It’s basically an equation to calculate the “sweet spot” of how much you should spend in gambling in order to get the best returns. If you gamble too much, you lose too much when you fail. If you gamble too little, you earn too little to make enough back. I don’t know how this applies to investing but it’s well known in gambling, which is why casinos always have the odds against you so that you’re still more likely to lose or have a minimum bet that’s way higher than the optimal bet.