Neiderhoffer

It's kinda obvious from VN's book that he is fond of romanticizing the trader as some sort of mythical greek hero, by turns triumphant and tragic. And I must admit that it's quite easy to fall for that line of thinking (especially having a liberal arts education), I loved EOAS for that very reason.

But I've learned for myself (in my own little world) how dangerous it can be for one to become enthralled with the "Art of Speculation". Passion is important, but don't let it get to your head.

It is, after all, just one little ponzi scheme after another when you think about -- a neverending search for the greater fool.
 
Quote from ajna:


I've heard people say that the cycle Jesse Livermore went through of making a ton and then losing it all, and then charging back and redoing the whole process again and again was part of his psychological makeup that motivated him. I doubt that Neiderhoffer's problem is lack of understanding of options theory or exotic positions. Some people just like to walk on the edge.
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Can anyone name the movie?:

"You're a Lemon. Like a bad car there is something, there is something inherently defective and you, and you, and you, and me, and all of us. We're all Lemons. We look like everyone else, but what makes us different is our defect. See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose. Subconsciously. Me, I never feel better than when they're raking the chips away; not bringing them in. And everyone here knows what I'm talking about. Hell, even when we win it's just a matter of time before we give it all back. But when we lose, that's another story. When we lose, and I'm talking about the kind of loss that makes your asshole pucker to the size of a decimal point - you know what I mean - You've just recreated the worst possible nightmare this side of malignant cancer, for the twentieth goddamn time; and you're standing there and you suddenly realise, Hey, I'm still... here. I'm still breathing. I'm still alive. Us Lemons, we fuck shit up all the time on purpose. Because we constantly need to remind ourselves we're alive. Gambling's not your problem. It's this fucked up need to feel something. To convince yourself you exist. That's the problem."
 
Quote from Rearden Metal:

Can anyone name the movie?:

"You're a Lemon. Like a bad car there is something, there is something inherently defective and you, and you, and you, and me, and all of us. We're all Lemons. We look like everyone else, but what makes us different is our defect. See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose. Subconsciously. Me, I never feel better than when they're raking the chips away; not bringing them in. And everyone here knows what I'm talking about. Hell, even when we win it's just a matter of time before we give it all back. But when we lose, that's another story. When we lose, and I'm talking about the kind of loss that makes your asshole pucker to the size of a decimal point - you know what I mean - You've just recreated the worst possible nightmare this side of malignant cancer, for the twentieth goddamn time; and you're standing there and you suddenly realise, Hey, I'm still... here. I'm still breathing. I'm still alive. Us Lemons, we fuck shit up all the time on purpose. Because we constantly need to remind ourselves we're alive. Gambling's not your problem. It's this fucked up need to feel something. To convince yourself you exist. That's the problem."
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Just my take here. VN is neither an investor, nor a trader, nor even a speculator. He is a very very very bad insurance company. His strategy, if one wants to call it a strategy, is simply to write a ton of naked puts, betting a disaster won't happen. Any imbecile could do this and have a few years of good returns. Unlike an insurance company, however, VM doesn't buy reinsurance and when a disaster (a volatility spike) happens, he's out of business. I don't think he is stupid; I think he is a con man, whose persona, overwrought verbiage and old contacts lead apparently stupid and naive people into investing in this horrible insurance company called Niederhoffer. VN will still be worth a few mil after the most recent blow up. He's probably even con a few more folks over the next few years into letting him write naked options again. That's the way the world works. His wife should have divorced him while there were more assets on the table, however. At least, now VN can afford to dump her and go to mistress full-time. Losers everywhere in this story.
 
Quote from Rearden Metal:

Can anyone name the movie?:

"You're a Lemon. Like a bad car there is something, there is something inherently defective and you, and you, and you, and me, and all of us. We're all Lemons. We look like everyone else, but what makes us different is our defect. See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose. Subconsciously. Me, I never feel better than when they're raking the chips away; not bringing them in. And everyone here knows what I'm talking about. Hell, even when we win it's just a matter of time before we give it all back. But when we lose, that's another story. When we lose, and I'm talking about the kind of loss that makes your asshole pucker to the size of a decimal point - you know what I mean - You've just recreated the worst possible nightmare this side of malignant cancer, for the twentieth goddamn time; and you're standing there and you suddenly realise, Hey, I'm still... here. I'm still breathing. I'm still alive. Us Lemons, we fuck shit up all the time on purpose. Because we constantly need to remind ourselves we're alive. Gambling's not your problem. It's this fucked up need to feel something. To convince yourself you exist. That's the problem."
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Two for the Money
 
Quote from nravo:

Just my take here. VN is neither an investor, nor a trader, nor even a speculator. He is a very very very bad insurance company. His strategy, if one wants to call it a strategy, is simply to write a ton of naked puts, betting a disaster won't happen. Any imbecile could do this and have a few years of good returns. Unlike an insurance company, however, VM doesn't buy reinsurance and when a disaster (a volatility spike) happens, he's out of business. I don't think he is stupid; I think he is a con man, whose persona, overwrought verbiage and old contacts lead apparently stupid and naive people into investing in this horrible insurance company called Niederhoffer. VN will still be worth a few mil after the most recent blow up. He's probably even con a few more folks over the next few years into letting him write naked options again. That's the way the world works. ........
........................
.
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Thats about the size of it - well said.

Its a crying shame that he is allowed to continue fooling people with this sort of a con game. His investors, however, must share some of the blame for repeatedly falling for this ruse. They are supposed to be doing their own Due Diligence.

I suppose Ed Seykota had it right when he said "Everybody gets what they want out of the market."
 
Quote from Rearden Metal:

Can anyone name the movie?:

"You're a Lemon. Like a bad car there is something, there is something inherently defective and you, and you, and you, and me, and all of us. We're all Lemons. We look like everyone else, but what makes us different is our defect. See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose. Subconsciously. Me, I never feel better than when they're raking the chips away; not bringing them in. And everyone here knows what I'm talking about. Hell, even when we win it's just a matter of time before we give it all back. But when we lose, that's another story. When we lose, and I'm talking about the kind of loss that makes your asshole pucker to the size of a decimal point - you know what I mean - You've just recreated the worst possible nightmare this side of malignant cancer, for the twentieth goddamn time; and you're standing there and you suddenly realise, Hey, I'm still... here. I'm still breathing. I'm still alive. Us Lemons, we fuck shit up all the time on purpose. Because we constantly need to remind ourselves we're alive. Gambling's not your problem. It's this fucked up need to feel something. To convince yourself you exist. That's the problem."
More...


Here's the clip:

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This video goes into the issue in more detail:

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