Good Reading Highly Recommended
Practical Speculation, Victor Niederhoffer
Book Description
The follow-up to his critically and commercially acclaimed book The Education of a Speculator (Wiley: 0-471-13747-2) has finally arrived. Adventures in Speculation continues the story of a true market legend who ran a hugely successful futures trading firm that had annual returns of over thirty percent, until unforeseen losses forced him to close operations. Like a Phoenix rising from the ashes, Niederhoffer returns to the world of trading stocks, futures, and options, with a new colleague and a new approach. With an inside look at risk and survival, this book offers readers a compelling and inspiring story of how this top trader reinvented himself.
Book Info
Victor Niederhoffer and Laurel Kenner probably know more about short-term movements than anyone else. Their knowledge, based on sophisticated analysis of their unique database, underlies the findings in this book-an invaluable guide for speculators.
From the Publisher
". . . the best trading book of the young millenium. . . offers more trading 'truth' than a dozen typical market books combined. It's in a league of it's own." Active Trader magazine
From the Inside Flap
In investing as in life, it’s not whether you get knocked down–because eventually you will–it’s whether you rise from defeat. Risk of success and failure is simply part of the human experience and is magnified in the financial markets, where speculation–the act of assuming a business risk–rules.
In the follow-up to the critically acclaimed, bestselling investment classic Education of a Speculator, market veteran Victor Niederhoffer, joined by CNBC Money co-columnist Laurel Kenner, shares his comeback experience from the firing line. By examining the remedial lessons of defeat, they show that it is possible to climb the stairway to success–even under abysmal market conditions.
In Practical Speculation, Niederhoffer and Kenner explore the backdrop of myth, misinformation, and propaganda that bombards investors daily through every media channel. Superstitions, backward looking observations, and out and out old wives tales are exposed. Then, after debunking market fallacies, they provide the antidote to manipulation–the scientific method–a testing that verifies the probabilities of obtaining practical profits. Niederhoffer and Kenner uncover and test tradable ideas so you can become a more independent and successful investor.
Comprising two equally informative parts, Practical Speculation strikes a perfect balance between the need to understand market myths and how they are propagated and testable, tradable strategies for speculators. The first part, "Mumbo Jumbo and Moonshine," dissects the common errors, fictions, fallacies, and propaganda that may induce you to "lean the wrong way" and lose money to market players such as brokers, specialists, analysts, and investment bankers. Niederhoffer and Kenner clearly describe what’s wrong with most approaches to investing. They debunk the myths and propaganda surrounding the earnings-return relationship and technical analysis; present a case study of chronic negativism, which can be just as harmful as overly bullish propaganda, through an interview with financial journalist Alan Abelson; deflate the ballyhoo about value stocks and its underlying philosophy by confronting financial legend
Benjamin Graham; run the media’s market coverage under a whole-body scan; and quantify the effects of hubris and humility on individual stocks.
After tearing down the barriers to profitable investing in Part One, Niederhoffer and Kenner outline a constructive series of approaches in Part Two of Practical Speculation that will serve as a solid foundation for making rational decisions about the markets. In-depth insight and expert advice guide you every step of the way. You’ll learn how to survive and thrive in the markets by setting up a defend/attack game plan; avoiding false correlations; utilizing market thermodynamics to make predictions; negotiating an edge when trading; and profit from studying the patterns linking real estate and business cycles. With additional discussion about the story of Value Line and the biotechnology revolution, Practical Speculation skillfully bridges the gap between theory and practice.
In the quest for investment success, there are no shortcuts. Practical Speculation gets to the heart of wealth creation by providing honest, accurate advice and everlasting techniques that will enable you to confidently make independent decisions about your investments.
From the Back Cover
Praise for PRACTICAL SPECULATION
"This is a wonderful book. Victor Niederhoffer and Laurel Kenner probably know more about short-term movements than anyone else. Their knowledge, based on sophisticated analysis of their unique database, underlies the findings in this book–an invaluable guide for speculators."
–James H. Lorie, Eli B. and Harriet B. Williams Professor Emeritus of Business Administration Graduate School of Business, University of Chicago
"A Rabelaisian romp down Wall Street. Always taking the unconventional course, this book is fearless and occasionally shocking, but always the conclusions are backed up by supporting numbers. It leaves no sacred cow unskewered. Bold analogies and clever insights spill from its pages. Recommended to those seeking both fun and profit."
–Richard Zeckhauser, Frank P. Ramsey Professor of Political Economy, Harvard University
"A fascinating read, one that will both entertain and educate."
–Edwin S. Marks, Chairman, Carl Marks & Co., Inc.
"Practical Speculation is so good that I’ll guarantee it. If it’s not for you just return it to me with your sales receipt for a full prompt refund."
–Martin Edelston, Publisher, Bottom Line Personal
"Pearls of investment wisdom from a Wall Street legend that should be treasured not only for their insights into the workings of the market, but also for their candor and humor . . . I’ve learned more from reading Niederhoffer’s works than I care to admit, and recommend this to anyone with serious financial aspirations."
–Andrew Lo, Harris & Harris Group Professor
MIT Sloan School of Management
About the Author
VICTOR NIEDERHOFFER’s storied career as a speculator spans more than twenty-five years. He began speculating in commodities in the 1970s, and through 1997 held one of the most successful track records of any hedge fund manager. He currently manages money for overseas clients and trades for his own account. Niederhoffer is the author of the critically acclaimed and bestselling Education of a Speculator, and has written numerous articles for scholarly and professional publications including the Financial Analysts Journal. A magna cum laude graduate of Harvard (1964) and the University of Chicago (PhD 1969), Victor taught finance at Berkley and founded Niederhoffer, Cross & Zeckhauser, a mergers and acquisitions firm that was a leader in the field for many years. During the 1970s he dominated the squash world, claiming the world title in 1976. He currently writes a weekly column for CNBC Money with Laurel Kenner.
LAUREL KENNER is a financial writer. Her columns on the stock market, co-written with Victor Niederhoffer, have appeared on CNBC Money, worldlyinvestor.com, and TheStreet.com. Her journalism career includes five years as chief U.S. stocks editor at Bloomberg News and five years as an award-winning aerospace reporter for Copley Newspapers. She holds a degree in classical piano from the University of California at Los Angeles.
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