 60% of the time. Bet whatever you want each flip, up to your balance. Walk away with what's in your account — capped at $250.
How would you play? Take a second to think.
Victor Haghani and Rich Dewey ran this game on 61 economics students and young analysts at top asset management firms. People who could explain the Kelly criterion at a dinner party (and probably did, unprompted, while you were trying to enjoy your drink).
They got COOKED.
The Optimal Play 🎯
Bet $2.50 (or 10%) of your $25 on heads every flip. If you win, you have $27.50
Bet $2.75. If you lose, you have $22.50
Bet $2.25. When you're winning, you press a little; when you're losing, you ease off — automatically.
In 10,000 simulations, this averaged $241 and hit the $250 cap 94% of the time. It works because you literally cannot go bust — you're always betting a slice, never the whole pie. That's the META (for non-gamers, Most Effective Tactic Available).
What Actually Happened 🫠
Average payout: $91
Only 21% hit the $250 cap
28% went bust (under $2)
67% bet on tails at some point. Nearly HALF did it more than once
Many doubled down after losses and speedran themselves into bankruptcy
Did I already mention that these folks were economics students and young analysts at top asset management firms?
The wildest stat is the tails thing. The coin is telling you that heads is better. And after a string of heads, people still flip to tails because it "feels due." The coin isn’t your ex, keeping a list of every little thing you did wrong. That instinct has wrecked people in casinos, crypto, options, and apparently, academic experiments, too.
The average bet across all 61 was about 15% of bankroll — basically the optimal zone. On paper, the group looked like geniuses. But nobody bet 15% consistently. They'd bet small for a while, get bored, slam half their stack down, panic, drop to 50 cents, then go all-in to "make it back." Having discipline was the problem. You can know the right answer and still lose because you can't sit still long enough to execute it. “Vibes” (emotions) are not an investment strategy.
What This Means For You 📈
The stock market is basically this coin. Most people lose for the same reasons the coin-flippers did:
They invest based on how they feel that morning, or, worse, on Morningstar ratings or Wall Street analysts’ opinions.
They double down to "make it back."
They sit in cash after a scary week (or never get in) and miss the ride back up.
They put 40% of their portfolio in one stock because a TikToker with a ring light said, "This is the next NVDA."
Everyone wants to argue about what to buy. Almost nobody talks about how much. The Rich Nerd meta is the 90/10 Rule: 90% of your portfolio should be in index funds and up to 10% in whatever you want.
This is one of many lessons we’ll be teaching in our new private Wealth Maxxing community. We’re only accepting 10 very specific founding members, and 36 people are already on the waitlist. Join now to secure your spot!
Thx 4 reading,
— Unc Imran 💸🤓
