It assumes the market probability is correct for all your other bets, which is an important caveat. This will make it more risk averse than it should be (you can afford to risk more if you expect your net worth to be higher in the future).
It also assumes all the probabilities are uncorrelated, which is another important caveat. This one will make it less risk averse than it should be.
I’m planning on making a version that does take all your estimates into account and rebalances your whole portfolio based on all your probabilities at once (hence mani–folio). This is a lot more complicated though, I decided not to run before I could walk. Also I think the simplicity of the current version is a big benefit, if you are betting over a fairly short time horizon and you don’t have any big correlated positions then the above two things will just be small corrections.
How can I do that without knowing my probabilities for all the other bets? (Or have I missed something on how it works?)
It assumes the market probability is correct for all your other bets, which is an important caveat. This will make it more risk averse than it should be (you can afford to risk more if you expect your net worth to be higher in the future).
It also assumes all the probabilities are uncorrelated, which is another important caveat. This one will make it less risk averse than it should be.
I’m planning on making a version that does take all your estimates into account and rebalances your whole portfolio based on all your probabilities at once (hence mani–folio). This is a lot more complicated though, I decided not to run before I could walk. Also I think the simplicity of the current version is a big benefit, if you are betting over a fairly short time horizon and you don’t have any big correlated positions then the above two things will just be small corrections.