Jan

6

Markets from Networks: Socioeconomic Models of Production, by Harrison C. White, is one of the most realistic and profound understandings of the the entire industrial structure. highly recommended.

White argues that the key to economic action is that producers seek market niches to maximize profit and minimize competition. As they do so, they base production decisions not only on anticipated costs from suppliers and anticipated demand from buyers, but also by looking at their competitors. In fact, White asserts, producers act less in response to actual demand than by anticipating it: they gauge where competitors have found demand and thus determine what they can do that is similar and yet different enough to give themselves a special niche.

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Jan

5

Markets approve

January 5, 2026 | Leave a Comment

today every major us market is up substantially showing the approval of the Maduro capture and its impact on wealth.

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Jan

1

From the archives:

Elroy Dimson, Paul Marsh and Mike Staunton, Triumph of the Optimists. We cannot say too often that if you read one investment book, this should be it. Ever since its publication in early 2000, it has informed our approach to the market and served as a source of trading ideas. The first comprehensive international market database, this book by three distinguished London Business School professors belongs on the shelf of every investor, trader, policy-maker and economist. In all the sciences, great strides in seeing things how they are came about after the compilation and classification of data. At last we have something that builds on the University of Chicago’s Center for Research in Securities Prices, the U.S. database that led to an explosion in market knowledge and testing a generation ago.

Elroy Dimson, Paul Marsh and Mike Staunton of the University of London Business School worked together on this massive project. Within Triumph's pages, an investor may find definitive information on inflation adjusted returns for stocks, bonds and treasury bills, real dividends, correlation between markets worldwide, and the relative performance of value and growth stocks.

Unlike most books written by academics, Triumph avoids hasty generalizations and biased sampling procedures. The authors rightly fault earlier investment studies for arbitrary selection of starting and stopping points, the tendency to include the good and exclude the bad, and a parochial focusing on a small slice of the global picture. Their work epitomizes outstanding investment research.

Great works can be created in humble circumstances. Shakespeare was an actor and entrepreneur who reworked old plots so that his theatre company could make a buck. Cervantes wrote a parody of the fashionable knight errantry books to repay his debts. Dimson told us that he and his colleagues thought of Triumph as "a labor of love, just a small contribution that could lead to a paperback meant for light reading on planes". He added, "Our families would be less kind about our fixation." Staunton, who collected the data, prefers to gather statistics by himself from original sources at specialized libraries instead of delegating the work.

The main conclusion of Triumph is that a random selection of US stocks returned 1,500,000 percent in the twentieth century. Yes, big losses occurred at times, such as the back-to-back losses of -28 percent and -44 percent in 1930 and 1931, or the 10 years from 1970 to 1979 when stocks hardly budged while the dollar lost 28 percent of its purchasing power.

But overall, adjusted for inflation, the return on US stocks amounted to 6.3% a year, better than any other class of securities.

Dec

30

Only the strong

December 30, 2025 | Leave a Comment

making you hold for the rounds at 6950 and 7000. only the strong.

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Dec

28

The book Letters From A Self-Made Merchant To His Son was a bestseller in 1901 and is still one that every kid and businessman should read. it's advice from a meatpacker for his son and goes thru Harvard and is based on the founders of Armour and co and Swift.

it's filled with advice on a proper way to choose a girl and how to be successful in business. Highly recommended.

Here is a good summary of the letters from the best book on business and life wisdom that there is. The timeless advice is more relevant for today than any new work could be. Just buy it. Read it. Implement it.

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Dec

23

Force of destiny

December 23, 2025 | Leave a Comment

force of destiny sp at 7000 now at 6900.

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Dec

20

Low range of S&P

December 20, 2025 | Leave a Comment

amazingly low range of sp last 2 months with half of all prices in 6800 handle and sd of 9.

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Dec

16

Oil at $55

December 16, 2025 | Leave a Comment

oil at $55 a barrel. all inflation numbers very bull for S&P and USD. definitely deserving of a rate reduction. except for chance gardner posturing.

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Dec

11

why it's better to have another entity produce things:

Demystifying Tariffs

A free market operates on Ricardo’s principle of comparative advantage, where trade exists because no country is self-sufficient. Countries either lack resources (e.g., India importing crude from the Middle East), infrastructure (e.g., the US importing pharmaceuticals from India), or expertise (e.g., the US and China importing electronic chips from Taiwan). Countries should specialize in producing goods and services with lower opportunity costs and export them, while freely importing others. This leads to better quality and lower costs for consumers.

4 Quotes on Free Trade from Classical Economists

Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expence. In opposition to this narrow and malignant opinion, I will venture to assert, that the encrease of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far, where all the surrounding states are buried in ignorance, sloth, and barbarism.

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Dec

10

the fifties are the new rounds always to be breached from below.

is the fed chair fed with answers that will bull and bear and how can he hurt trump?

sherlock holmes, alan pinkerton and wikipedia hear completely opposite varsions of the Molly Maguires. the first two are reliably, the third is woke trash.

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Dec

10

Ye Outside Fools!

December 10, 2025 | Leave a Comment

Is not our business quite as good as that of those who lend their names to float the foreign loans of countries which are in a state of semi-bankruptcy, and which will fail to pay as soon as they can get no further loans? It certainly does much less harm. They catch the real investor, we but clear the weaker speculators out.

Ye Outside Fools! Glimpses Inside the Stock Exchange, by Erasmus Pinto, broker, 1876.

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Dec

7

Andrew Carnegie

December 7, 2025 | Leave a Comment

Andrew Carnegie learned telegraphy by heart.

Andrew Carnegie

In 1849, Carnegie became a telegraph messenger boy in the Pittsburgh Office of the Ohio Telegraph Company, at $2.50 per week ($94 by 2024 inflation) following the recommendation of his uncle. He was a hard worker and would memorize all of the locations of Pittsburgh's businesses and the faces of important men. He made many connections this way. He also paid close attention to his work and quickly learned to distinguish the different sounds the incoming telegraph signals produced. He developed the ability to translate signals by ear, without using the paper slip. Within a year he was promoted to an operator.

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Dec

4

previous 20-day high at 6875 on 11-12. must be broken soon.

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Dec

2

Cochrane: Britannia's Sea Wolf, by Donald Thomas, completely exonerates Cochrane from the insider trading scandal. Cochrane made less than 1/4 of a %, and much of the conviction against him depended upon the identification of a red versus green coat.

Monte Walsh has everything a western should have and is easily more exciting and deep than anything of Lamour. Why is it so neglected?

Jack Schaefer was a journalist and writer known for his authentic and memorable characters set in the American West. Schaefer received the Western Literature Association's Distinguished Achievement Award in 1975 and the Saddleman Award in 1986 from the Western Writers of America. His popular Western novels include Shane (1949) and Monte Walsh (1963).

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Nov

29

American Colossus: The Triumph of Capitalism, 1865-1900 summarizes the work of Rockefeller, Carnegie and Morgan in building America and pictures a battle between Adam Smith and Thomas Jefferson.

Also:

Why We Run: A Natural History, by Bernd Heinrich

In Why We Run, Heinrich considers the flight endurance of birds, the antelope's running prowess and limitations, and the ultra-endurance of camels to understand how human physiology can or cannot replicate these adaptations. With his characteristic blend of scientific inquiry and philosophical musings, Heinrich offers an original and provocative work combining the rigors of science with the passion of running.

26 days and 0.50 away from last 20-day high very bull.

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Nov

26

Thanksgiving is about sharing prosperity, and it's a good time to think about where prosperity comes from. The Pilgrims figured it out in 1623. We'll retell that story as we celebrate the way it lives on in countless U.S. families and companies today. And in particular at one company, McDonald's (MCD, news, msgs), that in its humdrum way beautifully demonstrates the source of prosperity and the American way of life.

The Pilgrims started with so little. They had to hide in England because the authorities considered them dangerous. They fled to Holland but found themselves compelled to take menial jobs. On the way to America, many of the company died. They lost their way to Virginia and landed in Massachusetts just as winter set in. The Virginia Co., their backers in London, went bankrupt and couldn't send relief supplies.

To cope with want, the Pilgrims made the same mistake that so many countries do even today: They divided all their land, efforts, supplies and produce in common, to each according to his need.

As always in such systems, need surpassed supply.

The Pilgrims spent their first three years in America suffering from hunger, illness, cold and infighting. People stole from the common stores "despite being well whipped," according to William Bradford's "Of Plymouth Plantation."

Bradford, governor of Plymouth Colony, records what happened next: "They began to think how they might raise as much corn as they could, that they might not continue to languish in misery. After much debate, the Governor decided that each settler should plant corn for themselves."

Under the Land Division of 1623, each family received one acre per family member to farm. That year, three times as many acres were planted as the year before. Prosperity was not long in coming.

The Pilgrims turned from their Old World system of common ownership to incentives. They didn't go that way out of ideological conviction, but because they didn't have the luxury of waiting for support to come to them.

How many families in America tell the same tale? "When we came here, we worked hard and our lives were better."

But that wasn't the end of the story. Before the switch to incentives, the hungry settlers were at each other's throats. Hard workers resented receiving the same portions of food as those who were not able to do even a quarter of the work they did. Young men resented having to work without compensation to feed other men's wives and children. Mature men resented receiving the same allotments as did the younger and meaner sort. Women resented being forced to do laundry and other chores for men other than their husbands. Many people felt too sick to work.

But when they were allowed to farm their own plots, the most amazing thing happened. Everybody — the sick, the women and even the children — went out willingly into the fields to work. People started to respect and like one another again. It wasn't that they were bad people, Bradford explained; it's just human nature. Adam Smith came to the same conclusion later, and Friedrich Hayek updated Smith's ideas for the 20th century. But we don't need to go back to New England for understanding. Similar outcomes can be seen at McDonald's every day.

For centuries, people on the lower rungs of the social ladder weren't able to eat meat. They ate grains and beans. But people like beef. And chicken.

When McDonald's started popping up in every neighborhood, all of a sudden there was an affordable place for families to eat. Previously, one of the main differences between the upper and lower classes was that the rich could eat out. Even if the poor could afford the tab, they couldn't hire baby sitters, and they couldn't bring their kids to the elegant establishments designed for the rich because they would have disturbed the other diners.

Most kids don't like fancy restaurants anyway. They want fries, not polenta with wild mushrooms. They want fried codfish, not turbot. They want burgers, not lamb chops.

How many people has McDonald's made happy? How many families has it brought together? How many Happy Meals have been eaten there? How many kids have enjoyed the playgrounds? How many tired workers have been able to catch a quick meal? How many women are able to pursue careers and other productive activities and dreams because McDonald's has freed them from the task of having to cook every night?

The Pilgrims might have served 200 or 300 American Indians at their Thanksgiving feast. McDonald's serves 26 million customers a day at 13,700 U.S. restaurants.

For the traveler, McDonald's is a home away from home, offering so much for so little. The restrooms are clean. And McDonald's serves hot strong organic coffee in smooth cups of some wonderful material that keeps liquids hot without burning the hand, shaped to fit into the cup holders that just happen to be in your car, with carefully designed tops that permit just the right amount to be sipped.

No regulator, no fascist dictator, no socialist planner decreed sip tops or cup holders. But how many late-night drivers have died for the lack of a good cup of coffee? What could be more munificent than saving lives?

And the story doesn't end there. Consider the employees of McDonald's. How many people have worked there and learned the most important lesson in America: The customer is always right?

The anti-this-and-that people who demonstrate against profit incentives and free markets like to single out McDonald's as a symbol of modern capitalism. (They don't mean that in a nice way.) As the McLibel Support Campaign puts it: "(McDonald's) has pioneered many business practices that have been taken up by others, and have come to represent a symbol of the way that society is going –'McDonaldization.'" But when have you ever seen an unhappy customer at McDonald's? There couldn't be too many of them, because about 10% of America eats there each day. Given the choice of cooking at home or going to other restaurants — and competition ensures that there are other restaurants — people go to McDonald's because they trust they'll find good food, quick service and value for money. What could be more munificent, more representative of sharing the fruits of hard work than McDonald's?

McDonald's and the Pilgrims are the essence of America. The people work hard, motivated by the chance for profits. They provide a welcome to others, whether to Indians joining in harvest celebrations, or to customers looking to satisfy their hunger. Their work results in high quality, low costs and family togetherness.

Those humdrum, everyday attributes are what makes America great. That's what we should be celebrating. It's the source of all our munificence, from the first Thanksgiving to today.

Nov

26

Speculator & Son

November 26, 2025 | 3 Comments

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Nov

24

An earlier and more illuminating version of I, Pencil from The Marvels of Modern Industry by William Norman Mitchell 1940:

Have you ever thought of all the work and plans and endless pains in far distant places which were necessary to supply so simple a thing as your breakfast? If you have, you doubtless found that even to enumerate these services constituted a lesson in world geography. There were, perhaps, grapefruit from Texas, sugar from Cuba, syrup from Vermont, toast made from flour milled in Buffalo, possibly from wheat from the valley of the Red River of the North. Butter and cream came from Wisconsin farms, bacon from Iowa, and coffee from distant Brazil. If you looked farther you may have found that this simple meal was served with plates of Bavarian make, on a cloth which was the product of Belgian skill, covering a table fashioned in Carolina hills from Honduras wood, with varnished finish made from gum brought from Algiers. Fork and spoon came from New England where they were fashioned from silver from Nevada's mines, while the knife blade possibly was made of Sheffield steel from iron ore mined in Sweden or war-torn Spain, and by its silvery and stainless sheen indicated that it had drawn upon the nickel from Canadian mines and the chromites of Rhodesian Veldts. And so on, in ever widening spread, until the whole world is drawn into a tangled web and bound on the common mission of serving you your breakfast!

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Nov

22

Thanksgiving soon

November 22, 2025 | Leave a Comment

a little thankagiving treat coming shortly. dog stole a bone and hiding it over weekend.

OIL AT $58. don't have necessary data for inflation numbers. an appropriate vestige of remainng use for input-output but on prices not output.

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Nov

20

That’s enough

November 20, 2025 | Leave a Comment

that's enuf lobagolaing at 6542

Mixed Identity : LoBagola, the Black-Jewish African Prince

An African savage’s own story chronicles the adventures of LoBagola, a self-proclaimed “Black-Jewish Prince,” as he traveled from his pretended “African birth place” to Great Britain and America.

LoBagola was, in truth, the alter ego of the Baltimore-born African-American, Joseph Howard Lee, who grew up in a life of poverty and deep racial discrimination. In response, Lee fabricated much of this autobiography, initially published as authentic by the leading New York publishing house of Knopf.

Gemini:

In the lore of investors, a LoBagola refers to a market pattern observed by famed speculator Victor Niederhoffer. It is likened to an elephant stampede: the market surges in one direction and then quickly returns along the same path, moving "back and forth".

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Nov

20

Following the Equator has a good chapter on thugism and thugee is still part of culture i've found.

Thugee became known to the British authorities in India about 1810, but its wide prevalence was not suspected; it was not regarded as a serious matter, and no systematic measures were taken for its suppression until about 1830. About that time Major Sleeman captured Eugene Sue's Thug-chief, "Feringhea," and got him to turn King's evidence. The revelations were so stupefying that Sleeman was not able to believe them. Sleeman thought he knew every criminal within his jurisdiction, and that the worst of them were merely thieves ; but Feringhea told him that he was in reality living in the midst of a swarm of professional murderers ; that they had been all about him for many years, and that they buried their dead close by. These seemed insane tales; but Feringhea said come and see — and he took him to a grave and dug up a hundred bodies, and told him all the circumstances of the killings, and named the Thugs who had done the work. It was a staggering business.

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Nov

19

A good time to buy

November 19, 2025 | Leave a Comment

a good time to buy. gentlemen haven't liked stocks now at 6630.

just getting started at 6650.

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Nov

8

"Tevye the Dairy Man" - one of my favs in High school.

In those days I was not the same person I am now. That is, I was the same Tevye, but different. As they say, the same old woman but under a different veil was then - may this never happen to you - as poor as poor can be, although, to tell the truth, I am by far no rich man today. You and I together should this summer earn what I would need to be as rich as Brodsky, but as compared to those days I am today a well-to-do man with my own horse and wagon, with a couple of, knock on wood, milch cows and another cow that is due to calve any day now. It would be a sin to complain, we have cheese and butter and fresh cream every day, all earned with our own labor, we all work, nobody is idle. My wife, bless her, milks the cows, the children carry the jugs and churn the butter, while I myself, as you see, drive to the market early every morning and call at every Boiberik dacha. I get to meet this person, that person, all the important people from Yehupetz, I chat a while with them and this makes me feel that I am also worth something in the world, that I am, as they say, no "lame tailor".

Tevye the Dairyman and the Other Stories, by Sholom Aleichem.

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Nov

7

10 days since all-time high. very bullish.

Steve Ellison comments on CAPE:

[Click chart for original post on X.]

6637-6660 is an important level for the ES December contract; not breaching this level (yet) in today's selloff is short-term bullish in my opinion, but the second highest valuation in history means the longer-term risk is high.

And I'm not sure exactly what the "rolling historical average" is, but by my calculation, the 30-year average CAPE is 28, which might make 40 somewhat less overvalued.

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Oct

29

An attempt

October 29, 2025 | Leave a Comment

An attempt by chair to halt margin of victory in 2026 for opposition.

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Oct

24

a new all time high at 6825 but the gentlemen don't believe it as it drops 20 points in the last 30 min.

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Oct

22

The Tipster

October 22, 2025 | Leave a Comment

The Tipster:

As he walked, a great sense of loneliness came over him.

He was back in Wall Street. At the head of the Street was old Trinity; to the right the subTreasury; to the left the Stock Exchange.

From Maiden Lane to the Lane of the Ticker — such had been his life.

"If I could only buy some Cosmopolitan Traction!" he said. Then he walked forlornly northward, to the great Bridge, on his way to Brooklyn to eat with Griggs, the ruined grocery-man.

from Wall Street Stories by Lefevre circa 1895 and similar to many who i've known and similar to many get-rich ads of today.

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Oct

21

Oil and PPI

October 21, 2025 | Leave a Comment

correlation between the price move of oil in the last month and the ppi rep. it's hard to believe that any except chauncey chair would be worrying about inflation with oil at $56 per barrel.

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Oct

18

many accomlished and very successful specs and investors have told me that the most helpful book for the young spec to read is The Godfather (and the movies, part 1 and part 2). what advice would you say is the most helpful in these works?

one lesson that is very improtant is never interfere with a relative's marriage and never say anything bad about a relative's spouse.

family and loyalty are keys to success.

never let the others know what you are thinking. and above all never disagree with the boss in front of rivals.

Big Al adds:

The Offer is a really enjoyable derivative work.

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Oct

8

a key figure of the 1900s, according to Sobel:

Charles Ranlett Flint

Charles Ranlett Flint (January 24, 1850 – February 26, 1934) was the founder of the Computing-Tabulating-Recording Company which later became IBM. For his financial dealings, he earned the moniker "Father of Trusts". He was an avid sportsman and member of the syndicate that built the yacht Vigilant, that was the U.S. defender of the eighth America's Cup and was the owner of the yacht Gracie.

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Oct

5

The Pursuit of Wealth by Robert Sobel is a quirky but informative history of wealth creation, introducing such things as the use of ice, and beer, and cattle as drivers of wealth. there is a very good discussion of the start of Merrill Lynch, also the history of IBM.

An epic saga that recounts the turbulent history of money. The Pursuit of Wealth is a fascinating 5,000 year journey through the evolution of money and investing. From risk versus return in Mesopotamia through today's rough-and-tumble, high-stakes stock markets, this behind-the-scenes tale will intrigue both financial historians and history-minded investors alike.

The Ancient World — The Imperial Age of Alexander and Rome — The European Middle Ages: The Birth of a New Economic Age — The Italian Bankers and their Clients — The Atlantic Age — Europe's American Empires — The English Advantage — The American Paths to Wealth — Industrial Wealth — The Mechanization of Agriculture — Infrastructure and Wealth — Emperor Wheat and King Cotton — Gold, Silver, and the Civil War — The Impact of the Transcontinentals — The Arrival of Big Business — The Government-Industrial Complex, 1914-1929 — The Great Bull Market of the 1920s — The Old and the New in Post-World War II America — The Revival of the Securities Markets — Creating Wealth During the Great Inflation — The Democratization of Wealth.

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Oct

2

Academic panic

October 2, 2025 | Leave a Comment

a tragedy from not followinig drift

UChicago Lost Money on Crypto, Then Froze Research When Federal Funding Was Cut

While Stanford responded to the federal funding research freeze by halting administrative hiring and protecting research, the University of Chicago panicked.

Vic's X/twitter feed

Sep

29

since 01-01-2001 there have been 6341 days where the sp was open — on 1303 of those days, sp closed at 20-day high.

535 of those days witnessed a decline in sp from a 20-day high 5 days ago, a highly bullish event.

Vic's X/twitter feed

Sep

27

what is the evidence that an increase in output, e.g., gdp, is bear for sp? (aside from ignoramos at fed)

[as of Friday, 26 Sept] it's been 5 days since last all-time high on sep 21 at 2712.

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Sep

25

A Year in the Maine Woods insights: "whenever i have an idea, i must act on it as soon as possible. conditions are never ideal, and if one waits long enough for ideal conditions, then the hypothesis slips away."

"Of all the animals that migrate, we are surely among the most restless. But humans retain the influence of the geophysical habitat in which they pass their formative years. And often, it seems we are drawn back to our childhood homes, if not physically then mentally; it not out of love, then out of curiosity; if not by necessity, then by desire."

you often get more insights from nature about markets than from markets themselves.

[Below from the Author's Note - Ed.]

By the time I was ten years old, I had lived for six years as a refugee in a northern German forest. My family survived on very little. But I had a lot — I had a pet crow, and I could collect beetles. Sometimes lately I have begun to wonder if it is still possible to taste the world up close as I did as a child. I long to see nature again as I did then — fresh, clear, timeless, and shrouded in magic. Would it be possible to rediscover the vividness that I now experience only as brief, tantalizing flashbacks?

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Sep

17

Questions on FOMC day

September 17, 2025 | Leave a Comment

what can chair Powell do today that will help his job prospects and also aid the long term interests of the agrarian reformers?

what are price ranges that are bulish and bearish for individual companies?

"if you keep me or stop the relentless pressure on me to be fired, i have two more reductions in my term for you."

JT responds:

Sounds similar to a Wimpy negotiation: “I’ll gladly pay you Tuesday for a hamburger today.”

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Sep

17

Equilibrium

September 17, 2025 | Leave a Comment

the antelope and its predators after an arms race lasting thousands of years reach an equilibrium with antelope going about 60 miles an hour. how is this related to the sp versus the bonds or the top performing stocks in a year versus the average?

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Sep

13

yet another all-time hi in s&p. since 2011 there have been 857 20-day highs and 2925 not highs. this one preceded as is typical by a big move up in fixed income prices — Dimson and Lorie remain supreme.

advice to a young son from an 80+ old father who have been thru Heaven and Hades.

1. be humble.
2. follow drift upward in stocks.
3. learn and practice 5 martial arts.
4. Keep moving, e.g., running.
5. Marry a girl who you are harmonious with.
6. don't get in over your head.
7. your family is your major and perhaps only loyal support you can count on.
8. wear a hat.
9. always be learning. listen and learn.
10. stay away from hoodoos.
11. eat fish in high proportion to meat.
12. get a CEA test before colonoscopy.
13. read good books often. my faves are: Don Quixote, The Time It Never Rained, nature books from Bernd Heinrich, like Why We Run.
14. count whenever you can. read the autobio of Francis Galton or Pearson's bio of him.
15. Be courageous.
16. Find a good mentor. Ming is a good one.

9a: follow the head in your brain not the one in your balls.
9b: always learn.
9b: stay away from hoodoos: try to inculcate friends and mentors who are productive and positive.
9c: eat a higher proportion of fish to meat: Ming and your mothers are good mentors.

17. Try not to initiate or be sued. Lawyers the most untrustworthy professional. accountants are most trustworthy. Thus one of your mentors should be an accountant.
18. Spend as much time loving and building a young one up (say under 6).
19. Be receptive to and build life-time relations with an Asian Girl.

20. listen to and try to play great music.
21. enjoy and seek out great art. my favs and Hudson River art and N.C Wyeth.

17c: find a good doctor and accountant.
17d: try to settle all your disputes: lawyers and courts are too expansive and uncertain.
17e: keep moving especially running.

Vic's X/twitter feed

Sep

10

Finally another ATH

September 10, 2025 | Leave a Comment

finally another all time high at 6530. this one grew lateral branches in the 6400 handle.

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Sep

9

Advice

September 9, 2025 | Leave a Comment

Advice of Polonious to Laertes:

And, as well as that, remember these few principles – take note. Don’t let your thoughts be known, or any inappropriate act be done. Be friendly with people but respectable, not common and vulgar. Tie your closest and truest friends to your soul with steel chains, but don’t just let any stranger be one of your close friends. Be wary about entering into a fight, but if you do end up in one, "bear’t that the opposed may beware of thee".

Compared to Don Quixote's advice to Sancho Panza:

Advice focusing on both character and behavior, urging him to take pride in his humble lineage, pursue virtue, and show compassion as a ruler. He also provides practical, albeit peculiar, etiquette tips, like walking slowly, eating moderately, speaking deliberately, and refraining from eating garlic or onions and excessive drinking or belching. The goal is for Sancho to act as a wise and virtuous governor, not ashamed of his origins, but instead using his intelligence and mercy to rule his island justly.

Advice on Character and Rule

Embrace your Humble Origins: Do not be ashamed of your peasant lineage; instead, take pride in your humility and the virtue you acquire.

Cultivate Virtue: Strive for virtuous actions, as they are more valuable than inherited bloodlines or material wealth.

Show Compassion and Leniency: Treat criminals with mercy and compassion, remembering that God values mercy.

Be Wise and Grateful: Fear God, for wisdom comes from Him, and be grateful for the good fortune of your governorship.

Be a Good Family Man: Welcome and honor any relatives who visit your island.

Advice on Conduct and Etiquette

Walk and Speak Deliberately: Stroll at a measured pace and speak thoughtfully, avoiding all affectation.

Eat and Drink Sparingly: Consume small amounts for lunch and even less for supper, and drink temperately, as too much wine can betray secrets and promises.

Practice Good Manners: Refrain from eating with food in both cheeks and from belching in company.

Be Clean: Ensure you are clean and have your fingernails clipped.

Avoid Garlic and Onions: Do not eat garlic or onions so that your low birth cannot be detected by your smell.

Don't Over-Proverbialize: Do not use too many proverbs, as they can be tiresome to others.

In essence, Don Quixote wants Sancho to use these teachings to become a just, humble, and virtuous leader who is grounded in his origins but elevated by his character and good conduct.

Vic's twitter feed

Sep

3

last 20 emini prices varying between high 6300 and low 6500 with last 14 of 20 closes in 6400 handle. another 20-day hi due soon.

Vic's X/twitter feed

Sep

1

From the Sports Illustrated vault:

The Squabbler of the Squash Courts
Vic Niederhoffer brought a touch of Brooklyn rowdiness to Harvard and a traditionally genteel game

The progress of Victor B. Niederhoffer, Harvard '64, among American squash players has surprised a lot of people, but not Vic Niederhoffer. Beaten only once in the past two years as No. 1 on Harvard's undefeated squash team and the winner of three major squash championships this year, Niederhoffer thinks he is unbeatable and clamors loudly for justice when his shots go awry. Consequently, on those rare occasions when he loses a tournament, squash lovers are delighted. Niederhoffer could not care less. "He's the Ty Cobb of squash," says his coach at Harvard, Jack Barnaby. "He'd chew glass to win. Nothing matters but victory."

Racket guy from Brooklyn
But Vic Niederhoffer doesn't use dem or dose. The five-time U.S. champ has a Ph. D., a million-dollar business and wears a tux—with track shoes

To the victor — Victor Niederhoffer, that is — belongs another silver pitcher. Last week in New York, at 31, he won the U.S. National Singles Squash Racquets championship for the fifth time. His opponents did little but gasp, sweat and run. But Niederhoffer seemed to play effortlessly. His shots were not always brilliant, but he patiently waited out long rallies, and his frustrated opponents consistently found themselves in situations where most of their moves were of high risk. And then they were forced to make mistakes which ruined them.

Aug

28

below from my favorite and most highly recommended Western book, The Time It Never Rained, by Elmer Kelton:

He had often thought that if man were to disappear, the domesticated livestock would not long survive. Fences would sag and rust away. The artificial watering places would go to dust, forcing livestock to the natural creeks and rivers.

There, in time, the sheep and goats would fall to the bobcats and coyotes. Perhaps even the lean gray wolf- so long gone from here- would return to hunt and howl at the moon. The land would go back to those creatures which impartial Nature had found fittest by ruthless selection.

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Aug

22

Boy Rasmussen

August 22, 2025 | Leave a Comment

Top economist says two contenders to replace Fed Chair Powell stand out

Mohamed A. El-Erian says both candidates have strong market experience and would do 'great job' leading central bank

El-Erian appeared on FOX Business Network's "The Claman Countdown" on Wednesday and said that BlackRock CIO of global fixed income Rick Rieder and former Fed Governor Kevin Warsh are his preferred picks to replace Powell, whose term as chair expires in May 2026.

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Aug

22

How to Be a Good Intelligence Analyst
“The first to get thrown under the bus is the intelligence community”

Which blog recommends this book:

Analytic Culture in the U.S. Intelligence Community: An Ethnographic Study, by Dr. Rob Johnston.

[Dr. Johnston] reaches those conclusions through the careful procedures of an anthropologist — conducting literally hundreds of interviews and observing and participating in dozens of work groups in intelligence analysis — and so they cannot easily be dismissed as mere opinion, still less as the bitter mutterings of those who have lost out in the bureaucratic wars. His findings constitute not just a strong indictment of the way American intelligence performs analysis, but also, and happily, a guide for how to do better. Johnston finds no baseline standard analytic method. Instead, the most common practice is to conduct limited brainstorming on the basis of previous analysis, thus producing a bias toward confirming earlier views. The validating of data is questionable — for instance, the Directorate of Operation’s (DO) “cleaning” of spy reports doesn’t permit testing of their validity — reinforcing the tendency to look for data that confirms, not refutes, prevailing hypotheses. The process is risk averse, with considerable managerial conservatism. There is much more emphasis on avoiding error than on imagining surprises.

Stefan Jovanovich comments:

Actual military intelligence is never even allowed to be on the bus. The CIA's human analysts had an infallible record of guessing wrong about war that was matched only by Congress and the Pentagon. The odds are that Putin and Trump spent the time discussing what the Russian Army's actual capabilities are and what the Russians know about NATO's present inventory. The absence of any U.S. generals and intelligence professionals from "the meeting" is a pure tell.

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Aug

11

Disappointing AI

August 11, 2025 | Leave a Comment

AI found rules of Wiswell:

1. Patience precedes power.

2. The middle game is where we live.

3. Sometimes the best move is to wait.

4. Mistakes are not shameful - they're illuminating.

5. You play against yourself, not just your opponent.

6. Simplicity is the highest form elegance.

7. You never stop learning.

Everything considered the AI search came up with a disappointing melange of generic rules that do Tom a great injustice.

J.T. adds:

I plugged it in to check and got a couple of Wiswell proverbs as well. Here are three:

• The winner of a match is not always determined by who is right, but in the end, who is left.

• We can play today’s draws and anticipate tomorrow’s wins, but we shouldn’t forget yesterday’s losses.

• The losing player who says: 'I’ll look it up tomorrow,' very seldom does look it up.

Vic continues:

i have the complete set. Tom would create 20 proverbs a week and then give the boys at ncz a lesson in checkers for 12 years from 1988 to 2000. he would say with a whistwell air, "I wish I had married a girl life Susan. but then I wouldn't have written 22 books."

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Aug

9

The Speculator's Edge: A Life in Markets, Mistakes, and Mastery
By Bo Keely with ChatGPT

Chapter One: The Hungarian Gambler and the Boy from Brighton Beach

I was born into odds. Not just long shots or probabilities scribbled in a ledger—but the kind of odds that start at birth and ripple outward through ancestry and ambition. My father, Artie Niederhoffer, was the first speculator I knew. Not on Wall Street—but in the back rooms of Brooklyn where chess games turned into hustles and a nickel bet was sacred currency. His friends called him "The General," and while he never served in uniform, he commanded a battalion of books, bets, and bluffs. He was Hungarian, proud, loud, and certain about everything.

We lived in Brighton Beach, downwind of Coney Island's chaotic joy, but miles away from any kind of financial privilege. Yet my childhood was filled with markets of a different sort. Card games in the basement. Side bets at the chess park. My father's upholstery shop doubling as a clubhouse for thinkers, schemers, and strivers.

It was there, sweeping sawdust off the floor or sitting quietly in the corner listening to men argue over Lasker’s endgame or the Yankees’ spread, that I learned my first truth: everyone speculates. Some do it with stocks. Others with reputations. But every soul is placing a wager, every day.

Download the full bio (.docx file).

Aug

8

a new way of looking at markets and real life:

In 1953, a top-secret manual teaching agents sleight-of-hand and other deception techniques was written for the CIA by America’s then most famous magician. All copies were believed destroyed by the CIA’s purge of the infamous MKULTRA documents in 1973, and there was no proof of the manual’s existence . . . until a copy was discovered among the CIA’s recently declassified archives.

Big Al responds:

Speaking of the CIA, one is reminded of this manual:

Psychology of Intelligence Analysis, by Richards J. Heuer, Jr.

And something from it (p. 108):

Analysis of competing hypotheses involves seeking evidence to refute hypotheses. The most probable hypothesis is usually the one with the least evidence against it, not the one with the most evidence for it. Conventional analysis generally entails looking for evidence to confirm a favored hypothesis.

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Aug

6

biological invasions - take the invasion of bitcoin to sp.

Biological Invasions: Theory and Practice, by Nanako Shigesada and Kohkichi Kawasaki.

Using the large amount of data from studies in pest control and epidemiology, it is possible to construct mathematical models that can predict which species will become invaders, which habitats are susceptible to invasion, and the biological impact. This book presents a clear and accessible introduction to the modeling of biological invasions. It demonstrates the latest theories and models, and includes data and examples from various case studies showing how these models can be applied to problems from deadly human diseases to the spread of weeds.

Vic's X/twitter feed

Aug

1

I interpret the "Vig" as the collective term for:

1) bid-ask spread (difference in prices between buying & selling) due to market makers
2) transaction fees (for limit & market orders) charged by the exchange
3) slippage (an instrument is more expensive the deeper in the order book you go) due to how liquid an asset is.

Possible solutions for each?
1) Can be fought with the exclusive use of limit orders instead of market orders.
"Be patient and you will have the edge", The Chair in, Practical Speculation — The fine art of bargaining for an edge
2) I noticed (at least in crypto markets) that the more volume you trade, the less fees you pay (on a percentage basis)
3) Restrict yourself to deep and very liquid markets.

Also, one technique is to trade as less often as you can (buy & hold). That way you will automatically pay less of all the three sources of Vig. I think this is so important as I often found many "edges", then accounted for the vig and they often became loosing strategies.

Big Al writes:

I would also add "opportunity cost" as part of the "Meta Vig" (MV), i.e., the total costs associated with trying to trade the markets. The MV would also include the negative effects of cortisol on the human body.

Henry Gifford suggests:

I think two good steps are to ask others what the big is, and to try to calculate it yourself. Both exercises will no doubt be educational. A few times over the years I have asked horse bettors what the big is, but none seemed to know. As for calculating yourself, one hopefully will learn how much it varies by, and maybe also gain insight into hidden vig.

Steve Ellison responds:

There is no free lunch with limit orders because of adverse selection. Sooner or later, you will place a limit order on a security that simply moves up and never looks back. It would have been your best trade ever, had you actually been filled. In the opposite scenario, for example when I bought Coca-Cola in 1998, and it was already down 25 percent by the T + 3 settlement date, you will of course be filled.

Studies of retail investing accounts have shown a negative correlation between number of transactions and investment returns. In one study, accounts that had been inactive for 18 months because their owners had died, and their estates had not been settled, outperformed the vast majority of their retail account peers.

Peter Ringel writes:

Generally, the lower you go ( smaller time frame - smaller scope of the trade ) the larger the relative Vig costs. a subclass of opportunity costs is spent time of (daily) preparation. my required prep is nearly the same over many time-frames - but the scope of a trade is way lower for lower time-frames. in cash equities, the resale of your order-flow by your broker to some HF shop can be counted as Vig too. is this a common practice in option markets too? Yes, the Vig greases the fin-industry, but it is mostly unavoidable paying / avoiding the Vig does not lead to success or failure in mkts IMHO.

Vic simplifies:

just trade once a quarterfrom long side

Zubin Al Genubi comments:

The biggest vig is capital gain taxes. The richest people in the world hold their single company stock 10000x and realize no gain. Its very hard to beat a long term hold.

Jul

27

Tommy had the best way of starting a meeting or conversation: "tell me a story - or teach me something." try it sometime on a first date or meeting.

Where Westport meets the world: Tommy Ghianuly

Friday Flashback #131
Posted on March 1, 2019
When Tommy Ghianuly died last month, Westport lost more than a great barber and good friend.

We lost a man who loved local history — and made his Compo Shopping Center business a shrine to it.

The walls of Tommy’s barber shop are filled with vintage photos. Most customers see them in the mirror as they get their hair cut. Sometimes, someone glances a bit more closely at one or two.

Each of them has a story. Tommy knew them all.

Video: Compo Barber Shop and Thomas Ghianuly

In 2001, Dr. Phil Woodruff approached me to help work on video project for the Westport Historical Society. One of the project ideas he wanted to explore involved the Compo Barber shop and its owner Tom Ghianuly. Tom had over the years decorated the barber shop with historically significant photos of Westport. Dr. Woodruff wanted me to help him create a video about the barber shop, Tom Ghianuly, and all of the photos on his walls.

Vic's X/twitter feed

Jul

24

a nice example of economy in the 1800's. a colleague tells him to get out of the rain but finds him a hour later drenched. what's the explanation? he was waiting the one penny bus not the two penny.

George Peabody never quite escaped the marks of his boyhood poverty. He routinely worked 10-hour days, every day of the week, and during one 12-year stretch he never took off three consecutive days. More visibly, he was frugal to the point of absurdity. His partner, Junius Morgan (father of J. Pierpont Morgan, who began his distinguished career in finance at the New York office of George Peabody), once found him standing in a drenching London rain. Morgan realized that Peabody had left the office 20 minutes earlier. Ron Chernow recounts their exchange: “’Mr. Peabody, I thought you were going home,’ the younger man said. ‘Well, I am, Morgan,’ Peabody replied, ‘but there’s only been a twopenny bus come along as yet and I am waiting for a penny one.’” At the time, Peabody had more than £1 million to his name.

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Jul

12

The Case for Free Trade
By Milton Friedman, Rose D. Friedman
Thursday, October 30, 1997

For example, the supporters of tariffs treat it as self evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number–for example, have people dig holes and then fill them up again or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs–jobs that will mean more goods and services to consume.

How Trade Agreements Have Enhanced the Freedom and Prosperity of Americans
By Daniel Griswold and Clark Packard

The most straightforward and preferable path to trade liberalization for any country is the unilateral reduction of trade barriers without regard for other countries’ trade policies. Unilateral liberalization allows a country to realize the gains from openness—mainly lower prices for consumers, lower-cost inputs for businesses, and a more favorable exchange rate for exporters—without the need for complicated negotiations with other countries. Many nations have followed this route with success, from Great Britain in the mid–19th century to China and India and other emerging economies since the 1980s.

Recommended Readings on Free Trade Versus Protectionism
By Williamson M. Evers

Economists, going back to Adam Smith and David Ricardo, are virtually unanimous that free trade benefits consumers and the overall economy. But there exist special interests who would gain in the short run from protectionist barriers. And there is a large segment of the public that doesn’t understand the arguments for free trade. Not surprisingly, there are politicians who are all too willing to gain votes by catering to protectionist interests.

'Ulysses Grant' comments:

"Free trade" was the English rebuttal to the ungrateful Americans who decided in 1789 that they would pay for the national government with tariffs. The intellectual debate only began in the United States a generation later; but, even then, it was only about how much harm Congress would do to libertarian beliefs in order to pay the bills. "True" freedom would only come much later, with the income tax - which has none of the defects that make tariffs so inherently immoral.

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Jul

11

To what extent are all the spectacular reported profits of short term traders due to specialized lower commissions and preferred access to the bid-ask spread, especially but not limited to the openings?

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Jul

9

Terms of Trade and the Gains from Trade | AP Macroeconomics | Khan Academy

The Benefits of Free Trade: Addressing Key Myths
By Donald J. Boudreau and Nita Ghei

The growing rhetoric about imposing tariffs and limiting freedom to trade internationally reflects a resurgence of old arguments that stay alive in large part because the benefits of free international trade are often diffuse and hard to see, while the benefits of shielding specific groups from foreign competition are often immediate and visible. This illusion fuels the common perception that free trade is detrimental to the American economy. It also tips the scales in favor of special interests seeking protection from foreign competition. As a result, the federal government currently imposes thousands of tariffs, quotas, and other barriers to trade.

Vic's X/twitter feed

Jul

7

Lytton Strachey, in Biographical Essays, writes about David Hume:

Not long before he died he amused himself by writing his autobiography — a model of pointed brevity. In one of his last conversations — it was with Adam Smith — he composed an imaginary conversation between himself and Charon, after the manner of Lucian: "Have a little patience, good Charon, I have been endeavouring to open the eyes of the Public. If I live a few years longer, I may have the satisfaction of seeing the downfall of some of the prevailing systems of superstition." But Charon would then lose all temper and decency. "You loitering rogue, that will not happen these many hundred years. Do you fancy I will grant you a lease for so long a term? Get into the boat this instant, you lazy, loitering rogue."

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Jun

30

sp and bonds 1-day changes similar to Mendel's independent moves to next generation. when an event occurs that throws one of pair of bond or sp off, treat it as a mutation.

Punnett square

The Punnett square is a square diagram that is used to predict the genotypes of a particular cross or breeding experiment. It is named after Reginald C. Punnett, who devised the approach in 1905. The diagram is used by biologists to determine the probability of an offspring having a particular genotype. The Punnett square is a tabular summary of possible combinations of maternal alleles with paternal alleles. These tables can be used to examine the genotypical outcome probabilities of the offspring of a single trait (allele), or when crossing multiple traits from the parents.

Asindu Drileba writes:

Orange (S&P Up, Bonds Down) and Green (S&P Up, Bonds Up)

Orange appeared 4 times. In 3/4 times, Orange transitioned to Green with an average point gain of 35.4 in the SPY.How long will this continue? I noticed the pattern last month, unfortunately I didn't "count" it. Was it around for longer periods of time?

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Jun

24

the forces of fate. finally a new all-time high. previous all-time high: 23 January, 2025, S&P 6123.

The Hallé - Verdi: The Force of Destiny Overture

La forza del destino

Over the years La forza has acquired a reputation for being cursed, following some unfortunate incidents. In 1960 at the Metropolitan Opera, the noted baritone Leonard Warren collapsed and died during a performance of the opera. The supposed curse reportedly kept Luciano Pavarotti from ever performing the opera, and the tenor Franco Corelli used to follow small rituals during performances to avoid bad luck.

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Jun

21

Anyone who appreciates the scientific study of finance will recognize the name of MFM Osborne as a pioneer, visionary, and creator of our field. He was the first to discover Brownian Motion in Stock Prices, the first to study technical analysis scientifically, the first to note the lognormal nature of prices, the first econophysicist, the creator of automated market making algorithms 50 years before they became common place, the creator of market microstructure, and the discoverer of clustering of prices among other things.

They might also know that he was an eminent physicist whose work on sound and electricity led to his discoveries in finance. Yet despite his renown, he is somewhat of an unsung hero having done his work mainly in the 1960s when our field was in its infancy and many of his contributions have languished in such journals as Econometrics, Operations Research and Journal of the American Statistical Association from that period.

I had the pleasure of knowing him fairly well during the 1960s when he did much of his work in finance. And indeed we collaborated on some papers, we had an extensive correspondence, and he served as one of the original directors of my firm Niederhoffer, Cross and Zeckhauser, Inc., the original name of the current firm of Manchester, Inc. I also had the pleasure of meeting and befriending one of his astronomical colleagues, Harold Weaver at the Univ of Cal, Berkeley, who audited my classes there, and we exchanged many a story about the astounding trajectory of Osborne's scientific career.

During the time I knew Osborne, I was aware that he was the most creative and competent eye in the world of finance, far surpassing in that respect all my teachers at the University of Chicago, of that period, many of whom are widely known, revered, and honored. And I always wondered, where did it all come from, how did a man of such genius arise, and how did his scientific work in physics, astronomy, entomology and oceanography lead to his contributions to finance.

Out of the clear blue sky, I recently found the book "Autobiographical Recollections of M.F Maury Osborne", transcribed by Melita Osborne Carter from a series of cassette recordings in 1987. Attached to the autobiography was a hand written note from MFM Osborne: "You have often asked about the path I took in life. Well here it is. And as you can see my upbringing and path was diametrically different from yours."

It is a pleasure, honor and duty to review this book, as I believe we can all learn from it. And a man of such great accomplishment should receive his due. The book reminds me of what Tom Sawyer would have been like if Tom had trained to be a scientist rather than a detective, and if he had been raised by genteel Southern Scientists rather than a house aunt. It's divided into 34 sections: Early Childhood, Mrs. John's School, Public School, Games and Other Activities, Kites and Model Airplanes, The effects of Personal experience, My House on Westoer Wenue, Summer Camp, Scouts High School, Eoodberry Forest, Mother's Influence, Incidents in Norfolk, University of Virginia Sophomore Year, With Hrdicka in the Aleutions, University of Virginia Other Activities, Mrs. Rose's Farm, American Student Union, Jail– Right and Wrong, University of Cal at Berkley, Lick Observatory, Student of Oppenheimer, Operations of the Naval Research Laboratory, Life in Forest Heights, Non-nrl Research Eddington Studies.

Maury was born on December 1916 and passed away in early 2003 at the age of 86. He has two daughters and two sons. During his life he published 47 scientific papers, received his PhD from the University of Maryland in biology in 1952, served as the Mayor of Forest Heights, and was a gadfly for all the physicists working in the fields of relativity, and all the early believers in the random walk theory.

Like most greats, his life was shaped by a combination of inheritance from eminent predecessors and a fortunate environment that enabled his inherited talents to prosper. He was the proud great grandson of Matthew Fontaine Maury, a famed astronomer, oceanographer and meteorologist who was known as the Pathfinder of the Seas and the Scientist of the Seas "because of his seminal work" The Physical Geography of the Seas, 1855. After great efforts to eradicate slavery in the South, as a proud resident of Virginia, Maury resigned his commission as Superintendent of the US Naval Observatory and joined the confederacy. 

He then devoted a good deal of the remainder of his life to the commercial possibilities of discovering and extracting minerals in the South as a way of rebuilding the fortunes of Southerners. MFM Osborne was very proud of his heritage from Matthew Fontaine Maury and followed in many ways in the highways and byways of his grandfather's career.

It was always hilarious to read in the autobiography that despite MFM Osborne's positions in highly classified government research, he always refused to sign any loyalty oaths because he would have had to deny that he was descended from a grandfather who had sworn to overthrow the US government with the outbreak of the civil war.

Here comes the scientist, MFM Osborne. What was his life like? What were the major influences on him? The significant events? How did he reproduce and eat? To get a flavor for his ecology, let's consider several of the typical events described in his autobiography. Osborne never accepted anything without proof. When he found an error in some respected authorities work he liked to say something like, "Someone's going to eat crow, raw squawking and fully feathered, by the time I correct his errors." He applied the same approach to life situations. He noted many people being sent to jail. But why were they sent? The answer would teach him what a society regarded as right and wrong. "No one is surprised if people want for no other reason than to explore mountain tops or caves or jungles. Well, the same is true in society. There are segments of society that one layer does not know anything about or very little about, and you can explore it with the idea of learning about it or improving it." So Osborne decided to spend a few months of his summer vacation from the University of Virginia in jail. He went about it by hoboing across the country until he was picked up by a plain clothes sheriff in Vanceburg, Kentucky. The Jail was a pre-Civil War masonry cell with two rooms with a cage on the outside with masonry walls three feet thick with 30 people inside. What did he conclude from his months in jail? "These people were not bad so much as they were just amoral in just the same way as primitive societies… Looking back I can say it enlightened me as to what constitutes right and wrong. Very much depends on arbitrary standards which change with time." He applied these insights into his study of the Constitution, the Bible, and his scientific pursuits. "It contributed to my understandings of the limitations of truth and falsity — of right and wrong. My experiences in Vanceburg, Kentucky were consonant ultimately with what I learned in many other parts of my life, and in many other circumstances." He applied this learning to question and correct the conclusions of science in many fields, particularly astronomy where he concluded that the errors of measurement were so great that separate investigators were liable to come to completely different conclusions concerning such fundamental questions as the truth of Einstein's hypotheses about the movements of the planets and satellites during eclipses, to the world of finance where he concluded that the students of the random walk were completely on the wrong track because they didn't take account of the influence of the bid asked spread, and the relation between volume and price.

It should be mentioned here that Osborne was a can do person. He was a boy scout and a fix it person. He built model airplanes, boats and kites while in his teens. "If you flew one of these airplanes at night and hung on it a thin wire in which there was a rubber band attached hanging down below the airplane, and the put a match to the rubber band, the rubber band would burn and melt and drop little flaming balls"— The unsympathetic police soon put a stop to that. "I told my children that I had taken a trash can and made a huge catapult out of old inner tubes and shot one of the smallest boys in the neighborhood in the trash can as a space capsule". He liked to hobo and hitchhike across America. He took a year off from school to work on a farm to improve his physical conditioning. He enjoyed pushing a wheelbarrow around, and hauling dirt and using a shovel. Eventually he used these skills to become the main hand on an archeological expedition with Professor Hrdlicka to explore the antiquity of man.

Time and again he used the knowledge he gained of how to get and improve his bearings to get out of life threatening experiences. On one of them however, hauling a car up to the observatory in Mr. Lick while he was studying at Berkeley, he managed to fall off a cliff and spent 1 month prostrate on his back in a hospital which time, he characteristically used to improve his knowledge of tensor calculus.

One of his typical chores there was to rake manure. He used his experiences there to come up with his solution to the problem of why the bee can fly or some insects can travel at 500 miles per hour, or how salmon can swim upstream 500 miles without eating. His conclusion: "Salmon are more efficient than the most efficient rigid body boat that humans can devise because they seek out and gain energy from the varying velocities of water that they navigate." When he performed archeological work, he had no compunction of diving 50 feet under water without deep sea equipment to recover a rake.

Another example of the Osborne way came when he was made mayor of Forest Heights. It was the first city outside of the city limits of Virginia. Anyone who moved tended to allow their dogs to run free. The dogs ran in packs and terrorized all the people of Forest Heights. Osborne concluded the solution was to have a dog day where every stray dog not on a leash that day would be shot. He became world infamous for that solution and received many a threat that he would be killed if he implemented it.

The path and conclusions of many of his scientific discoveries in astronomy, biology, entomology, finance, physics, optics, sound and especially Eddington's theory of relativity are detailed in the autobiography. His schooling at the University of Virginia, Berkeley, and Harvard provides a great window on the process of scientific education and discovery during the first half of the 20th century. His work at the Naval Research Laboratory provides insights into how large research institutions work, and the ins and outs of the bureaucratic process. His experiences with Oppenheimer, Feynman, and other great geniuses of physics and astronomy as well as the hum drum day to day of the kind of instruction provide a great foundation for the way science was carried out in practice rather than theory.

In view of the importance of Osborne's contributions to the world of finance and science, and the intrinsic interest of his autobiographical notes, his daughter Melita Osborne has prepared a biographical document that is available here [MS word .docx file, approx 300 Kb].

Jun

17

max without all time high currently >250 days very bullish. what else in timing is bullish?

"Time schedule are most strict for flowering and fruiting," says Heinrich. "I can make observations and then speculate about these schedules on the assumption that they came into being, and persisted because they uniquely served the tree of each species to reproduce itself better in the particular environment that it grows in." - The Trees in My Forest

Seasonal timing on a cyclical Earth: Towards a theoretical framework for the evolution of phenology

Phenology refers to the seasonal timing patterns commonly exhibited by life on Earth, from blooming flowers to breeding birds to human agriculture. Climate change is altering abiotic seasonality (e.g., longer summers) and in turn, phenological patterns contained within. However, how phenology should evolve is still an unsolved problem. This problem lies at the crux of predicting future phenological changes that will likely have substantial ecosystem consequences, and more fundamentally, of understanding an undeniably global phenomenon. Most studies have associated proximate environmental variables with phenological responses in case-specific ways, making it difficult to contextualize observations within a general evolutionary framework. We outline the complex but universal ways in which seasonal timing maps onto evolutionary fitness. We borrow lessons from life history theory and evolutionary demography that have benefited from a first principles-based theoretical scaffold. Lastly, we identify key questions for theorists and empiricists to help advance our general understanding of phenology.

Vic's X/twitter feed

Jun

15

gregariousness. in bison, locusts, passenger pigeons. what insights does this have for markets?

listening to now:

The Glory of Their Times: The Story of the Early Days of Baseball Told by the Men Who Played It

one of the most memorable and saddest experiences of my life was visiting with Larry Ritter as he was dying at Roosevelt hospital. i had befriended Larry 10 years ago and found him equally knowledgeable about finance and old time and Negro Baseball. He traveled in a Yankees bus.

while visiting him on his last days a big curmudgeon walked in. we discussed Glory and I mentioned that the spoken words of it was just as good as the book. the curmudgeon said he never listened to radio, tv, computers or anything else. he didn't believe in any of the modern.

I was not surprised when he tried to ruin the US economy shortly thereafter. Paul Volcker was proud to be wrecker. The curmudgeon was a colleague of Larry's at NYU.

Vic's X/twitter feed

Jun

12

Posted on April 20, 2011:

1. "There is no such thing as easy money"

2. Events that you think are affected by cardinal announcements like the employment numbers at 8:30 am on Friday are often known to many participants before the announcement

[An example supplied on April 18 by Mr. Rogan: "The Reason For Geithner's Weekend Media Whirlwind Tour: White House Learned About S&P Downgrade On Friday" (zerohedge )]

3. It's bad to try to make money the same way several days in a row

4. Markets that have little liquidity are almost impossible to profit from.

5. When the stock market is way down, policy makers take notice and do what they can to remedy the situation.

6. The market puts infinitely more emphasis on ephemeral announcements that it should.

7. It is good to go against the trend followers after they have become committed.

8. The one constant, is that the less you pay in commissions, and bid asked spread, the more money you'll end up with at end of day. Too often, a trader makes a fortune on the prices showing when he makes a trade, and ends up losing everything in the rake and grind above.

9. It is good to take out the canes and hobble down to wall street at the close of days when there is a panic.

10. A meme about the relation between today's events and those of x years ago is totally random but it is best not to stand in the way of it until it is realized by the majorit of susceptibles

11. All higher forms of math and statistics are useless in uncovering regularities.

Read the full post with additional comments.

Jun

10

The Trees in My Forest by Bernd Heinrich is one of the best books about nature that I have ever read. theme of the book is, 'Trees exist as parts of an unfathomably complex web where each species is linked to others in growth, reproduction, sex'.

Each chapter teaches me big things about markets. (1) evolution of small versus big. (2) construction for strength. (3) Tree geometry. (4) time for a tree. (5) sex in a tree. (6) seeds and seedlings. (7) ants and trees.

The Homing Instinct by Bernd Heinrich is a great companion piece. Much detail about Lobagola in many migratory species.

the inexorable fate of round numbers: Octet Rule

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Jun

6

books read on recent tour of California, Japan, Thailand, Singapore and Hong Kong with Aubrey and his good friend:

Singapore: A Biography, by Mark Ravinder Frost and Yu-Mei Balasingamchow

The Trees in My Forest, by Bernd Heinrich

The Birth of the Modern: World Society 1815-1830, by Paul Johnson

And for music: La Divina - the Best of Maria Callas Compilation

Also, a great book about 200 years of peace and harmony in Japan, The Fantastic Edo Era, but a completely opposite take by Paul Johnson in The Birth of the Modern.

also one terrible book, Every Man a Speculator, by Steve Fraser. the author hates speculation in all forms and writes 800 pages of selected anecdotes with thousands of footnotes to support his biased and hateful review.

Gavan Tredoux comments:

Paul Johnson is not a careful writer, makes too many factual mistakes, often accepts received wisdom uncritically. He writes well, as a journalist would, but I wouldn't trust anything he produced.

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Jun

5

back from a few weeks tour of Asia with many books read and museums visited and zoos and botanical gardens and aquariums, and much abalone from many great restaurants. will provide reviews shortly.

Vic's X/twitter feed

Jun

4

today (Wed, 4 June) a very healthy day for sp.

Jun

4

round # of 6000 approaching, sp now at 5973. the octet rule in chemistry: the concentration of stops at rounds. what else causes inordinate concentration? limit orders tend to be concentrated at round numbers. many compounds lose electrons to reach a stable, nonreactive 8. tests show that when a stock breaks thru a round number, it is bullish.

The Octet Rule: Help, Definition, and Exceptions

The Octet Rule is a general rule that is used to describe chemical bonding and draw Lewis Structures. The rule states that Main Group elements form bonds in a manner that results in each atom having eight valence electrons in the highest energy level (sometimes called outer shell). This results in each atom having the same electronic configuration as a noble gas.

Vic's X/twitter feed

May

25

This morning I finished rereading the classic Atlas Shrugged of Ayn Rand and every time I learn something new; her thought is monumental. I don’t agree with a lot of her ideas and I fully agree with others, but I’ve always found this book to be an impressive catalyst for thought; this is in my opinion her power: the ability in sparking debate.

Rich Bubb comments:

Atlas Shrugged is also available as a 3-part movie. I think the book was better.

Adam Grimes writes:

My opinion on her work has shifted over the years, in a strongly negative direction. Too much of my experience contradicts her metaphysics and epistemology, particularly the rigidity of her rational materialism, and, as someone who treasures the craft of writing, much of her prose lands as clunky and overly didactic. I'm also now unconvinced on the primacy and sufficiency of rational self-interest… but, as you said, perhaps her greatest value is in creating discussion.

Asindu Drileba adds:

Ayn Rand had a reading group called the "Ayn Rand Collective" — Which Alan Greenspan was part of. They [Greenspan, Rand and a "professor"] would meet at Rand's apartment to read every new chapter of her new book. She (Ayn Rand) then fell in love with the professor and they started dating.

After sometime, the "professor" encountered a pretty young student in his own class and he "fell in love with her". The professor told Rand about the affair, but Rand begged the professor to cancel it. The professor then said that he would dump Ayn Rand, and then exclusively date the young pretty student. He said that this was the right thing to do since he was following his "rational self-interest". Ayn Rand got angry, slapped the professor in the face twice and kicked him out of her reading group.

This was a good illustration of cognitive dissonance. Rand thought her readers should practice "rational-self interest" towards everyone else, except her.

Francesco Sabella met a girl:

I was very fascinated to meet a girl times ago who I knew for her philanthropic activities and for her ideas being the exact opposite of Rand; and I was surprised to see her carrying an Ayn Rand book and she told me she didn’t like at all her; it made me think of her ability in creating debates.

Victor Niederhoffer responds:

i would always marry a girl who admired the book. susan introduced me to it and i knew then i had to marry her. it was very good choice.

Read the full conversation.

May

12

does the law of multiple proportions apply to the way markets combine with each other and the general factor which combines with specific factors to make up intelligence?

todays market up exactly 3% and 0.5% and 1% on other days inordinately likely. 75-day hi in sp today at 5850 but not an all time high of 6100 from nov.

Thus we have a two-month max in sp but still 3.5% below nov all time hi of 6100, a relatively common way of coming bak that is short-term neutral but bull for next several months.

Vic's X/twitter feed

May

7

one is reminded of table tennis against a robot or chess game against deep 6 or later computers but the analysis at the fed that is data dependent as long as it sinks the bad guys. "only monetary policy here and no influence of politics". But there has to be a philosophy.

Vic's X/twitter feed

May

7

Francesco Sabella in Conversation With Victor Niederhoffer: Harvard Educated Hedge Fund Pioneer

Gary Boddicker writes:

Thanks Francesco. Always good to see and learn from Vic. Subscribed and look forward to your future interviews.

Steve Ellison adds:

This is a great interview. The 2 minutes starting at 13:36 about ever-changing cycles is itself a meal for a lifetime. "The world is always changing, and [the] road to success is always a little different, and the techniques that you’re using are always subject to competition. You should try to be alert to change."

I increasingly perceive that the pre-2020 world in which I lived most of my adult life is gone forever. It's a new era, and old techniques in many fields don't work any more.

Apr

29

a goldmine of techniques to use for markets. concentration ratios, capture recapture, signaling, aural detection, etc:

Ecological Methods 3e

Ecological Methods provides a unique synthesis of the methods and techniques available for the study of populations and ecosystems. Techniques used to obtain both absolute and relative population estimates are described, and approaches to the direct measurement of births, deaths, migration and the construction and interpretation of life tables are reviewed.

Vic's X/twitter feed

Apr

28

Most resonant

April 28, 2025 | Leave a Comment

i've always found the 19th century heroes the most resonant. one of the joys of the Tredoux books on Galton is how they all appear: Conan Doyle, Spearman, Cyril Burt, Pearson, Livingston, Bennett, Binet, Gilbert.

Karl Pearson

Charles Spearman

Cyril Burt

Alfred Binet

George Bennett

Vic's X/twitter feed

Apr

23

excellent book to study for all biological areas that math will uncover

Modeling the Dynamics of Life: Calculus and Probability for Life Scientists, by Frederick R. Adler

The goal of this book is to each the mathematical ideas that will help us understand various phenomena in life sciences. These are the same ideas that researchers use in their work, as well as in collaborations with colleagues engaged in more empirical activities. They are not specific techniques, such as differentiation or integration by parts, but rather they revolve around building mathematical models.

A mathematical model is that crucial link between a life sciences phenomenon and its description in terms of mathematical objects. We will gain the skills needed to construct a model, make sure it works, and understand what it implies—we will learn how to translate appropriate aspects of a life sciences problem and its assumptions into formulas, equations, and diagrams; how to solve the equations involved; and how to interpret the results in terms of the original problem.

Vic's X/twitter feed

Apr

19

Great and sententious discussion of regression by Tredoux in the second volume of his Galton bio (with tremendous applicability to markets):

However the concept of regression to the mean where it has been comprehended at all has led to persistent popular misunderstandings about its nature. Failure to spot regression to the mean recurs so often it seems to be a universal law of human behavior. Examples could be multiplied endlessly. They involve selection of a bad condition to which some intervention is applied after which the condition is observed again. Usually it has improved. Therefore the policy is supposed to work.

Francis Galton's Genius: 1865-1911, page 225

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