I found his first book unbearable. Felt like a pseudo-intellectual heaping praise on the crap connections he had made. But he has made more money than most and seen Soros at work so I'm sure there are things to learn from him.
Market lore is rife with stories of how some really successful player blew out. One of my favorites is about some guy who hadn't had a single losing trade in 20 years. WOW. I followed his calls in the early '80s. His strategy was to have enough $$ in the account to handle a multiple of 5 futures contracts and to average in to overbought and oversold... playing the parameter, "the market has never extended [___] amount into overbought/oversold before". In 1985, he started averaging into shorts. Market continued to go against him to such a degree that when he finally had to stop out, and using $100,000 as a reference: a. 100% of all profits were lost b. 100% of all original capital was lost c. There was a margin call for $75,000. In other words... after having this strategy work for 20 years, he blew everybody up in ONE trade. I think this type of thing is a risk for the apparently super-successful. Hubris eventually makes them take ever larger risks until one time the market catches them BIG.
Niederhoffer's brilliance is in his ability to perceive the the market in new and radically different ways, and then utilize data-mining to quantify entirely new and useful indicators. The first mention I ever heard of the 'Stadium name' curse was from his writing. I'd highly recommend reading his weekly column, as it's just so different from all the other 'market commentary' that's out there. Here's an interesting one from this week: <i>âCEO Interviews on CNBCâ -- based on the 3,641 CEO interviews between 1999 and 2001 -- that the average performance of a companiesâ shares on the day of an interview was up 1.65%. In the 10 days after the interview, the average performance was down 2.78%. </I> http://moneycentral.msn.com/content/p41488.asp I have his book on order from Amazon, from what I understand the release is just days away.
A twenty standard deviation event happens A LOT more than people would think. I will certainly buy and read the book and learn much from it. nitro
QUOTE]Quote from links: I don't think Niederhoffer's name deserves to be alongside great traders like Dennis and Livermore... [/QUOTE] LOL.... It's Dennis' name that's unworthy of the company of the other two.
LOL.... It's Dennis' name that's unworthy of the company of the other two. [/QUOTE] Dennis trained the turtles who are today's leaders in the futures markets and their performance has been remarkable ever since. Go to turtletrader.com to check it out for yourself. As for Dennis himself, I know that he suffered a setback from the Market Wizard book but I do not know that he blew up 2 times like Niederhoffer. Maybe you have more details about Dennis's trading record..?
Dennis trained the turtles who are today's leaders in the futures markets and their performance has been remarkable ever since. Go to turtletrader.com to check it out for yourself. As for Dennis himself, I know that he suffered a setback from the Market Wizard book but I do not know that he blew up 2 times like Niederhoffer. Maybe you have more details about Dennis's trading record..? [/B][/QUOTE] Yes I do, including the $100,000 of my money that Dennis vaporized in 2000 after I invested in his fund. Don't believe the hype about the 'Turtle method'. It's just the old fashioned 'follow the trend' crap that worked a hell of a lot better in the old unsophisticated markets of decades past. Dennis & his little green reptiles are way overrated. Hopefully you won't have to learn that the hard way like I did... and yes, Dennis did blow up twice.
Exactly my thoughts. Having read Taleb one cannot help but think that the ones surviving in the game til their retirement somehow also mastered the destructive human traits that tend to bring disaster after success. I have a large quote in front of me when I trade that says "WINS MAKE YOU WEAK" to remember that the worst drawdowns tend come after you scored big. Not to quit when on a winning streak, but to remember to fend off overconfidence. However, what Taleb says is that from a large enough sample of traders mere statistics will always let a few make it all the way. ("Lucky losers") What happened to the blowups is simply that they by blowing up changed category from the exceptional few to the losing majority. Just took these famous guys a little longer, hence the more spectacular blowup.