There are few traders who experienced the highs – and the lows – of trading for a living the way Victor Niederhoffer has. George Soros spotted his talent, and made him a partner covering fixed income and foreign exchange. He stayed with Soros until 1990, when he launched his own fund seeded by Soros.
His track record both at Soros Quantum fund and on his own of 30+percent a year for almost 20 years is one of the best of all time. When he began as a trader He turned fifty thousand dollars into $20,000,000 over 18 months.
Then came trouble. He was caught leaning the wrong way when the Asian financial crisis hit in 1997, all but completely wiping Niederhoffer out. But he slowly rebuilt, and once again amassed a fortune, only to see it destroyed by the Great Financial Crisis of 2007-09.
Niederhoffer is a fascinating character, a study of contrasts. He is a nationally ranked squash champion, and former Berkeley Professor of finance and statistics. Undeniably brilliant, yet still unable to adequately manage risk, it is important for all traders to learn what Niederhoffer has to teach. His first book, The Education of a Speculator, reveals the risk embracing style that created his first fortune. The follow up, Practical Speculation, almost, but doesn’t quite, accept responsibility for the prior disaster. It was published before the devastating second set of losses duyring suffered during the credit crisis.
You can stream/download the full conversation, including the podcast extras, on Bloomberg, iTunes, Overcast, and Soundcloud.
Our earlier podcasts can all be found on iTunes, Soundcloud, Overcast and Bloomberg.
Next week, we speak with Matthew Rothman, Head of Global Quantitative Equity Research at Credit Suisse