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How To Raise a Spec Investor (Part 1), by Victor Niederhoffer
I thought it might be good to set down my thoughts as to how to become a good spec before you were born so that they might be memorialized for you and so that I would have a plan to follow. In doing this I am following in the footsteps of Mike Bastian, the hero of Louis Lamour's great book Son of a Wanted Man. Mike is being trained by Ben Curry, his father on how to be an outlaw leader and learns such things as how to survive in a desert, how to throw a gun, how to rob a bank or train or cheat at cards, how to tap a deer on its hindquarters without the dear running away, how to read sign, how to fight, how to pick a lock, and how to choose a friend,
You must learn similar things about specing, and I believe it just as important . I hope I can say to you in a few years like Mike's teacher Roundy said to him.
"You're ready. You can track like an Apache. In the woods you're a ghost, and I doubt if Ben curry himself can throw a gun as fast and accurate as you . You can ride anything that wears hair, what you don't know about cards, dice, roulette, and all the rest of it, nobody knows. You can handle a knife, fight with your fists, and open anything made in the way of safes and locks. And you got a good education so you can handle yourself in any company".
When I can say to you, "you've played and mastered all the childhood games, especially baseball, checkers and chess, you know about the long term drift, you're always ready to take out your cane the day following a panic, you're always trying to reduce your costs on every trade so that the rake and vig don't do you in, you can calculate the odds of any situation using the frequentist or Bayesian approach, you know how to take advantage of the power of compound interest, you know that music is the universal language, mother nature is the best teacher, and that, you love and learn everything about nature, you always consider the after "service" impact of all your investments, you are as economical in your habits as George S0r0s or Hetty Green or John Getty, you know that there's no such thing as good returns without risk, you realize that almost every aspect of speculating is clouded in a landscape of deception and disguise, you have been educated in all the sciences, the maths, the economics, the ecologies, the psychologies, and the geographies, you've learned how to gamble and how all gamblers die broke, you know how to control your emotions, especially romance and how to keep them out of the spec day and fray, -- then , I'll be ready to go somewhere far off and live where it's nice and quiet and hopefully not too hot and know like Ben Curry that You're Ready.
But how to get there, especially if I'm not around for the day to day. Let's start with... (to be continued).