"He's a trader's trader and puts more money to work every day than most of us do in a year. That makes his book worth reading." I disagree. He no longer manages money proffessionally, nobody will let him. He is a reckless cowboy trader.
His 'non- professional' AUM is alot higher than you think. I won't give numbers, but I can assure you that there is still alot of truth to Vishnu's statement.
Some comments from a friend who's read this thread: These posts about whether Victor is a market wizard or not based on past performance crack me up. Mostly because they show such an incredible amount of niavete. Most of the guys profiled in Market Wizards either blew up or suffered huge losses at one point. Many of them have closed up shop (are you more brilliant because you stopped before you lost really big? Is Michael Jordan any less of a great b-ball player because he played past his prime?). Ditto New Market Wizards. One of the so-called brilliant guys in Stock Market Wizards turns out to have been a fraud (and I think one in New Market Wizards was also exposed as being bogus). Tom Baldwin was great on the floor. I understand his investments off the floor were not so successful. Does that mean he's an idiot? The other thing most of us don't know is how many market wizards came close to blowing up but didn't because some investment house or friend came to their rescue with an infusion of cash (and I know this was the case for one big rock star hedge fund guy) or chose to look the otherway when they should have been issuing a margin call. If Refco had looked the other way for 24 hrs. Niederhoffer wouldn't have blown up (not that I'm saying they should have but we all know clearing firms do this). If that had happened would Victor be more brilliant in these peoples' eyes? If they didn't know that he almost blew up would he be perceived now as being a wizard? People have an amazing capacity for not recognizing that a lot goes on that they don't even know. And what is with dissing someone's education? The man didn't go to Harvard and Chicago on the basis of some family connection but on hard work. Why denigrate that? I've seen where Victor grew up. Anyone who can build a success coming from nothing, financially speaking, deserves our admiration and praise. That is what this country is about. That is not to say that successful people don't sometimes make mistakes. The difference between most of us and Victor is that he is prepared to take big bold risks. And when they pay off he has been rewarded handsomely. When they didn't he suffered a horrific defeat. Yet he pulled himself up by his bootstraps and climbed back up the stairs AGAIN. How many of these guys posting could do that?
What cracks me up are the repeated attempts to defend the guy's pathetic trading record based on his intelligence and brilliance. Intelligence and trading ability are not always and everywhere inseparable, and one does not guarantee the other. How hard is it to get that? As far as I'm concerned, I did not call into question Nied's education, perserverance etc in any of my posts. In my last one, I said that I admire the man's achievements in life and hope to learn from his new book. But this latter fact does not guarantee that I'm going to be a fan of his trading record. By this I mean, that I cannot look up to him like I would look up to Soros for ex or Paul Tudor Jones. This guys have been around forever and have passed the test of consistency even though they both had some setbacks but no repeated blow ups over their career. Unless one wants to argue that they also would have blown up if they didn't have backers in times of need... On that point, I think that's a red herring. Assume that all traders profiled in Market Wizards are out of business and eventually blew up. Does that imply that I should look up to Nied as a triumphing success? Sorry, but STILL a resounding NO. What it means is that I have no role models to look up to (please notice the difference between look up to and learn from, that I have no genuinely successful traders to look up to does not mean that I cannot learn from their from them) Like I said in my previous post, I believe that learning from people's failures and triumphs is a almost a necessity for all traders and a great thing. I would gladly admit to being naive about the traders profiled in the market wizards. I would really like to see more facts and articles on their failures, I haven't come across any. Maybe someone can point me to a thread that shows how Baldwin failed as an upstairs trader or how xyz blew up. I will repeat that there is a great deal to learn from Niederhoffer and that the man's unconventional research methods are helpful and insightful. Also admirable is how he came back after being totaled twice. Cohones of steel. Praise and thank him for that. But I will not praise the guy's trading record. It sucks. I hope you can see the difference.
Why does everybody focus on his trading abilities? Why not just read the book and find out if you learn something. Quite simple. Education of a Speculator is the best book i have about speculation. Did he go belly up? It's still a great book.