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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Andrew Moe

What do you believe is true even though you cannot prove it?

This is one of the most fascinating questions I have ever considered. My list started small, but quickly grew large as I questioned my core beliefs. A change of scenery, taking my daughter to the mountains to see snow for the first time, provided fuel for the fire. Much can be learned from a 3 year old in the snow. My list grew. Market related thoughts on the subject follow.

1. Inside information runs rampant in the markets, but the outcome is not always what is expected. Ask Martha.

2. Except in extreme cases, the market is ambivalent about news. It is the excuse rather than the reason.

3. Zero. For as long as I have worked, I have been an entrepreneur. The first dozen or so businesses I started all failed. I know the meaning of account balance = 0. In fact, the lion's share of the profits from my first successful venture went to pay off all the debts I incurred prior. While I am proud to have never declared bankruptcy, I have come very, very close. Zero can have a huge impact on your life. As far as your money goes, it is a concept that you want to avoid. It is the destroyer.

4. Infinity. On the other side of the scale lies the mind boggling concept of infinity. It somehow relates to circles and thus to zero. We have instinctively chosen a symbol for zero that would be more appropriate for infinity. Infinity holds the promise of forever, everything and anything. It is the creator.

5. Each generation will endure at least one depression and enjoy at least one major bubble. It is as though we must all learn these lessons for ourselves.

6. The Key to Rebecca is a myth. There is no magic bullet. But if you have enough bullets, you can win the war.

7. Regimes propagate on many scales concurrently.

8. The evolution of mathematics has gone private. As you would expect, it pays better than ever.

9. Cycles change, but old cycles are frequently born anew, sometimes with a shiny new label.

10. Trend following has a place in the ecology of the markets. Mr. Henry has roared back (after his Red Sox broke a trend, no less).

11. Quantum computing exists but the software is primitive. This decade's billionaires will be those who capitalize on the situation.

12. Cheap power is within our grasp. More billionaires.

13. Big bandwidth to the home. More billionaires.

14. Robots. More billionaires. Not man vs. machine. Man running machines. See Mr. Carstens.

These are my market related conjectures. I welcome yours.

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