Surf,why cant you simply accept the fact that as gifted as Vic is as a researcher,he has fatal flaws that he is incapable of overcoming. The mere fact that many successful traders have studied under him without spectacuarly blowing up should be the proof in the pudding.From my vantage point,you are much like him.. As I am sure you know how and why he blew up as well as how he made his money,tell me why an over leveraged premium seller/ mean reversion fanatic is worthy of your worship.I simply dont get it,and if you had to invest every last penny with someone,would it be someone like Vic,or someone like IZZY from Millenium? If the unfathonable answer is Vic perhaps you should listen to the musical lyrics of your god more closely... "In both cases I was in over my head. I didn't have the capital to be strong enough to provide a backup in the case of unforeseen events. I didn't have a proper foundation. I was playing with adversaries who were stronger than me and who actually made the rules. My base of operations was not diversified enough, and I was vulnerable to forces I couldn't withstand. I was too vainglorious. In my opinion, those are recurring errors behind most disasters." "I thought that because my method worked in markets that I knew about and had quantified, I could apply the same methods to something I didn't know about. And I had as an example [George] Soros, who would always say, "I made the most money in things I don't know about." "I reached for things that had a qualitative, but not quantitative similarity [to previously successful strategies" "I still think that the crash of Oct. 27, 1997, was basically due to brokers running my position against me, knowing that I was on the ropes. The market had its greatest drop in the previous 10 years that day. And then the next day, once they were able to force me out, it went up more than it dropped." "The movements in volatility were greater than I had anticipated. We were prepared for many different contingencies, but this kind of one we were not prepared for" "We identify anomalies in the empirical distribution of current prices — then exploit these in a risk controlled way. My basic ideas about the creative power of the market, buying in panics, buying on weakness—I don’t think what has happened has anything to do with that stuff. I am going to keep going, for better or worse."
My bad Hootie, she says it in the first minute. "If you know where your exit is..." I agree with her 100%, how you execute is much more important than what your prediction might be.
There,s a couple of things wrong with LBR's logic. First, even though she sort of acknowledges the importance of good entries, she basically argues that entries really don't matter by claiming that even random entries can be neutralized by great exit strategies that ultimately produce positive expectation. I submit this positive expectation is illusory; it disappears once you take into account commissions and slippage. Her further claim that great entrances can be neutralized by random exits assumes that she (or anybody else) knows how to routinely produce great entrances. I submit that what LBR thinks are great entrances are in fact little better than random. Anyone who can routinely produce great entrances would soon be outperforming Warren Buffett. Thought experiment: suppose you could predict with 100% accuracy which direction price would take off in after you entered a trade and you always traded in that correct direction. What are the odds of random exits completely neutralizing that unique advantage? Exactly.
Did you I am a huge fan of IZZY, being trained in the hedge fund business by one of his top global macro guys--- in addition to being close with several other of his team. With that said, I fully recognize that VN has serious flaws. BUt as you say, the proof of the pudding is that others without these flaws have become consistent world class money managers from his tuteledge. Yes, i have been influenced greatly by VN and I take what you say as a compliment-- thank you. surf
I read Brandts book and it comes across as too simple. He must be holding back a lot. He was a commercial hedger for Campbells (the soup folks for one). A grains and soft commodities guy. Boring stuff maybe. Is "blowing up" accepted in that business? That was probably excellent training to manage risk and on a montly basis consistently make a good deal more than you lose. VN seems like a big brain, great athelete , and super competitive. EofS was a lively read.
With that said-- folks that invest with VN are seeking particular metrics and possible returns. People who go with izzy xpect a different metric and possible returns. Each has a purpose and fills a niche. We had an investor who was invested in over 50 hedge funds-- each was differentiated. We are not talking about some millionaire dentist investors in the hedge fund business--- but serious allocators and the wealthiest , most financially sophisticated people/groups on earth.
I would consider: Ed Thorp the best in terms of track record 19.1% per year, 227 winning months and 3 losing months all under 1%. Next in line would be John Arnold, got triple digit gains on high 9 figures/billions and took billions in income. Another consistent guy would be George Soros, $40,000,000,000 in profits from his quantum fund over 40 years. These guys were all managing waaaaayyyy more than Vic and got huge returns without blowing up. Both theses videos are from the same time period: Vic looks bitter and upset with the way things have turned out. Soros on the other hand is in a different lane along with Thorp, Tudor Jones, Dalio, Cohen, Paulson, Coleman, Griffin and Arnold.
Good point and great videos. VN is a tiny minnow compared to thise giants u mention. However, it must be noted that VN traded for Soros during his peak money making years.
Let's settle this for good: you follow Vic and others choose to ignore him. If you can pick his brain then good for you , I did not take much away after reading his books. I strongly disagree and dislike his approach to trading and much more dislike his attitude. Cheers