Victor Niederhoffer--- Rare Silver Auction Catalog

[marketsurfer]

Quote from Thunderdog:

That's a lot of fancy talk. Let's "big-picture" it for a moment. I am zero-connected in the trading world. But to use household names, I'm guessing that guys like PTJ and Cohen have "slightly" larger "AUMs" (in the multiples) and yet somehow manage to perform very well without stepping from one landmine to the next. How do you figure?

yeah, absolutely, VN is a minnow compared to those guys.

cohen/PTJ are in the "stay rich" game for the investors imho.

VN is in the "get richer" game for the investors imho---therefore able to, EXPECTED to, and was paid to take greater risk for greater returns--- rendering the potential blowout due to inner circumstances or outer forces a greater possibility than those in the 'stay rich" game.

remember, most of the investors are ultra wealthy---10k for a regular guy is like 1 million or more to them--- it's a whole different perception.

 

[Thunderdog]

Quote from marketsurfer:

...cohen/PTJ are in the "stay rich" game for the investors imho.

VN is in the "get richer" game for the investors imho...

And how do their respective returns compare? (Not a rhetorical question.)

 

[taowave]

Quote from marketsurfer:

i don't know for sure, your right. however, knowing the level of the investors, and the due diligence process that is normally done, i truly doubt they would be lacking in understanding of these simple facts---if, in fact, this is the case.

regards,

surf

Surf,sophisticated or not,there is a certain amount of trust that an investor must place with an individual when he places capital with them...I cant beleive for one second that any savvy/sophisticated investor would place one penny with a fund manager who blows up every time there is a 10% correction to the downside.

IMHO,Vic does not divulge that he is a massive seller of short gamma (specifically downside skew)and does so directionally(not delta neutral).DO you honestly believe if Vic handed his investors a pretty little graph that shows his gamma exploding on him down 4 %,the investors would be handing him that check??

Furthermore,one should never use the term mean reversion in the same sentence with Vic.Hes a directional trader,and there is no reversion to the mean when trading directionally.Its utter nonsense,misleading and borders on fraud.

 

[taowave]

Quote from Thunderdog:

And how do their respective returns compare? (Not a rhetorical question.)

Cohen is in a league all by himself(with one or two exceptions),and as much as people will attack him,he is a super talented trader...His organisation,as well as Tudors is global in reach,DIVERSIFIED,with various arbitrage and market neutral strategies.

I can tell you this from first hand experience.They are disciplined traders,and take the direct opposite approach as Vic when it comes to making directional bets.Come to think of it,I can not think of ONE directional trader(n that league) who would ever trade in the manner Vic does.Its not trading

 

[marketsurfer]

Quote from taowave:

Surf,sophisticated or not,there is a certain amount of trust that an investor must place with an individual when he places capital with them...I cant belive for one second that any savvy/sophisticated investor would place one penny with a fund manager who blows up every time there is a 10% correction to the downside.

IMHO,Vic does not divulge that he is a massive seller of short gamma (specifically downside skew)and does so directionally(not delta neutral).DO you honestly believe if Vic handed his investors a pretty little graph that shows his gamma exploding on him down 4 %,the investors would be handing him that check??

Furthermore,one should never use the term mean reversion in the same sentence with Vic.Hes a directional trader,and there is no reversion to the mean when trading directionally utter nonsense,misleading and borders on fraud.

ok.

these FOF's have TEAMS of people doing due diligence prior to one penny going out the door. there is very little raw naive' trust going on--remember we are primarily not talking about the average millionaire who wants to throw a bone to rich@rd denn*s
or superfu@d here--- no offense meant, man, but do you know the wringer one is put into prior to obtaining funding from a large FOF or institution?


so what is that you are saying, VN made up stuff and fooled even the most hard nosed traders of hedgefunds? if so, that is seriously mistaken, not in character for the man, and likely impossible to actually pull off. remember, these large investors are also monitoring you, at all times, they just dont throw 25 million PLUS out on trust alone.

surf

 

[Thunderdog]

Quote from taowave:

...I can tell you this from first hand experience.They are disciplined traders,and take the direct opposite approach as Vic when it comes to making directional bets.Come to think of it,I can not think of ONE directional trader who would ever trade in the manner Vic does.Its not trading

And yet...

Quote from marketsurfer:

VN is the greatest living speculator...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=112252

Surf has so much explaining to do. On top of which, I just know he doesn't like all this attention...*sigh*

 

[marketsurfer]

Quote from taowave:

Cohen is in a league all by himself(with one or two exceptions),and as much as people will attack him,he is a super talented trader...His organisation,as well as Tudors is global in reach,DIVERSIFIED,with various arbitrage and market neutral strategies.

.

totally agree with you above. however, from what i understand, once again, i don't know ---- that SC has tremendous informational advantage.....

however, i disagree with the second part of your post, VN had many years of AWESOME returns--- did he screw up several times, does he push things too far? yeah--possibly--i dont know enough to say for sure-- many many years of stellar returns punctuated by 2 blowouts----that's speculating in the purest form......you win, you lose-- you get back up, take risk, and you try again.....

 

[Thunderdog]

Quote from marketsurfer:

...stellar returns punctuated by 2 blowouts----that's speculating in the purest form......you win, you lose-- you get back up and you try again.....

...With someone else's money, of course.

So, what you are saying is that VN's race car makes good time when it isn't crashing.

I think VN would make a most interesting, if short-lived, race car driver. After all, he'd be paid to floor the accelerator, so to hell with the turns and curves and whatever the other drivers may be doing.

 

[taowave]

Quote from marketsurfer:



so what is that you are saying, VN made up stuff and fooled even the most hard nosed traders of hedgefunds? if so, that is seriously mistaken, not in character for the man, and likely impossible to actually pull off. remember, these large investors are also monitoring you, at all times, they just dont throw 25 million PLUS out on trust alone.

surf

Surf,lets take Vic out of the equation.I will have to grant you that the institutions know well that Vic is a seller of options.The question is to what degree.At this point,I am speculating (poorly),and have not had the privelage of attending a Vic presentation.

The problem with options, as I think you know,is the payoff is far from linear and depending upon the simulation,the risk can look miniscule,or it can look the Hindenburg.What is disconcerting from my perspective is Vic gets destroyed in a 10 percent move,and trust me his gamma was exploding way before that.

If the investors are as savvy as you say,I would have to think that Vic had Delta,gamma and vega limits like every other derivative trader in the world and its not a "local" limit.

Is it possible Vic doesnt run simulations down to the short strike??Unlikely

Is it possible the investors arent aware of his greeks at the short strike??Possible and probable,but its just a guess..

Would you invest in a fund that is in major hot water down 5%,and extict down 10%??

 

[Reaver]

Quote from Thunderdog:

...With someone else\'s money, of course.

So, what you are saying is that VN\'s race car makes good time when it isn\'t crashing.

I think VN would make a most interesting, if short-lived, race car driver. After all, he\'d be paid to floor the accelerator, so to hell with the turns and curves and whatever the other drivers may be doing.

Nice one.