Neiderhoffer

<i>"I can understand the allure of seeing that $25 million credit hit the run, but how many times must he blowup to understand it's not a viable strategy? These things aren't binary, and they're marked to market."</i>

That guy is the John Daly, not hardly Tiger Woods of the hedge fund world.

So Vic made huge gains, blew up and made huge gains again in the past. Became the #1 ranked on whatever scale in the world along the way. BFD. That is/was all done with an unsustainable approach.

Two things are certain in selling naked puts in all market conditions:

#1: Huge gains will be enjoyed during sideways to upward market periods. Those gains can easily out-perform any other approach during favorable conditions.

#2: Most or all gains will be lost (with certainty) during brief to extended market corrections.

In other words, the odds are high of outsized positive performance for awhile. It is summarily guaranteed that most or all funds (if not outright deficit) will result sooner than later.

*

Where is the genius in that approach? Just about anyone here can learn to run that gamut of boom & bust, no mystery or aura exists there.

Doesn't matter how high an IQ one has, stubbornly playing longside only thru all market conditions while <b>heavily leveraged</b> is just stone stupid. Anyone who persists in negotiating that inevitable cycle is just stone stupid, fund manager and investors alike.

Period, end of story.
 
one must remember this is all ASSumption and extrapolation regarding VNs tactics primary and otherwise. per his writings he is very keen on predator prey relationships and misdirection in the heat of battle. just a thought......:D
 
so your saying he didnt blow up and this is all misdirection so everyone will take the opposite side of his trades and then get squeezed (?) (the ppl who know his positions)


:confused:
 
Lets reserve judgement until we find out what happened.

Marketsufer- For a big fan of Taleb and the black swan I dont understand your love for Vic. Two people with very different ideas on how the world works

Go Bears.
 
Quote from JamesVU2000:

Lets reserve judgement until we find out what happened.

Marketsufer- For a big fan of Taleb and the black swan I dont understand your love for Vic. Two people with very different ideas on how the world works

Go Bears.
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VN has a blurb on the back jacket of "fooled by Randomness" go figure!

:D :D


it's not love for either more like a profound respect.....
 
Quote from marketsurfer:

yes.

if you want big returns, one MUST take big risks. these investors( as all hedge fund investors must be) are sophisticated and understand the risks. Particullarly in this case--ultra sophisticated investor base.
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Hmmm... surf, I don't agree that the investors in this case knew that Vic was going to take a wild gamble with their money. If the story as it is evolving appears to be true, this is simply a case of bad trading, isn't it? This is just like any other blowup - the position goes bad, the trader does not have the ability to close it out for a moderate loss because of a 'belief' about the markets, and it subsequently turns into a huge loss.

I don't think the investor base either knew or wanted Vic to make bad trading decisions
 
I'll disclose first that I really want this rumor to turn out to be false. Anyways, here's a little evidence that would suggest Matador is still alive and kicking:

http://www.dailyspeculations.com/wordpress/?cat=3

Oak Trees, from Victor Niederhoffer
<b>September 2, 2007</b>

In August, the stock market ended up, but with the interest rate vs. earnings yield differential at its all time high. Disruptive moves abounded. The Fed established a reversal in policy, cutting the discount rate. Through history, the average run of Fed moves in the same direction has been about eight. A 10% decline occurred in the S&P 500, and a 1000 point decline in the Dow, events unseen in five years. Some hedgefunds lost, some gained. Exchange margins were raised many times. In niche markets where the strong had ample capital, much fear was raised and many weak longs were washed out. Earnings continued apace, with some sectors down and others up — housing terrible, technology good.

Now the market can go its merry way with much less baggage. A nice replay of 1907, with a few actors changed. All this was brought to mind by the calmness and serenity of nature, exemplified by a few stately oak trees I saw at the Bronx Botanical Gardens today, trees with their horizontal perimeter as great as their vertical, and many branches on each side, starting very low.

______

<b>Does that sound like a guy who just lost 93% of AUM? Does it sound like a crushed and broken man to you?
I mean, Vic's eccentric, but he still has human emotions...</b>
 
Quote from IV_Trader:

HF summery:
marked to market=failed
marked to model=failed ( 8/16)
marked to myth= ???
LOL
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Marked to Enron's "HFV" Hypothetical Future Value. I like marked to myth. ;)
 
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