Below is a rather unflattering profile on the business and market decisions of the Sage of Omaha. http://www.dailyspeculations.com/Letter/omaha1.htm http://www.dailyspeculations.com/Letter/omaha2.htm "The company is definitely making a bet on a widening lower class (the most recent acquisitions being Clayton Homes, a provider of manufactured homes, and McLane Distribution, a supplier of goods to convenience stores and wholesale stores which Buffett just bought on Friday from WalMart), greater unemployment, lower interest rates, and a perpetually sluggish economy. The primary assets of the company being fixed income bonds that would be adversely effected by any rise in interest rates. Munger's greatest fear, which he brought up in the meeting, was a spiraling down dollar, triggering perhaps government seizures of financial assets which we would not be able to protect against for reasons I didn t really follow, not really knowing anything about currencies or extreme paranoia. And Buffett mentioned that although GDP growth appears to have been 2% last year it was actually less because per capita GDP was less since the population grew. His theory being that we are still in a 2 year recession."
I have to admit that his book, "Education of a Speculator", which came highly recommended, was a total waste of time, IMO. It was abstract, esoteric, and very hard to follow, IMO. I quit half way through it, because I was getting nothing out of it. I truly found nothing in it, that helped me with trading or the psychology of trading. Perhaps it's me, but all the gloating recommendations of this book, are highly inflated, IMO. It was recommended as a classic to me, and I think it's nothing more than classic B.S.
Totally agree. And the interesting thing is, right after that book was published, his fund blew up. I think, he started thinking he was invincible and knew everything?
education of a speculator is one of the best market related books ever written. there is more wisdom, insight, and knowledge in each chapter than in dozens of "typical" trading books. niederhoffer gave the trading community a gift when he decided to put his thought processes on paper. this book will go down in history as one of the best of the 20th century. the book teaches a way of thinking, a way of percieving the markets and the world that is revolutionary. internalizing this process has helped my evolution as a trader and market analyst to the utmost degree. surfer
But it's HIS way of perceiving the markets, and that way is not for everyone; for if it were -- it would be the way. To you it was one of the best, to me it was just interesting, nothing more and nothing less, and to be honest, the 'best' message I got from the book was in HOW NOT TO PERCIEVE THE MARKET through his shadow boxing wit the yen in the very first chapter (and how lame and pretentious to name the chapter after a true masterpiece -- boy how he missed the message of Santiago's way)... Don't get me wrong Surf, I'm not haten on ol Vic, he has done some amazing things in his life/career and I can learn much from him, but the way you run around here cheerleading this guy and regurgitating everything he says -- runs the border lines of down right sickening to me; for I thought you were an independent thinker PEACE and good-specul8tion... "So long as man remains free he strives for nothing so incessantly and so painfully as to find some one to worship..." Dostoevsky; The Brothers Karamazov
I thought "Education of a Speculator" was an intelligent and innovative book. But, I remember him saying "I don't use stops" and he seemed obsessed with sex (someone who is writing a serious book would normally not mention getting laid in the office). I thought at the time - this is a guy who is not in control of himself. This was before he blew-up.
Too bad he knew nothing about "risk-management" and selling NAKED S&P Puts in the Fall of 1998. I knew a guy that took the other side his trade when his clearing firm blew him out of all of those overpriced S&P puts and the guy made the Deutsche Bank Equity-Derivatives Desk $45 million that week. Yeah, Niederhoffer is a smart guy alright!
I doubt a guy as sharp as Nieder was ignorant on the matter. IMO, he knew the risks inherent and rolled the dice. This is an excerpt taken from Education of a Speculator... {pg 143} {"Afterward I scold Howie for risking everything in one toss. He tells me "If you are going to gamble, the only way to do it is to GAMBLE! The only person who can grind it out is the bookie because he gets 5% off the top regardless" I have never forgotten this advice. Often, when I am down and out after some terrible speculation, I'll come right back with another large trade. "You're going right back?" Susan asks. Desperate times call for desperate measures. "I'M GOING FOR BROKE," I always respond. If it was right for Howie then, it's true today, some 43 years later!"} Vic tried to box wit the trading gods and soon found out his arms were too short. Everyone knew where he was and blew him out of the water, kinda a shitty break, but something tells me if the script were flipped he'd a done the same in a NY minute.