Edward O. Thorp

Mathematical edges. Thorp, a mathematics professor, first proved that blackjack could be beaten by card counting, then applied the same thinking to markets, running Princeton Newport Partners from 1969 on hedged trades in convertible bonds and warrants priced by his own formulas. He used the Kelly criterion to size bets. His approach anticipated quantitative hedge funds, and he was an early sceptic of Bernard Madoff's returns.