Книга: Victor Niederhoffer, Laurel Kenner «Practical Speculation»

Practical Speculation

At last, some modest proof of what some of us have long suspected - beware of lords on boards. Authors Victor Niederhoffer and Laurel Kenner studied the relationship between stock returns and the number of board members with titles in the 50 largest companies by market value in the FTSE 100. Over a five year period, the more titles on the board, the worse the performance of the shares. Niederhoffer and Kenner even invented a valuation indicator, the earnings/lords ratio, dividing the earnings per share by the number of titles in the boardroom. At the time they did the study, Powergen, with just one lord, looked the most attractive stock on this basis. The finding raises the obvious question of causality. As the authors write: "Was it the lords who caused the lackluster performance or the lackluster performance that prompted the companies to use lords as window-dressing?" That comment, however, suggests a possible American misunderstanding of the British honors system. The...

Издательство: "John Wiley and Sons, Ltd" (2003)

Формат: 155x235, 400 стр.

ISBN: 0-471-44306-9

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Practical SpeculationThe follow-up to Victor Niederhoffer's critically and commercially acclaimed book The Education of a Speculator has finally arrived. Practical Speculation continues the story of a true market legend… — Wiley, Подробнее...2005753бумажная книга

Victor Niederhoffer

Victor Niederhoffer
Born Victor Niederhoffer
December 10, 1943 (1943-12-10) (age 67)
Nationality American
Alma mater Harvard University
University of Chicago
Occupation Investor, trader, writer
Children seven

Victor Niederhoffer (born December 10, 1943[1]) is a hedge fund manager, champion squash player, bestselling author and statistician.

Victor Niderhoffer was born in Brooklyn to a Jewish family. His father, Arthur, graduated from Brooklyn Law School but went to work in the police. Victor’s mother, Elaine was a teacher. Niederhoffer studied statistics and economics at Harvard University (B.A. 1964) and the University of Chicago (Ph.D. 1969). He was a finance professor at the University of California, Berkeley (1967–1972). In 1965, while still at college, he co-founded with Frank Cross a company called Niederhoffer, Cross and Zeckhauser, Inc., an investment bank which sold privately held firms to public companies. This firm is now called Niederhoffer Henkel, and is run by Lee Henkel, the former general counsel to the IRS. Victor pioneered a mass marketing approach in investment banking and did a large volume of small deals at this firm. Niederhoffer also bought many privately held firms with Dan Grossman, his partner during this period.

As a college professor in the 1960s and 1970s, he wrote numerous influential academic articles about market inefficiencies, which led to the founding in 1980 of a trading firm, NCZ Commodities, Inc. (aka Niederhoffer Investments, Inc.). The success of this firm attracted the attention of George Soros. Niederhoffer became a partner of Soros and managed all of the fixed income and foreign exchange from 1982 to 1990.[2] Soros said in The Alchemy of Finance that Niederhoffer was the only one of his managers who retired voluntarily from trading for him while still ahead. Soros held Victor in such high esteem that he sent his son to work for him to learn how to trade.[2]



As an academic at Berkeley in the 1960s, Niederhoffer wrote a number of influential papers on anomalies in stock market behavior. His paper Market Making and Reversal on the Stock Exchange (1966)[3] made Niederhoffer the father of Statistical Arbitrage and of Market Microstructure Studies. He used innovative methods to search for opportunities in stock markets, such as his paper The Analysis of World Events and Stock Prices (1971), which used the font size of news print to determine the relative importance of news events and measure how they affected the stock market. He left academia in 1972 to concentrate fully on his other business activities.[4]


Niederhoffer Investments returned 35% a year from inception through 1996, when MAR ranked it the No. 1 hedge fund manager in the world. In 1997, Victor published a New York Times bestselling book, The Education of a Speculator.

In statistical terms, I figure I have traded about 2 million contracts, with an average profit of $70 per contract (after slippage of perhaps $20). This average is approximately 700 standard deviations away from randomness.[5]

1997 losses

In 1997, Niederhoffer Investments was not finding many opportunities for investments and, having returned much of its funds to customers such as George Soros, began investing the remaining 100 million dollars in areas where Niederhoffer later admitted that he did not have much expertise.[6] Niederhoffer decided to buy Thai bank stocks, which had fallen heavily in the Asian financial crisis, his bet being that the Thai government would not allow these companies to go out of business. On October 27, 1997, losses resulting from this investment, combined with a 554 point (7.2%) single day decline in the Dow Jones Industrial Average (the second largest point decline to date in index history), forced Niederhoffer Investments to close its doors. In a lawsuit that Niederhoffer later filed in the U.S. District Court for the Northern District of Illinois against the Chicago Mercantile Exchange, where he traded options, he alleged that floor traders colluded to drive the market down that day to force him out of his positions. Traders at the time said Refco may have been responsible for as much as $35 million of Niederhoffer's losses.[7]

New fund

Since closing down his fund in 1997, he began trading for his own account again in 1998, after mortgaging his house and selling his antique silver collection. This original fund is called Wimbledon Fund, the name reflecting his love of tennis. He began managing money for offshore clients in February 2002, with the Matador Fund. Niederhoffer employs proprietary programs that predict short-term moves using multivariate time series analysis. In a five-year period beginning in 2001, Victor Niederhoffer's fund returned 50% a year (compounded). His worst year in this period was 2004, returning 40%. In 2005, he returned 56.2% (as reported in eFinancial News). On April 6, 2006, the industry group MarHedge awarded [8] Matador Fund Ltd. and Manchester Trading, two funds managed by Niederhoffer, the prize for best performance by a Commodity Trading Advisor (CTA) in the two years 2004 and 2005.

However, Niederhoffer's funds were caught up in the 2007 financial turbulence and credit crunch, and the Matador Fund was closed in September 2007 after a decline in value of more than seventy-five percent.[9][10]

From 2000-2003, Niederhoffer co-wrote with financial writer Laurel Kenner a widely read weekly column on the markets for CNBC MoneyCentral.[11] He and Kenner co-wrote Practical Speculation (John Wiley & Sons, February 2003), called "the best trading book of the young millennium" by Active Trader magazine. Niederhoffer's life story, and the lessons he learned, were told in the 1997 best-selling book The Education of a Speculator.

On his website[12] Niederhoffer claims to be proudest of having had "a benevolent influence" on people that came in contact with him. At least a dozen employees whom he started out or taught became billionaires or multi-centimillionaires, including Monroe Trout, Toby Crabel, Jake Burton Carpenter, Stu Rose, John Hummer, and Roy Niederhoffer (Victor's younger brother), all of whom are money managers or entrepreneurs.

Victor Niederhoffer employs promising young traders, whom he mentors. He encourages them to develop their own trading strategies and runs his firm more like a science lab than a traditional trading firm.


Niederhoffer was a winning hardball squash player and is a member of the squash hall of fame.[13] Niederhoffer had never played squash when he entered Harvard University in 1960, but he had played other racquet sports. One year later, he won the national junior title, and, by the time he graduated, Niederhoffer was the National Intercollegiate squash champion. He won the U.S. Nationals five times (a record exceeded only by Stanley Pearson who won his sixth in 1923). He also won three national doubles titles. In 1975, he defeated one of the greatest players in the history of the game Sharif Khan in the final of the North American Open (the only time that Khan failed to win the title in the 13-year period between 1969 and 1981).

Other activities

Niederhoffer is also the founder of the NYC Junto, a libertarian group hosted on the first Thursday of every month since 1985. He is an enthusiast of Ayn Rand. The NYC Junto focuses on libertarianism, objectivism and investing and was inspired by the Junto hosted by Benjamin Franklin in Philadelphia from 1727 to 1757. He has six daughters and one son.




  1. ^ The Web Site of Victor Niederhoffer & Laurel Kenner
  2. ^ a b Niederhoffer, Victor (1997). The Education of a Speculator. 
  3. ^ Market Making and Reversal on the Stock Exchange
  4. ^ "Niederhoffer Papers". Google Scholar. http://scholar.google.com/scholar?q=Victor+Niederhoffer&hl=en&lr=. Retrieved 2009-03-03. 
  5. ^ Niederhoffer, Victor. The Education of a Speculator. (1998) p156 ISBN 0471249483
  6. ^ Niederhoffer, Victor (2003). Practical Speculation. 
  7. ^ Robison, Peter (October 27, 2005). "Bennett's Refco Scheme Exposed by Late-Night Hunch" (PDF). Bloomberg. http://www.beearly.com/pdfFiles/Refco27102005.pdf. Retrieved 2006-09-18. 
  8. ^ "MARHedge Performance Awards 2006: Winners". Marhedge. April 7, 2006. Archived from the original on 2006-07-13. http://web.archive.org/web/20060713142739/http://marhedge.com/performance/ny2006/winners.asp. Retrieved 2006-09-18. 
  9. ^ Cassidy, John (October 15, 2007). "Annals of Finance, The Blow-Up Artist, Can Victor Niederhoffer survive another market crisis?". New Yorker. http://www.newyorker.com/reporting/2007/10/15/071015fa_fact_cassidy. Retrieved 2007-10-10. 
  10. ^ Zuckerman, Gregory (October 10, 2007). "Veteran Trader Loses Investor, Closes a Fund". The Wall Street Journal: pp. C2. 
  11. ^ "Contributors:Bios". MSN Money. 2006. http://moneycentral.msn.com/Content/contributors.asp. Retrieved 2006-09-18. 
  12. ^ Niederhoffer, Victor (2006). "About Us". http://www.dailyspeculations.com/. Retrieved 2006-09-18. 
  13. ^ "Victor Niederhoffer: Opened up Squash". Squashtalk. 2006. http://www.squashtalk.com/profiles/niederhoffer.htm. Retrieved 2006-09-18. 

External links

Источник: Victor Niederhoffer

Laurel Kenner

Laurel Kenner (born in California in 1954) is a financial writer and commentator in New York City whose columns have appeared on CNBC Money, worldlyinvestor.com, and TheStreet.com. She holds a certificate in piano from the University of California, Los Angeles.

During the period 1989-1994, she was an award-winning aerospace reporter for Copley Los Angeles Newspapers and subsequently, from 1995 to 2000, she was chief US stocks editor at Bloomberg News. In 2003, she co-authored the book "Practical Speculation" with Victor Niederhoffer.

Laurel Kenner is the mother of Aubrey Darwin Niederhoffer, born in 2006.


*Niederhoffer, Victor, 1943- and Laurel Kenner. "Practical speculation". Hoboken, NJ : Wiley, c2003. vii, 388 p. : ill. ; 24 cm. ISBN 0-471-44306-9

Источник: Laurel Kenner

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