John Larry Kelly, Jr
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.
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.
In 1962 Kelly created one of the most famous moments in the history of Bell Labs by using an
IBM 704 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,
[Arthur C. Clarke online Biography] where the
HAL 9000 computer sings the same song as he is being put to sleep by astronaut
Dave Bowman.
[Bell Labs: Where "HAL" First Spoke (Bell Labs Speech Synthesis website)]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.
[John Kelly by William Poundstone website] 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.
[Poundstone, William: Fortune's Formula : The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street] Shannon and Thorp also applied the same theory to the stock market with even better results.
[William Pounstone website]Kelly died tragically of a
stroke on a Manhattan sidewalk at the young age of 41 in 1965.
[Business Week website article: Get Rich: Here's The Math] It is also reported that he never used his own criterion to make money.
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