Jan

19

Books, from Victor Niederhoffer

January 19, 2009 |

The Imagineering Way: Ideas to Ignite Your Creativity by the imagineers of the Walt Disney imagineering team is a behind the dreams look at making the magic real and are inspiring tableaux for how to be creative. The imagineering way is always to believe in the impossible. To laugh. To make many models of a problem, some too big, some too small, and then usually to take a middle course. To start at the end of a problem and then to work back to the beginning. To dream big and establish a culture that fosters it. In the only sensible thing that the former boss there said, he quotes Disney: "Curiosity keeps leading us down new paths, exploring and experimenting are the beginning of creative imagination and technical know how." He then adds, " Not only are the imagineers curious, but they are courageous, outrageous, and their creativity is contagious."

The market during the days that I was out was totally outrageous moving down to below Dow 8000 at 7995 at 12:30 on Thursday 1/15. But it was Thursday, and after seven days down, there was no way that the problem of where it was going could be solved by the usual means. An imagineering solution as to where it was going to end without regard to the obstacles along the path would seem to have been the best way to solve the problem, aside from the fact that it was Thursday, and that's always a nice day for violence to reach it's climax and be dissipated before the end of the ride. It would be good to apply the imagineering culture and methods to market moves.


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3 Comments so far

  1. George Parkanyi on January 19, 2009 6:27 pm

    You could probably do some interesting things with options. Say it’s a rapid decline and everyone is buying insurance with puts and premiums have risen. You could do a ratio trade like writing some fat naked puts and maybe using part of the premium to buy some lower-priced calls. Both would make money if there is a reversal, especially a sharp one. If not, you’d pick up some stock at a lower price and then perhaps you could repeat the maneouvre, while writing some calls against the new stock.

    This is just one example, but much like ancient hunters used to fan out and herd their prey to a kill zone, I could envision “boxing in” the price until no matter where it goes you end up with a net profitable position. Another analogy would be laying a mine field. Imagine populating the price-scape with options in such a manner that if the price sees you coming, it makes a dash, but then steps on one or more of your “mines” and explodes into a big profit.

    Or, imagine a bungee cord. Your price has plummeted, but at some point it stabilizes - just hanging there; it may be seconds; it may be minutes. Is it going to spring back? Put a stop buy right above, and if you get filled a tight stop right below. If you get filled, another stop buy a little higher up and so on. If the market rolls over do the same after the next down-leg (you may or may not have accumulated a small stop-out on the last attempt.) But if you get a sharp rally, the scaling up could become profitable quickly.

    Cheers,
    George

  2. douglas roberts dimick on January 20, 2009 1:33 am

    One might host a movie night for “Seabiscuit” (2003)…

    “It was the end and beginning of imagination all at once.”

    dr

  3. Valery Kotlarov on January 23, 2009 7:20 am

    I find this imagineering similar to what Bateson describes, - new patterns come out of randomness. In computers, this would mean some randomly generated sequence of numbers or else (which eventually would cover the whole spectrum )

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