I noticed this thread, and could not resist re-posting my original comment http://www.elitetrader.com/vb/showthread.php?s=&postid=1119954&highlight=Neiderhoffer#post1119954 Also I am particularly interested in this quote taken from the original post on this thread. "I have complete trepidation about going under again. I have seven kids and I couldn't afford that," he says. "But I don't know how to make money without a lot of risk." From my standpoint having managed money successfully over a period of more than a decade, I have to smile at this. It seems to me that managing risk is the real challenge for a professional. When its not YOUR money, it is easy to make big bets, and to accept that you will either be a big winner, or blow out your accounts. Mr. Neiderhoffer doesn't demonstrate much in the way of professional expertise does he? Finally, I wonder how investors feel about his "program" now. Unless he can stage a terrific recovery, I think he will see a lot of redemptions and account closures this year, leading ultimately to his departure from the business. Somebody should poke him with a fork, cause honey, he's done
Let's talk about the facts instead of rumour and innuendo. Vic's fund was up close to 50% a year over the last 3 years. He is currently, as of the date of the article, down 12%. This is absolutely stellar performance for any money manager. He has superior money management systems in place and trades a variety of styles. Yes, he had a poor month--- however, what better time to increase the risk, than when one is up huge---30plus % for the <b>year</b>? Those who don't understand, or simply refuse to understand the nature of risk taking continually neglect the fact that risk is increased and decreased based on a variety of factors---one being prior performance--- superior prior performance allows one to increase risk, whereas inferior performance forces one to pull back and play it safe. Niederhoffer is far from finished. In fact, the game has just begun. best, surf
ROR, after a huge run u should concentrate in reducin' exposure and risk not martingalin' it...what goes up comes down and same is for a u acct, a fund or whatever. great risk management and he blew up twice+ he gave back all the 30% + 15% in a couple of months...talkin' about idolizin' here. great logic surf and u see the results speak for 'emselves...same u, begun to make darin' bets after a good run and went downunder for the yr in a couple of trades.
dynamic fashion...what are u injectin' crack into u groin? the strategy he employs he pretty much straightforward..he just sells otm puts and has zero hedge in place...my granma' can do that. i got plenty of respect for hedge fund managers but not for this self-centered freak'o, hes doin' nothin' out of the ordinary and has no risk management clue WHATSOEVER.
no? since u are worshippin' him night and day why dont u illuminate us in the matter....if he had some kinda risk management in place he wouldnt have lost 50% of his money in a month, innit....only way to lose that much is with a single, concentrated, un-hedged pos...innit obvious?
I am sorry Surf, but on this one you are wrong and Bitstream is right. You say the time to increase risk is when you are nicely up. I can see the certain logic in it, but I would say 30% was such a good performance, that I assume his investors were already happy. At that point capital preservation should have been much more important then shooting for the stars. Also if you recall last year you stopped trading in mid-November, when you were nicely up. You didn't start to risk more and try to make more, am I correct? So it seems to me that you are preaching something here but you are practicing something else. Also, if I am correct June is the 2nd bad month for him, after May. Correct me if I am wrong, but he dropped another 4-8% in June. Now I don't have a problem with selling puts, if I think the market will go up or at least stay even. But selling puts all the time seems to me a bit too risky...
When you are trading well, trade more, get bigger, be more aggressive. When you are trading poor, size down, trade smaller until you turn things around. Then, when the inevitable drawdown occurs, you cut down your positions and manage your risk until you start to produce returns again. This is my MM strategy and it has served me well. I don't claim to be VN, but have been trading full time for five years, have made and continue to make very good money trading, so I consider my opinion to be "qualified!" As for his strategy, do you really think that VN discloses what he's doing to reporters, and to his competition? I don't think so!
our situation is a whole diff matter, first hes not tradin' but relyin' on mkt direction, second hes managin' a fund and the returns he'd achieved were more than respectable, should have been become more prudent after 3good yrs and a bull mkt likely closin' in to an end and concentrate protectin' those gains and mantain' his investors happy, not get greedy and push his luck even furhter....at least for the time bein', innit.