Looks like Victor Niederhoffer blew up again

[Brighton]

1982 to 1996 -- 30% per year compounded is one hell of a track record. Perhaps the best verified record of all time for a hedge fund manager.

I don't know who the greatest was, but I imagine some research house has figured it out. Two comments/questions about that 30% annualized figure:

1. Is that net to investors (see Steinhardt story below)

2. What was the annualized return - 1982 to 1997? - that includes the first blow-up? Granny could have earned ~14% or so from 1982 through 1997 and only paid John Bogle 20 bps rather than 2 and 20.
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http://www.forbes.com/sites/michael...-is-back-and-hes-reinventing-investing-again/

During the three decades that Wall Street grew up, morphing from a gentlemen’s investment club into a global financial colossus, Michael Steinhardt emerged as the world’s greatest trader. From 1967 to 1995 his pioneering hedge fund returned an average of 24.5% annually to its investors, even after Steinhardt took 20% of the profits. Put a different way, $10,000 invested with Steinhardt in 1967 would have been worth $4.8 million on the day he shuttered his fund. (The same investment in the S&P would have been worth $190,000.) It was a performance that landed him on The Forbes 400 in 1993, with a net worth estimated at more than $300 million.

 

[Visaria]

Well, VN has his demons --- however the value of his ideas is shown in the dozen or more too money managers who attribute their success to his tutelage. That is real value despite his allowing his competitive nature blow up funds.

1982 to 1996 -- 30% per year compounded is one hell of a track record. Perhaps the best verified record of all time for a hedge fund manager.

How do you know that Soros doesn't have or had $ with VN? I certainly have no idea but you seem to have this inside knowledge.

Can you point to a source which will verify the "verified" 30% pa record for 15 years? I refuse to take your word for it.

As for Soros investing with VN, Soros himself said he gave VN some money to trade with, which VN to his credit did well with but then had the integrity to close the acct down when he started to lose money. Apparently, VN was using some weird system like Mondays gamblers do X in the market and on Tuesday they do something else. See the book George's book "Soros on Soros" for this info. When asked whether he still had money with VN, he said "NO! Never again".

 

[Visaria]

That is real value despite his allowing his competitive nature blow up

ROFL!

 

[Butterball]

See the book George's book "Soros on Soros" for this info. When asked whether he still had money with VN, he said "NO! Never again".

Soros outlined that Niederhoffer liked to swim against the direction of the waves coming it. 49 out of 50 times it went well after averaging into losers that eventually turned around. However, every once in a while a tsunami hit the shores that Niederhoffer didn't see coming and he got killed.

 

[cornix]

Evoque?

LOL

 

[spencer]

Rumor at one of the big houses is that Victor Niedderhoffer blew up again for the third time. This time with personal funds, as well as a trust his wife had. Pretty sad, but not totally unexpected.

I remember checking out his site last year, and this senile old bat has some crazy inane nonsensical ramblings. Just brutal to read. I always wondered how he kept up the high living, and now we know that his wife had some serious coin that came her way by inheritance.

I wonder if he will have the guts to come clean. He has never admitted that his methodology is wrong. He trashes Buffett whenever he can, too...lol. He thinks that the only ones who can profit are the ones who take the most risk, so he will ALWAYS disregard risk. In fact, he actively searches out risk.

Shame on you, Victor! Thankfully your parents aren't around to see this. I know your father was a hardworking man who would be turning over in his grave if he knew the schemes you were involved in, all because you didn't want to do an honest day's work. Disgusting.

Great great missive. Always real brights in real finance. I feel glad that your last paragraph is what I was thinking... maybe there something is wrong with me at this age.

 

[badvestor]

so what's the latest? Guy croaked or recovered with move higher?

 

[helpme_please]

I have not read through the entire thread. Too many pages. But it is hard to believe that a good speculator can blow up in an environment where volatility is so low. Lose money, yes. But to blow up, quite hard.

 

[profturf]

One has several enemies --- one of whom I have a Judgment of several big ones against along with his bounced checks. Another who applied for a job here with an IQ of 170 and the ability to foretell every range. I didn’t hire the latter because the ability to call a fuzzy range has nothing to do with profits. Both of them have consistently been doing all they can to harm me (and my family) tangibly and intangibly any way they can get away with from behind the cloak of anonymity. I occasionally post their imprecations and allusions to their hopes for my departure from this life onto dailyspeculations.com. The threads about my idiocy and naiveté are in the main horses from the garages of the above and their colleagues

I couldn't answer all the negative posts about my put selling during the heat of the battle because it would have been detrimental to my customers. I haven't answered either of their hundreds of posts since because it is demeaning and the best revenge against imbeciles and envious persons is to merely attempt to go forward with a modicum of profits.

For the record, I have not sold any puts in 8 years. I learned my lesson. The lesson I learned is quite a bit more complicated than expressed in the thousands of critical posts that have come down the pike since then. Some of the lessons I learned are on the article about mistakes on Slate:

http://www.slate.com/blogs/thewrong...libis_victor_niederhoffer_on_being_wrong.html

I had to leave many lessons out of the Slate thing, especially the futility of playing against men named Doc who set all the prices, spreads, and margins.

I would add that no one knows the total profits or losses I made by selling puts except me. However, when my customers did lose, I was by far the biggest loser. In the 1997 debacle, I won a judgment for my customers of several big, gave all the proceeds to my customers and paid the legal expenses, which were quite comparable, all myself. On the many occasions that I have invested with others, and have lost, no one has done anything like that for me.

I have not been involved in pork bellies or the other crazy things that my enemies like to say I blew up with subsequently. I am trying to improve with my own trading so that I can support all my kids and dependents in a humble way. It has not been a total disaster. And if I had been more successful at it, and I knew which way the market was going more often, I would be a wealthy man. Profturf

 

[ogarbitrage]

Vic you seem okay to me. I think the market humbles us all who stick with it and you seem to have responded with a quiet dignity that is lost on many. I hope you continue to write and give interviews as I think you have a rich body of experience in risk management. I have found pearls of wisdom in your story and I am sure many others have as well.