I see a query relating to documentation of that horse's --- Niederhoffer's returns. I am familiar with those results as an investor, and also a subsriber to MAR,TASS, Blloomberg and most of the other ratings services. MAR ranks him in their JUne issue as number 1 for performance of funds with 100 million assets for 2005, to date, 2004, and the three years ending may 31, 2003. Bloomberg has similar results reported by independent sources ,I also note previous reports that he has blown up in 1987, 2001, and many other times. I would caution you that part of Niederhoffer's approach seems to be to emphasize his losses, so that the adversaries will get over confident, and that apparently is why in his web site which I read and occasionally find very interesting, although I disagree with many of the posts about doomsday for example, he emphasizes at least once a week how he blew up in 1997 and is a shooting star that people like expert derivatives traders can make a fortune if they only would continue their activities of going againsth him. I would be happy to shed light on this subject on which I know the facts and figures if the discussion is of a civil and educatory nature. sincerely, proturf.
John Henry--The Next Blow Up ??
- Thread starter jay gould
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Thank you for your ever cordial, civil and constructive approach to conversation. What do you attribute the success of VN in recent years? How has he changed or learned from his experiences that will allow him to avoid some of the problems of the past? Do you feel that the hedge funds have gone from 'smart money' to 'pigeons' (ie. edge providers) due to recent developments in the business (ie. they have become whimpy pack rats due to benchmarking). While it seems apparent that VN has never believed in "trend following", how can the longer-term success of Henry, Jones, Druckenmiller, et. al be denied? How does VN answer the Martingale-esque pitfall that seems to be inherent in counter-trend or mean reversion activity? Does VN use stops? Is that a change from his prior thoughts on stops? How does one allow stop losses to co-exist with mean reversion thought process? I have lots of questions if you care to entertain them. Thanks!
a cordial inquiry comes my way concerning how many times I believe Niederhoffer has blown up and whether he has changed his methods and this explains his recent results. I would think that the report of his previous blowups might be taken with a grain of salt . For example, in the gladwell article extolling . Taleb's superb game plan, Niederhoffer is quoted as saying vis a vis 9 -11- 2001, " it was nip and tuck ". I doubt very much that he could have started his 2002 fund in early 2002, a fund which the prospectus as I recall it reported returns for the previous 3 years of some 50% a year if he indeed had been nipped too badly in 2001. Much worse was the actual results that his fund and I actually experienced in the summer of 2002., a gut wrenching experience that made me think he was incorrigible. As for how he has changed, I believe he would say that he is still a shooting star waiting for disaster to strike again. However, reading between the lines I would imagine that he doesnt invest that much in Thailand any more, where I believe he lost more than his entire stake. As for the reports that he somehow stiffed his investors by not letting them withdraw,with some lockup technicalities, I know that he brought an action against certain parties to the other side of his trades, and received a nice settlement, although pitifully small relative to the losses, and returned all that money directly to his customers. Obviously these technicalities are not of the kind that the complete story will ever emerge , but he seems to manfully accept much blame for his part in the debalcle in his 2003 book, and talks about the lessons that hopefully he has learned. Sincerely, proturf
an inquiry comes as to whether a notorious option seller 's activities are in the main involved in individual stocks or indexes? I would believe based on what I know of that personages activities, especially those that are documented on the some 300000 bloomberg terminals in existence, that he is not overly partial to selling premium on individual stocks as there is no empirical historical edge, and required margins are very high on same, especially for someone with the kind of reputation for being an easy mark, and generally amiable idiot as him. However, I would also suggest that you consider checking your premises. Is it not likely that over the years that he has been business, subject to the ebbs and flows of many a storm, and scrapes and rushes, that he has learned to do something besides selling naked options? Sincerely, Profturf
Thanks. Thats one of the best compliments I have ever seen on this website
. Search back for the reference. Someone said it was a great post.The topic of Victor Niederhoffer is too much of a lightning rod for most people to have much useful debate. Everyone has their own private notion about whether mean reversion or trendfollowing is the correct religion and the topic of Turtles, VN , JWH are just convenient battlegrounds for people to get all hot and bothered.
It should be clear that the prosperity of many trendfollowers should cause rational people to be wary of dismissing all trend following out of hand.
Similarly, it should be clear that the prosperity of many proteges of VN and the school of scientific trading in general should also cause rational people to be wary of dismissing their methods out of hand.
Reversalists get hurt by big moves, trendists get hurt by chops. Since no one group makes money without going through periods of hurt, it's obvious that both forces of expansion and compression are at work in the market - and so there is room for both turtles and anti-turtles to prosper.
It should be clear that the prosperity of many trendfollowers should cause rational people to be wary of dismissing all trend following out of hand.
Similarly, it should be clear that the prosperity of many proteges of VN and the school of scientific trading in general should also cause rational people to be wary of dismissing their methods out of hand.
Reversalists get hurt by big moves, trendists get hurt by chops. Since no one group makes money without going through periods of hurt, it's obvious that both forces of expansion and compression are at work in the market - and so there is room for both turtles and anti-turtles to prosper.