Reckoner has asserted throughout that VN is a "great trader" yet has not supported this assertion with evidence. Instead he has resorted to ad hom, appeals to authority, among other logical fallacies. Answer me this, Reckoner: How can a trader who (1) blew through all of his capital (and more) once through a casual indifference to risk; and (2) suffered an almost 30% drawdown in May, a time when the S&P was down about 3% be regarded as a "great trader"? At this point he seems to make a great deal of money much of the time, but has a hard time keeping it when the statistical aberrations appear, as they always do. An error, I think, that is due to his treating the markets as if they were closed systems that run according to the laws of probability. He may be a "great" person (or not--I don't know him personally) or "great" lover (he apparently has both a wife and a mistress--and childen with both), but "great trader", at this point, is a stretch, imo. Any trader can get lucky during a stretch, but I reserve the appellation "great trader" for those who win time and time again, over the long haul, who have the judgment and discipline to know when to hold 'em and when to fold 'em
i think i have misjudged u now troll... maybe u have a point after all: niederhoffer didn't fail, he IS one of the greatest greats indeed... its the market thats failed him...
I think there have been numerous fallacies posted here, basically through ignorance. Everyone has been going on about arrogance etc, but what does that mean in practice? All we've seen are sweeping generalities and assumptions based on partial information. And even the article has been largely ignored. Niederhoffer completely overhauled his approach after 1997 to be focussed on the S&P, which is essentially a much more predictable and stable vehicle than more exotic and far flung markets. May was quite an anomoly and could turn out to be a once in a lifetime thing, though he has survived and may well come back to having another great year. A lot of aggressive hedge funds go through major equity swings, ask John Henry for example. Yet because of Niederhoffer's previous accident, people put 2 and 2 together and come up with 6. It must be hubris etc, blah blah blah. As for losing 28% when the S&P is down 3%, this is kind of the wrong way to look at things as any gains or losses of any fund will not work in such proportions. It depends what your positions are and when you take them, and it looks like he was caught with a very unlucky punch, a market anomoly that happens very rarely. As far as getting out is concerned, any stop loss will reduce the degrees of freedom on a trading system and produce inferior returns. OK, there can be times at which one has to try and bail out because of mortal danger but this shouldn't be the first port of call for getting superior returns. When the market gets very scared a rally is usually in the offing, and the last two days would indicate that his monday 'prediction' (in a statistical sense) was not that bad, though slightly on the early side. It remains to be seen how bearish funds will perform over the next few months. Archimedes was not very specific about the mystery traders he had in mind or their wonderful returns. There are no doubt some exceptional traders around, but it's a totally different ball game from having a small account to managing millions. There is, for example, the whole business of getting in and out of positions, which is as easy as pie if you've only got a couple of contract to trade, but far more difficult when you're buying/selling hundreds. As for Niederhoffer's character I can say his one of the finest people I've ever met, which explains why I've come here to fight in the mud with pigs. I don't like to see people I admire maligned in this way, especially when their criticisms are based on half truths, assumptions and inuendo.
How many times has VN blown out his account by half or more. Posters here have said it has been multiple times.
i don't have the statistics on it (has anyone gone back through the archives to check?) but once again the "lowlife indicator" worked. whenever they're spending all day flaming vic for his permabullishness.. SPU6 1267.70s +26.50