6/18/2005
Watch Your Euros

Having been ripped off by an Italian cab driver before, on a recent trip to Rome I computed the fare to my first night's lodging. The estimated fare was 10 Euros. However, when my wife and I arrived at our lodging, the meter showed 30 Euros. Incapacitated by jet lag, we decided that we should pay this without arguing. My wife gave the cabby what we figured later was a 50 Euro note. By sleight of hand, the cabby turned the 50 into a 20 and showed us the 20. We apologetically produced the missing 30. In net, the 10 Euro ride produced 60 Euros for the cabby.

Later, in Palermo, we asked the proprietor of a laundry what it would cost to launder 4 sets of underwear and 3 shirts. We understood the answer to be about 10 Euros. When we arrived to pick them up, the asking price was 50 Euros (about 60 dollars!). After an animated debate, the proprietor settled for 40 Euros.

Terry Oldberg

6/16/2005
How do You Explain Trend Followers' Successes?

Hi Vic and Laurel!

I'm currently reading your book "Practical Speculation" and find it quite enriching though I basically disagree with your (as it seems to me) almost entirely statistical approach (since I highly value the role of intuition) -- but that's not the point here.

Now, I discovered the interview of the two of you at RealWorld Trading where you take a strong position against trend following.

How do you "process" the fact that Ed Seykota, who, I think, can be named as "the trend follower of all trend followers" has a reputation of being one of -- if not the -- most successful speculator(s) of all times, or at least of our time (I'm mainly referring to the data about his performance mentioned in the first volume of the "Market Wizards" trilogy) (Harper Business, 1993)??...

Best regards,

Gerhard Hoeller, Vienna, Austria

6/14/2005
Dollar

I'm puzzled by the similarity of the psychology of the market, in that the EUR had (has?) expectations that go far beyond any reasonable understanding. I'm well aware that there is no such thing as a fair value in currencies and that the "Big Mac" economics don't work as logic would like, but having lived in Europe for 44 of my 47 years, I can tell you that the people are decoupling from their representatives. Much in the same way Nasdaq offered paradises of profits which became reality in only but a few companies, while their CEOs were getting rich at the shareholders' expense. To give you a further example, the consumption of eggs has doubled in Italy during 2004, while beef consumption has been reduced by a half -- eggs are protein at a much cheaper price. Furthermore, spending tends to decrease by 20% to 30% as month-end approaches and people's pockets are empty. Thanks for your time and attention.-- Andrea Mon Ravano

6/12/2005
Re: Vic's 'Glengarry Glen Ross' Review

Vic, how could an all-around businessman and hedge fundist of your caliber and your unmatched exposure state so boldly that only 1/10 % of business operates a la Glengarry Glen Ross? I don't have your experience, but I can assure you from my own limited exposure that the ratio is much higher than your 1/10%.

If what you state is true, why is David Maurer's "The Big Con" one of your favorite reads (as well as mine)? You know as well as I do that they are all around and that their survival in the business world is longer than you and I would like it to be.

Victor, they do exist and in abundance. Just because your establishment doesn't operate in this manner doesn't mean the ratio is 1/10%.

Hanny Saad

6/12/2005
Friday

Friday was a strange trading day. A smaller cap I follow released earnings Thursday night. It was everything one could ask for: better-than-expected earnings with a significant reduction in outstanding shares and upward guidance. With over $100mm short this $200mm issue, we figured Friday morning it would explode to the upside. In the first hour of Friday trading the stock was down 11%. Noticing how fast stops run, it looked like the shorts were trying to make one last stand using naked shorting tactics resembling a Livermore plunge. With one eye closed and shaking hand I forced myself to buy some at the plunge. With some luck the issue closed only down 2% for the day. Of course we all like to talk about our heroic forays so here is a not so heroic one. Two weeks ago I made out great shorting euro/dollar. This week I nearly gave it all back in the same pair. Maybe there is some kind of swan present in eur/usd, but perhaps the lesson in both trades is that if nothing has changed, neither should the position.

Yuri

6/8/2005
A Reader Inquires

As bund and gilt futures spiral ever northwards can there be any doubt that Victor is with or about to join the sorry shorts?

Victor Niederhoffer responds:

Normally we forestall memorializing any of our trades as we are so poor at it that readers might take the opposite side and exacerbate our losses. But this complainer hit the nail on the head, and so I record what I told a friend or two early this morning at 8:55 a.m. EST, June 8, circa bund 123.54.

----- Original Message ----- From: Victor Niederhoffer At: 6/ 8 8:55

Apparently the hedge funds made great profits on their bond trend following in May and several of them are boasting about these profits. Of course the fixed-income movements and many others are completely random to a first approximation, and the extra demand from barreling in on the long side must move prices out of synch for a while, and this almost tempts me to join the eclectic philosopher Zachar and take a gander from the short side, even though I forestalled trading fixed income, except for the occasional seasonal foray, many years ago.

6/7/2005
The, Er, Real Reason Behind the NYSE Message Storm

Dear Vic and Laurel,

First, thanks for your site. I check in occasionally, usually when tapped out. Not gotten to reading your latest, but enjoyed TEoAS very much a while back.

I occasionally take stock of geek / nerd tech market opinion from the slashdot.org website/blog. If you can stand that sort of thing, and cope with it's own brand of fingernail - grating noise, it's a great place to see wave after wave of reporting the latest breakthoughs, non - breakthoughs, tech flips and dives, and to take stock of the supporting constituencies. Think in terms of fractured, dissolute "Iomegans" but without the plan. Quite sure most of their stories are bad shill PR from desperate companies - which is what I watch, and adds to the fun.

But rarely do I actually laugh at something written there, and this time about it was this comment that caught me off guard:

http://it.slashdot.org/comments.pl?sid=151993&cid=12752991

If you don't recognize the form, it's in the style of Internet Relay Chat forum traffic, the kind infamous for attracting "script kiddies" , "crakers" and all manner of low brow tech discussion.

Thought I'd pass it on, FWIW.

Yours,

John Kirby

Letters to the Editor: Archive