The Education of a Speculator

by Victor Niederhoffer

Acclaim for The Education of a Speculator, a provocative and penetrating look into the mind, the soul, and the strategies of one of the most controversial traders of all time

"A compelling and an entertaining read." -The Wall Street Journal

"Victor Niederhoffer gives us page after page of distilled investment wisdom. Taken together, this is pure nectar to those who aim for consistently superior stock market performance." -Barron's

"The Education of a Speculator offers plenty of insights into the way markets work, but the epiphanies are what a reader might expect from Lao-tzu rather than, say, Graham and Dodd." -Worth magazine

"The Education of a Speculator is the first meaningful book on speculating. Successful speculating is as fine an art as chess, checkers, fishing, poker, tennis, painting, and music. Niederhoffer brings forth the best from each of these fields and shows the investor how their principles can enrich one's life and net worth." -Martin Edelston, President, Boardroom Inc., publishers of Boardroom Classics and Bottom Line/Personal

"With an original mind and an eclectic approach, Victor Niederhoffer takes the reader from Brighton Beach to Wall Street, visiting all stops of interest along the way. What emerges is a book full of insights, useful to the professional and layman alike." -George Soros, Principal Investment Advisor, The Quantum Fund

Genres: Finance, Biography, Economics, Business, Nonfiction, Money, History

464 pages, Paperback

First published December 1, 1996

Reviews

[Eric Smith · Rating 1 out of 5]

This book was essentially as close to unreadable as a book can get. It feels like the publishing company may have been friends with him and therefore didn't bother to edit the thing.

Given his infamous reputation, his role as the opposite side of many Taleb trades, I read his blog for a few years, and the random fact that I went to school with one of his daughters - I had been meaning to read this book for some time now. I knew the reviews were not very good for it, but figured I would still make an effort to read this.

Don't bother - it is awful.
At best, it is some ramblings about tennis, squash, checkers, contradictory logic regarding statistics and trading, and then what genuinely feels like someone with a manic depressive disorder detailing a mix of their work life and schooling.

I really wanted to enjoy it or even find some merit to it, but it was overall a total and complete waste of time.

[James · Rating 1 out of 5]

Very disappointing, mostly just a vanity book about his life,
and his fathers life, and his grandfathers life...

There's a chapter titled Sex, even that part is boring.

The book was published before the Asian contagion,
when went totally bust, but after that was able to raise more money
from another generation of suckers, then went bust again.

He has vanity pages on the internet and manipulates the content of his wikipedia page, so it's hard to tell how many times he has gone totally bust, probably 3 or 4 times, who knows, who cares?

As a role model, or adviser, he's a loser and an example of what not to do.

[Cristobal · Rating 1 out of 5]

I tried reading this book twice and failed on both occasions. I just can't get past Niederhoffer's self-absorbed ramblings and unnecessary talk about squash. There probably is a reading public for this kind of book but it clearly isn't me. It also doesn't help knowing that a few years after writing the book his fund was wiped out, and then again in 2007. There's a reason why one should distill his professional memoirs AFTER his career is over.

[Nicholas Nash · Rating 2 out of 5]

Tough to follow. Had to stop reading. I'm sure I'll pick it up again one day, but it's sitting pretty on a shelf right now collecting dust.

[Joseph · Rating 5 out of 5]

This book is a great book that touches on so many different topics in life (and how they're linked to speculation). In particular, I liked the discussions on (a) weather (b) board games (c) poker (d) sports etc. The author recommended a list of books too, which I'll add to my reading list.

p/s: this book is as thick as the bible!

[Mark Speed · Rating 4 out of 5]

This is a very interesting and educational book by a master trader. It's a touch overlong, but he reveals his own failings and the failings of many others. It's in these lessons that we see our own failings - particularly our tendency to be 'fighting the last war'. The question is whether we are able to change ourselves in light of these lessons - the inability to change and adapt is the failing that makes us human, and is the reason why so few of us make decent investors or traders.

[Rafael Jose Velasquez · Rating 5 out of 5]

Ever changing cycles are important, what the wise man does at the beginning the fool does at the end. Test everything all theories you have. Think about governments incentives and what they will or won't allow to happen.

[RJTK · Rating 3 out of 5]

This book is at times entertaining and interesting, but just as often filled with pseudo-profound bullshit. The guy also seems to have named his children after characters from Atlas Shrugged, which is pretty cringe inducing.

[Aharon · Rating 4 out of 5]

Fades in the stretch, but he's still my hero. My creepy, creepy hero.

[Nils · Rating 2 out of 5]

Overly long and indulgent. I fought through the final third of the book just to say I had read it, because it was recommended by a finance educator I highly respect.

Niderhoffer is a very good writer, but that just help to clearly paint the picture of what looks like a degenerate gambler, and someone that gives conflicting advice. He says to have a plan and never pull out the calculator during the trading day. All it takes is for someone to say " the markets are crazy today" for him to change strategy and start buying financial contracts. He states you have to be completely focused on trading when in the moment. Later he proudly mentions playing tennis during huge market swings when he has lots of money on the line.

When angry at firm he feels has wronged him, he sends them a congratulatory message. It says that they should make larger trades next time. Neiderhoffer hopes that if they take his advice, the trades will be too big and will lead to losses. I appreciate the honesty, but who would ever take any of his other recommendations after learning this?

My expectations were to learn how speculators were useful to the market by allowing risk to be shifted to people willing to take them. This book did not contain that. I can't recommend this book.

[Mohamed E · Rating 3 out of 5]

A semi-autobiographical treatise of a speculator, sportsman and a music dilettante.

At times it was a dull and excruciating read but I thought seven of the sixteen chapters are a must read for anyone interested in finance and speculation; but while I felt I was tediously trudging through the remianing chapters, they did contain pockets of insights and foresights and despite my three star rating, all in all the book is worthy of reading, perhaps only selective reading though. Topics covered which I found most interesting:

- Arguments against the Efficient Market Hypothesis and also arguments against opponents of the theory
- Occasional stabs at technical analysis and chartism
- Complacency and rigidity of academic finance
- Panics and crashes
- The importance of optimal trade execution and the role of transaction costs, bid/ask spreads (dealer vigorish as Neiderhoffer refers to them) and why he never used stop-losses and limit orders (these insights about stop losses and limit-running are golden)
-Finally, modelling the market as a Darwanian ecosystem

[Viktor Nilsson · Rating 3 out of 5]

This book has a lot of things working against it:
- It is poorly edited (lots of typos).
- It is written in a very oral form (like rap song lyrics).
- It is full of way too long digressions away from the subject at hand.
- It is unstructured, basically just a thick collection of notes, ideas, memories and fantasies (the distinction is often unclear).

Despite all this: Being a speculator myself, I had a hard time putting it down. I can relate to many of Niederhoffer's thoughts, both as lessons I have learned before myself and as food for thought.

If you are a speculator, you will definitely find this an interesting read. Otherwise, it will probably be completely unbearable.

[Paul Barnes · Rating 3 out of 5]

Niederhoffer is a big-time hedge fund manager.

Between ordering this book from Amazon and it's arrival Niederhoffer went bust, betting that Asian markets would lift after substantial falls. That was the greatest lesson of the book - you have to be with the trend, not betting against it.

A colourful character and a fun read.

Nice cover art – with Niederh0ffer in his socks. Great inspiration to be myself given my aversion to wearing shoes.

[Courtney · Rating 2 out of 5]

Read this book because it was recommended to me by a neighbor. Otherwise I would not have finished it. Book jumps around and is not cohesive. Story overall is impressive: Random walk theory - went to the same school where it was invented and criticized the theory publically, research in Japan, and views on Fibonacci.

[Daniel · Rating 4 out of 5]

I'd recommend this book for patient intermediate to advanced investors. The book is mostly a memoir, it's not really an investing book per se, although there's a lot of wisdom here in metaphor form if you're willing to look for it.

[rd · Rating 3 out of 5]

Niederhoffer's a good racquetball player, phenomenal speculator (albeit a blowup artist, but still..), and a mediocre writer. Too much rambling, too little substance. First few pages detailing his emotional state on an FX trade were worth the price of the book though.

[Miguel · Rating 3 out of 5]

I really liked the book. It was very interesting full of hidden insights. I just have one negative point, It is sometimes a bit confusing, so you need to have a bit of understanding of how the stock market works and so on

[Anne Kadet · Rating 1 out of 5]

This would be extremely compelling if it was even remotely readable.

[Mat · Rating 3 out of 5]

I wanted to like it but this is an hard read. Unstructured and too long sentences.
At the end I see a gambler speculating....

[Pathik Om · Rating 4 out of 5]

Victor Niederhoffer has distilled his life's lessons in this book. The book was difficult to read but was filled with deep insights.

[Eli Goldberger · Rating 4 out of 5]

Beautiful and raw stream of consciousness by Victor Niederhoffer. Amazing to read about his life and career and how speculation has changed over the years.

[Chris Morrissey · Rating 4 out of 5]

Usefully, yet quite rarely, the 0ld value investing doctrine is broken by this one - there are some very good accounts of managers thinking for themselves. Refreshing.

[Aaron Wonyalogo · Rating 3 out of 5]

Not that exciting to read. The author have a lot of interesting perspectives of the stock market.

[Max Penders · Rating 3 out of 5]

Got through half, but it was just a painful read so I stopped.

[Javier Villar · Rating 1 out of 5]

I feel that 450 pages weren't enough... It should have been 2000 in order to give a glimpse into such a fantastic ego! HAHA! Come on...

Proper trading is about being surrendered, something which is the opposite of this book.

How come is (used to be) he a successful trader? Well, among all of those who are trying to probe how intelligent and right are, some have to win.

[Donald Plugge · Rating 4 out of 5]

Niederhoffer may or may not be a good investor, but he is certainly quite eccentric. I have him 4 stars, as I just might go back and reread select chapters of the book. Niederhoffer lives life in a big way and that includes a huge 1997 loss of 100's of millions on a bad investment.

How does such a person go on after losing that much money? He goes on by brushing himself off and getting back on the house -- moxie. Perhaps that spirit was behind his push to become a ranking handball player.

The book describes his youth and the influence of various relatives and friends, people who taught him how to play games and even gamble. I enjoyed the read.

dgp

[Ben Peyton · Rating 2 out of 5]

This was all over the place and needed to be cut in half. Also, what got me was the constant attacks against investors who use random correlations to invest but then he had two chapters on how investing is like music and another one on how investing is like sex which were chalk full of random correlations and observations. At that point I had enough of his supposed ideas and it took everything in mean to finish this book.

[William · Rating 3 out of 5]

One heck of an interesting investment mind. He lost millions in the Asian Crisis in 1998 but his story and thoughts are truly unigue. He has a following among some very, very bright investment minds and his insight into different areas of thinking made a great read.

[Charles Melendez · Rating 5 out of 5]

I am here to claim that this is one of my favorite books. It is very un-edited and fresh. It is a topic that I was very interested in, so I did not have a problem reading it, however, I can see others losing interest in reading it.

[Thomas · Rating 3 out of 5]

He's very egotistical, and went out of business in 1997. Nevertheless, he's a smart guy, and a good trader. He talks about playing squash way too much though.