Niederhoffer thinks "follow the trend" sucks
- Thread starter GloriaBrown
- Start date
selling premium til you blow up.
is it confidence in your game or a confidence game?
making 30% a year selling vol until you blow up... takes (mistaken) confidence in your game. Victor is quoted as saying he was too vainglorious.
However becoming well known and then taking in customer money til you blow up using a business model that sells premium... that seems more like a confidence game.
The same game used by LTCM and Wall street selling mortgages.
I don't know VN, but I did read his book. I really don't know that he took positions and then sold premium when he was wrong. (but I have read he did)
I do know many head strong traders who did the similar things... like buying more as stocks went down or selling options as the position moves against them hoping for a reversion to the mean. (I saw many traders blow out like this in trading rooms)
Therefore I can say the motivating force could have been vanity or lack of self discipline. (rather than scam.)
But, realize that to experienced traders who know how hard it is to make a living trading for a long period of time... being the face of that business model that takes in customer making profits selling premium before it blows up... is very close to being a carney.
is it confidence in your game or a confidence game?
making 30% a year selling vol until you blow up... takes (mistaken) confidence in your game. Victor is quoted as saying he was too vainglorious.
However becoming well known and then taking in customer money til you blow up using a business model that sells premium... that seems more like a confidence game.
The same game used by LTCM and Wall street selling mortgages.
I don't know VN, but I did read his book. I really don't know that he took positions and then sold premium when he was wrong. (but I have read he did)
I do know many head strong traders who did the similar things... like buying more as stocks went down or selling options as the position moves against them hoping for a reversion to the mean. (I saw many traders blow out like this in trading rooms)
Therefore I can say the motivating force could have been vanity or lack of self discipline. (rather than scam.)
But, realize that to experienced traders who know how hard it is to make a living trading for a long period of time... being the face of that business model that takes in customer making profits selling premium before it blows up... is very close to being a carney.
"Godwin's Law of ET"... All threads eventually degenerate into Surf-h8...
Niederhoffer has blown up more than once by making huge "counter trend" bets. Frankly, I'm surprised investors keep giving the guy "yet another chance"... he must be some kind of bullshitter!... to continue to raise fresh money after his well publicized screw-ups.
One might get the impression the only thing he values is the "big score".
Reality, however, still suggests "the trend is your friend". The majority of your plays should be in tune with the market's trend/bias... if you care to be a long-time survivor/success, that is.
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To comment one needs to know the reasoning behind the statement. Somehow I sense it's more about some sort of macho statement, desire to be one step ahead of the heard, to be recognised as the pioneer spotter of a trend change a la "Epic move is upon us" & "I told you so". It would be absolutely unprofessional and unwise of him to suggest that trend followers don't or can't make as much ROI compared to countertrend trading entities. Both can and do work, yet judgement can only be subjective saying what he said.
Disagree. America is built on massive risk taking. VN symbolizes this spirit and has created massive wealth for a host of different folks/- directly and indirectly.
Thanks. Im trained as a lawyer, but not a lawyer.
If you presented similar evidence to me of your success in the markets, i wouldn't discount it.
Where is the evidence? DB, price slayers??
Surf
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America was built on massive risk-taking where those taking the risk bore the consequences of that risk.
These days America is built on massive risk-taking where those taking the risk have little to lose and very often much to gain:
http://www.propublica.org/article/the-rise-of-corporate-impunity
You're either not thinking through this logically, too proud to admit your statement was incorrect, or you are truly an idiot.
We're not talking about someone who risked everything to move West and build the railroad, or someone who pours his entire net worth into his pharma company to cure cancer.
He's a premium seller motivated by profit. By your definition anyone who has ever bought or sold a financial product with the intention of profiting is a "HERO"..... So basically everyone.
My father built a company with over 500 employees. He took a lot of calculated risk. He pays millions in wages each year. It's a "me too", service sector company (which is still 100x more productive than a trader), and I certainly wouldn't qualify him as an American hero.
Let's not pretend that leveraging OPM with the intention of profiting is like running into a burning house to save kids, or being shot at to protect our country, etc, etc
If he is truly a hero, it's for something totally unrelated to what you've mentioned so far, which is risk taking (financially) and being a competitive tennis player. LOL