http://www.dailyspeculations.com/wordpress/?p=10033 Commenter writes: Vic, this being a public forum you probably wont reply, but have you ever thought YOUR method is mumbo jumbo and you were just smart enough to stay your whole career on the right side of the drift, with humongous leverage? Think about it. Your junkyard-boeing analogy doesn't hold water. Soros way works. Munger way works. Icahn way works. Even Buffett way works. Time tested. To the $ billions. Yours didn't stand the test of time, not once, but multiple times and this is the most robust stat test. Maybe you were just lucky to skim enough OPM residuals to provide a comfortable life for your family, and more power to you, but otherwise to an outsider, this looks like a huge waste of one's abilities. Victor Niederhoffer replies: Yes, I often feel my methods are mumbo jumbo. And I am always trying to improve based on that supposition. I have had enough pitfalls and debacles so that if I didn't doubt my methods, I would be even more of a useless idiot than you think I am. My self skepticism is compounded by the fact that I am pretty much the founder of the field of using statistical interactions to predict markets, and my former employees who I have taught are legion, and use vast financial and human resources that dwarf me by many thousand fold in their extent and erudition. I try to learn from people like Soros and Munger and Icahn, most of whom I have worked for or studied in one way or another. What I learn from them is mainly that they are one with the idea that has the world in its grip, i.e. they profess a line of keeping man small while rising above the tide through clever use of the service and public attachment to the forces of agrarianism to deflect competition and attrition. Luck and the path has much to do with it also. My family and I are quite cognizant of your criticism, and are never hesitant to deflate my exuberance with sobering warnings and critiques such as yours.
"What I learn from them is mainly that they are one with the idea that has the world in its grip, i.e. they profess a line of keeping man small while rising above the tide through clever use of the service and public attachment to the forces of agrarianism to deflect competition and attrition. Luck and the path has much to do with it also." poor fellow cannot admit that soros and buffet are better men then he is. he should not despair. he is just like a lot of posters on ET, full of it but he is better than the posters because he finds people to fund his losing endeavors.
It would seem that the following sentence, if indeed , Niederhoffer is not misquoted, may be a sign of muddled thinking, or possibly even a mental disorder; in Niederhoffer's, case such might be easily explainable. "What I learn from them is mainly that they are one with the idea that has the world in its grip, i.e. they profess a line of keeping man small while rising above the tide through clever use of the service and public attachment to the forces of agrarianism to deflect competition and attrition."
To understand, first look at Soros and Buffett's Politics. In both cases they support wealth redistribution, egalitarian government intervention, and the party that most supports these things. Next, look at what they have actually done in their careers. Buffett is a master of using tax various shields, he benefits mightily from the inheritance tax by being able to buy family businesses on the cheap, plus via his insurance operations (among the biggest supporters of estate taxes are insurance companies), and his estate will never be fully taxed as he is putting almost all of it in a charitable foundation. Soros, I believe was grandfathered in with his offshore fund such that only the income he pays to himself in the USA is taxed, much of the rest of his investment gains have been highly tax advantaged offshore. Yet he supports the left and statism at every turn, including rabble-rousing street activists. It appears that in 2008, Buffett was paid back in spades with many crony-capitalist investment opportunities. Soros likely has benefited from personal contact with all the top bureaucrats, etc, to get inside info on policy changes. Would either of these men had had such opportunities if they had been, say, staunch libertarians? The basic idea is that these big players are crony-capitalists who work the system to thwart competition, while then finding ways to exclude themselves from the policies that they advocate for.
Huh? It makes perfect sense --- i think your comment is more reflective of Your inability to grasp non linear ideas.
In his statement he includes the info that proves his methods are not mumbo jumbo: "...the founder of the field of using statistical interactions to predict markets, and my former employees who I have taught are legion, and use vast financial and human resources that dwarf me by many thousand fold in their extent and erudition" If anyone wants to get a picture of what a prominent former employee and fund manager thinks of him, listen to Mike Covel's interview with Toby Crabel (google it). He is himself one of the top futures traders of all time, and might very well be the top teacher of trading of all time - whatever his other flaws might be (and we all have them).