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The Chairman
Victor Niederhoffer
On
June 15 at 3:12 PM, the S&P futures moved from 1134 to 1128 in one minute in conjunction with an announcement that bomb squads were seen on 57th
Street on
Manhattan. It elicits many thoughts. 1: Hope springs eternal.
The bears had their day at 9:11 on 9/11, 2001, and ever since they have been hoping, playing for a
repeat. 2: Same thing with the big decline on Friday, 10/16, 1987. That was followed by a big decline on
Monday. By waiting for a recap , playing for the short at
Friday close after a big down day, they lost more in the next 10 years by factor of 2 than they made by playing the well-known effect first discussed by
Cross and myself in 1966 in JASA proceedings. 3: Morse is
back. He once made money with Trolley. And when he was seen as a ghost at
Trinity Church several years later, the market rallied an immediate 5%.
4: What fools these mortals be. How much money can you lose thinking that some police action is your
ticket to take advantage of an immediate $200 billion decrease in the market?
5: Bad memories of the man from S&P spotted at Bangkok airport with a briefcase ... he obviously
was going there to downgrade the bonds again while I held the
Thai market, and that was always a predictor of similar moves
from Moody's, Fitch, S&P, and Thai rating agency itself,
each accompanied by a 5% decline. 6:
The herding behavior of humans. They take such comfort in following their leaders, suspending belief and mass action.
Herd Behavior