Jun

2

Dr. Niederhoffer,

I was always fascinated by your career. What's more interesting to me is your ability to stay in an excellent mental and physical shape. I recently read your "Letter to a Newborn Son", congratulations. I learned a lot from it, but your assumptions on Soviet system and Russian people were simply wrong. Everyone of course is entitled to their opinion, but because I learned a great deal of knowledge from your writings on how to trade and market in general, I felt obligated to correct the assumptions that you made.

Unlike you, I actually lived in Soviet Union, before, during and after collapse and in 1995 when I turned 15 we immigrated to US. Myth number one: "people had no incentives in Russia, no one worked hard, and they never produced what people wanted". The great example is simple, educational system in Soviet Union that put to shame any education that students receive in public US schools. My mom taught in school in Russia for most of her life, to the last day we stayed there. We lived through 3 hyperinflations and 2 devaluations, that wiped out all of her and my grandparents savings, and yet she diligently worked every day and taught to the best of her ability not for monetary compensation (she was getting bed linen sheets at one point as a salary), but for personal gratification of doing a good job (definition of a good job, her students learned the subject). And my father who worked as an engineer, and cared about his intellectual progress rather than how much and how he will be paid (died many years ago for disagreeing with some of the practices in that system). I was taught chess, tennis, piano and swimming all for free and all by excellent teachers while they were getting paid very little. A concept that is hard to grasp for most Americans.

Another example was both of my grandparents, who lived and worked in the Soviet time, and received University Education (even though they were both Jewish we were lucky enough to live in Tashkent where antisemitism was not as bad as in the rest of the Soviet Union) in engineering and in German language and both served during WW2.

I am surprised that you would write something like this, looking at the pattern of your performance it always seemed to me that money and performance is just a byproduct, and the important thing for you was/is an intellectual pursuit and making a right decision.

There are 2 groups of people that you met and talked with, group one: mostly ex cons, criminals, conniving, deceitful thieves that never produced anything of value in the Soviet system, those that despised "communists" and left Soviet Union in the 1970th and 80th, because they were smart enough to realized that the system is fixed and people in general are slaves in that system (unfortunately for them, they were not in charge).

Group two; those that are also conniving, deceitful thieves that never produced anything of value, but they used to be in charge of the system therefore there was no need to go anywhere (and they are still there).

I have a better explanation for the "phenomena" that you witnessed and experienced. I call it "homeless complex or slave complex". I walk around NYC and can't help, but notice that unlike in Russia homeless people are extremely obese, I decided to sit down with one and treat him for a dinner and ask him several questions. He finished everything we ordered and even though he was already full he ordered more and started eating more. I couldn't understand him and asked him why is he eating more if he was already full? He said "There might be nothing to eat tomorrow" (there are other reason why they obese, but I won't go into it here). When we came to America I worked with my mom in the pushcart that sold bagels, after everyday we gave all the leftover bagels to homeless people, the food never ended, day after day it would be the same homeless guys and yet they ate everything.

So the simple answer is "Russians" that you met are simply experiencing a "homeless complex" that if they won't steal everything today, from whomever they can (and outsiders like yourself make a perfect target) tomorrow it might run out. They learned from the experiences of the intellectuals that surrounded them and died in poverty and hopelessness. I also noticed that majority of people that buy cars that they can't afford are Russian and Chinese immigrants and African Americans. I call it "Slave complex". We are trying to make up for all those days of hunger.

 At your level you never met true "socialists" that do things that make no sense for someone like me, who understands and lives in US system (I remembered we were getting paid $70 per day for 12 hour shifts (even though sales were close to $900 per day, that's lots of bagels and coffee). It was a cash business, and the owner (who came to America in the 70th) paid so little because he assumed that we will steal from him, and of course my "socialist" mother would not dare, and she simply said, if you are not interested in working, don't work here). And still, I can not understand why is my mom who is currently making 50k a year as a High School teacher, stays every day after school and makes sure that every student will understand the subject before they go home. Nobody is paying her extra for it, nobody will fire her (she is tenured) if she is not there. There is no incentive for it. In America we call people like that, dedicated idiots.

After visiting Russia many times in the recent years, I realized that there are still lots of people like my mom in the country, but they are a dying hopeless, and in some cases homeless, breed because in the new system you are mostly surrounded by people with "homeless/slave complex".

I love the American system. At the age 18 I became a trader by chance and did well (high frequency with leverage 50-100 to 1). I quit for almost 4 years for 2 reasons. First, health; I was too young and did stupid wild things that caused my health condition to deteriorate rapidly and second, for precisely the reason you described, every day I would get up from my chair see that I made over 400k a day and "produced" very little for society (except maybe commissions or as Goldman said "we provide liquidity". I was a vulture. I made peace with it over the years by talking with other traders, became a marathon runner, and went back to trading because nothing else that was available interested me, and with the money I make I can create things for society (good thing now, my black box can be a vulture and I can finish my PhD).

Again, we are shaped by our experiences and we do and think what we like, but for some crazy reason (maybe to show you other side of the story) I felt obligated to spend 30 minutes of my life to write this email. Maybe it's genetic. You are much smarter and older than I am and have had more experience in life and maybe there is a mathematical explanation for that behavior (but it is not a simple matter of improving oneself, or lack of incentive to work hard, there was an incentive for masses it just wasn't monetary (and for those that were in power I like what Mr. Soros said, that being an agency issue) that's what Ayn Rand didn't get).

Keep up the good work,

Love reading your material,

Arthur. 


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search