It has been a number of years since I read two books by each of these authors and traders. And it was only a few days ago that I reread Malcolm Gladwell's excellent 2002 article about these two men:
http://gladwell.com/blowing-up/
http://docs.comparacaodefundos.com/blowingup.pdf
Something occurred to me that I did not fully consider when I first read the article several years ago. Let us very briefly consider each of the trader's backgrounds and then go forward.
Both men are highly intelligent, very well educated and accomplished. Mr. Niederhoffer had a history of considerable success in whatever he set his mind to. He approached the markets, tested whatever could be tested (his credo), and then confidently embraced the risk that he believed he had surmounted with the rigor of his testing. Mr. Taleb came from a family of influence and means that lost both in a matter of months when his homeland blew up. He also became improbably ill, but was fortunate enough to conquer his illness. It is easy to see why Mr. Taleb held a different view of risk and the unexpected.
So while one man confidently embraced risk, arguably to a fault by the events that followed, the other wanted almost no part of it, by virtue of the manner in which he traded. Both had extreme views at the opposite ends of the risk continuum. Both arrogantly believed that their way was not only right for them, but the "right" way of approaching the markets, period. Both are the product of their history, as are we all.
I'm reminded of Ayn Rand and her magnum opus, Atlas Shrugged. It said much about Rand. She escaped from a repressive communist regime and only saw the opposite extreme as sanctuary. For her, as for Niederhoffer and Taleb, there could be no middle ground. Each of them was marked by a past that led them to an extreme view of the world they lived in.
I don't know how Mr. Taleb's trading is presently going. However, my understanding is that Empirica Capital, for whatever reason, has closed its doors some years ago. As for Mr. Niederhoffer, he is said to have mentored several of the hedge fund community's luminaries. This is a notable accomplishment on its own. However, it is telling that his protégés have evidently chosen a different path, judging by what is know of their risk profiles.
I am merely a mouse talking about elephants, and so I wish not to judge them so much as learn from them, in the most general of terms. What I think I learned is that while both men held arguably extreme views towards risk, the answer almost certainly lies somewhere between the extremes, as it does for most things in life.
http://gladwell.com/blowing-up/
http://docs.comparacaodefundos.com/blowingup.pdf
Something occurred to me that I did not fully consider when I first read the article several years ago. Let us very briefly consider each of the trader's backgrounds and then go forward.
Both men are highly intelligent, very well educated and accomplished. Mr. Niederhoffer had a history of considerable success in whatever he set his mind to. He approached the markets, tested whatever could be tested (his credo), and then confidently embraced the risk that he believed he had surmounted with the rigor of his testing. Mr. Taleb came from a family of influence and means that lost both in a matter of months when his homeland blew up. He also became improbably ill, but was fortunate enough to conquer his illness. It is easy to see why Mr. Taleb held a different view of risk and the unexpected.
So while one man confidently embraced risk, arguably to a fault by the events that followed, the other wanted almost no part of it, by virtue of the manner in which he traded. Both had extreme views at the opposite ends of the risk continuum. Both arrogantly believed that their way was not only right for them, but the "right" way of approaching the markets, period. Both are the product of their history, as are we all.
I'm reminded of Ayn Rand and her magnum opus, Atlas Shrugged. It said much about Rand. She escaped from a repressive communist regime and only saw the opposite extreme as sanctuary. For her, as for Niederhoffer and Taleb, there could be no middle ground. Each of them was marked by a past that led them to an extreme view of the world they lived in.
I don't know how Mr. Taleb's trading is presently going. However, my understanding is that Empirica Capital, for whatever reason, has closed its doors some years ago. As for Mr. Niederhoffer, he is said to have mentored several of the hedge fund community's luminaries. This is a notable accomplishment on its own. However, it is telling that his protégés have evidently chosen a different path, judging by what is know of their risk profiles.
I am merely a mouse talking about elephants, and so I wish not to judge them so much as learn from them, in the most general of terms. What I think I learned is that while both men held arguably extreme views towards risk, the answer almost certainly lies somewhere between the extremes, as it does for most things in life.
Last edited:
