Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.



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A Reader Writes:

Sorry for the imposition. My wife, who I met while I was living in the now famous resort of Phuket, is from a city in Thailand named Rannong. The city is on the Andaman Sea just where the south tip of Burma meets Thailand. Needless to say there has been severe damage to property and lives during recent events. While my wife's family was thankfully spared, we will be going over there this weekend to do what we can to help many thousands of people re-build their relatively simple lives. These are people who have and need little, but currently have lost everything and the ability to get it back. Not exactly sure what we will do other than try and provide and distribute fresh food and water. If anyone on your list would like to help in anyway, the can contact me at

Thank you very much for any consideration.

Victor Niederhoffer Responds

One transmits this with one must say, a certain ambivalence. I stand amazed at the market's positive reaction to the tsunami. I believe with Julian Simon that the most valuable thing in the world is a human life. And the destruction in human life, here the greatest in the last century. Many Einsteins and Beethovens and da Vincis among them. One must realize that the stock of world wealth is depleted by the loss of infrastructure in the trillions here. And this should exert a empathetic movement on world stock market values. And of course the inevitable increased expectations for grains as dust clouds the earth as it did so much in the 14th century as adduced in EdSpec.

Yishen Kuik Responds:

The source of all the world's wealth is indeed in the supply of manhours offered by a human being who is blessed with Life. Oil, wheat, fish, ores are useless without the application of labour to retrieve, extract, process and distribute them.

Wise countries extend the supply of precious manhours by improving nutrition and sanitation to extend life expectancy, so they can get more out of the 20 year investment in rearing a human being.

However the economic value of each manhour is not always equal.

As Dr Sun Yat Sen observed in the 1890s - how is it that the same hardworking Cantonese people who lived in backward conditions in Canton, lived just 200km across the straits from ultramodern Hong Kong. The difference was that Canton came under Manchu rule and Hong Kong under British.

So might I posit that had Einstein or Beethoven were born in Banda Aceh, the world might never have known them because their talents would not have been discovered beyond their family, so poorly developed are the systems in Indonesia to match skills to the greater market.

And might I also posit that every manhour available in Banda Aceh, unfortunately, is not worth one tenth of a man hour somewhere else, because the leveraging effect of property rights, information flows and availability of capital have not been put in place to help people reach their fullest potential.