Investing with Gurus & Legends – Not the Way To Trend Trade

When I first started my journey with Trend Following I had a big learning curve. I wanted to know who was making money and being the 10 percent that were successful trend trading. One of my first conferences I went to featured Victor Niederhoffer as a ‎guest speaker. Niederhoffer was extremely successful and even ‎managed money for George Soros. He had returned in the 30% for ‎more than a decade. In cases such as this, he was showered with ‎money. Investors only saw the 30% not how he traded. They did not ‎look at his daily equity curve. Within the month there can be ‎tremendous volatility. Many times this is masked by the monthly ‎numbers. Niederhoffer even wrote a bestselling book” The Education of ‎A Speculator”. During the Asian contagion he was hurt badly by his bet ‎in Thai banks as well as his bet on the SP 500. On Oct 27 1997 the SP ‎‎500 fell more than 7% or 554 points. Niederhoffer still felt his ‎assumption was correct and the market was wrong. He thought the ‎proverbial, that the market will bounce back! He had naked put ‎positions on the Stock indices. As Murphy’s law would have it, he ‎ended up being right but his timing was wrong. This was a fatal blow to ‎Niederhoffer. He had to close his fund. ‎
As usual greed has a way of making people forget the past. After closing ‎his fund in 1998 Niederhoffer traded his own account. However in ‎‎2002 Niederhoffer came back and opened his Matador fund. He was ‎returning 50% per year with his worst year of 40%. Again he was ‎flooded with money and in 2007 at the onset of the credit & housing ‎debacle he closed the Matador fund after experiencing a 75% drop. ‎

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1 comment to Investing with Gurus & Legends – Not the Way To Trend Trade

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