When Math Meets the Market | The Kelly Criterion in 2026 with Andrew Skatoff

In this episode of the Market Misbehavior podcast, Dave is joined by Andrew Skatoff, CEO and CIO of Bancreek Capital Advisors.Andrew shares his journey from traditional, deep-dive fundamental value investing to a highly systematic, quantitative approach. We dig into the data science behind the Kelly Criterion and how to apply gambling's "edge and odds" to optimize stock position sizing without risking gambler's ruin. The conversation explores the massive tax and behavioral benefits of the ETF wrapper, why the sweet spot for portfolio concentration sits between 30 and 50 stocks, and the strategy behind his new Billionaire's Club ETF, which uses founder wealth creation as a definitive signal for structural business advantages.If you enjoyed today's interview with Andrew Skatoff, be sure to check out his firms Billionaire's Club ETF!  https://www.billionairesclubetf.com/And don't forget the book we discussed, Fortune's Formula. If you would like to pick up a copy for yourself, or just see what the book is all about, check out this link!  https://amzn.to/3SpOq5h📈 Topics Covered• Andrew's transition from traditional fundamental value investing to a data-driven systematic approach• Understanding the Kelly Criterion: How to mathematically size positions based on edge and odds• The danger of going "Super Kelly" and why over-betting destroys long-term compounding• Identifying structurally advantaged businesses (monopolies, high margin stability) using volatility metrics• Why the ideal portfolio concentration sweet spot sits between 25 and 50 stocks• The psychological and tax advantages of using the ETF wrapper to eliminate behavioral anchoring and manage turnover• Lessons from the Great Financial Crisis: Why the "path" of volatility matters just as much as the overall return• The strategy behind the new Billionaire's Club ETF: Using founder wealth creation as a long-term momentum and durability signal🎓 Take Dave’s FREE course on behavioral investing: https://www.marketmisbehavior.com/freecourse📘 Check out Dave’s recommended reading list: https://www.marketmisbehavior.com/readinglist👉  Follow Dave on X: https://x.com/DKellerCMT👉  Follow Dave on Bluesky: https://bsky.app/profile/dkellercmt.bsky.social👉  Follow Dave on Facebook: https://www.facebook.com/marketmisbehavior👉  Follow Dave on Instagram: https://www.instagram.com/marketmisbehaviorThe content in this presentation should not be considered as a recommendation to buy or sell any security. All information is intended for educational purposes only and in no way should be considered as investment advice.