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The Chairman
Victor Niederhoffer

12/24/04
Victor Niederhoffer: Reduced Capital

In talking about the values of real estate on Wall Street in 1900, Garret Garett says in Where the Money Grows: "You pass through the low-rent establishments of the tailors, stationers, tobacconists, and small shopmen. There are also a few dark places below street level , where even yet one whose capital is reduced may wager a dollar on the going up and down of one share of stock, stop one's loss at ninety-five cents, and lunch on the remainder." One is reminded of all the losers I have met who have a two-bit mentality and try to take out very small profits relative to the bid-asked spread and commissions. These have been the invariable losers I've come across and indeed after rescuing a few of these from certain death, some of these actually have, are or will be achieving gainful employment with me. But the thought of it still makes my blood boil even now. And whenever I take a trade that has just one small way of getting out with a horizon of a few hours or two, I grow apoplectic that my own pettiness in thinking it possible to make a fast buck has made me succumb to the same syndrome I rail against and remedy in others. 

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