I am getting bored with this thread, but all the numbers are in this book, readable online: http://www.amazon.com/Scenarios-Man...=sr_1_1?s=books&ie=UTF8&qid=1294766684&sr=1-1 Click Look Inside, then type in Niederhoffer, or just read page 100-110, basicly Vic's life in numbers, including annual returns for Matador/Manchaster... Included Manchaster's investing policy/strategy description. Interesting tid-bit: Zeckhauser left NCZ in 1983 because he thought Vic was taking too much risk and "no matter what your edge, you can lose everything." A few of the pages not showing you have to use google's bookreader: http://books.google.com/books After blow up/recovery numbers are on page 110....
Thoreau, it's admirable that you have stuck by your friend. We all can appreciate friends like that. But is it a fact or not, he blew up twice? I have read about this fellow and there are indications that he is likely bi-polar. A very treatable mental disorder. The bi-polar people I have known personally were, without exception, bright, charming, and energetic, in their manic states at least. Their exploded egos were also a prominent feature. I don't know if Mr. Niederhoffer is bi-polar, I am just suggesting that he could be. In any case, his track record, the probability of his being bi-polar, and the warning sign presented by repeated returns of high two figures or greater should be more than enough to steer any prudent investor away from him. Because of the relationship between risk and reward in the financial markets, the statistical probability of achieving exceptionally high returns repeatedly without high risk is very low. With hedge funds, high risk is often associated with too much leverage being used. Regardless, only gamblers and others willing to take on very high risk should place their money with such a manager. Let me add that there may be apparent exceptions to the risk reward relationship, but on close examination these "exceptions" will be found to result from access to inside information (having the Treasury Secretary as a friend could be helpful), illegal activity, or the ability to directly influence market direction. In other words, in these exceptional cases, the risk is not what it is presumed to be. Mr. Niederhoffer, does not seem to be an exception.
I agree with the above. Victor is basically a gun slinger. Having said that, it might not be a such bad idea just to give him say, $50k, let him do his gunslinging and collect $tens of millions from him at the end of the year. Have you thought of doing that, thoreau? "Quote from thoreau777: ... If you knew Victor's fund performance at the end of this past year, you will cut your right arm off and give him your daughter for the opportunity to invest in his fund. Did you know that at many times he multiplied his money thousands of percent in a year, especially after his most difficult periods? That famously he turned $50,000 into nearly $50 million? "
I'm thinking the same thing but using GMXR. Bought two thousand yesterday. Stk should not be $6. Good luck! ~stoney
Visaria, It is not as easy as it seems to multiply your money many times over within a year. Many investing contests ask just that, with a particularly famous one where $10 thousand dollars (real money trading), is multiplied close to one million dollars (typical amount that wins the contest). A famous trader Larry Williams won such a contest and discusses it in seminars. It may seem easy to simply sell OTM SPX puts and do this with no effort and skill, but in practice maybe less than 1/10 of 1% of any traders can do this. Consider that last year was a spectacular year to do this strategy, but you have to watch out for the landmines. Consider the week of 5/3/10, the SPY went from 119.38 to 111.26 and closed the week towards the lows. If you were short options and did not hedge, an entire year's worth of gains would have been ruined. Recall that selling OTM puts on the SPX is not just a bet on direction, but also a bet on contracting volatility. So if you are right, and your short strike is not pierced and is close to where the underlying gets pinned on expiration, you can make money on the delta, vega, and also the option "charm". I do not trade options as much anymore, but it is an incredible way to multiply your money, as I have done. Simply selling OTM puts on the SPX during a period of low volatility (like the current environment) without hedging is difficult. You cannot even get meaningful premium when you go far out. To get even 10% on a .10 delta put option these days on ROM, you can only venture out just a few handles on on the SPX. A minor news event can easily let the powers that be harvest your account for their next son's bar mitzvah.