America is not what it used to be, it’s people are easily manipulated and weak. They do everything the government says without a 2nd thought. It’s sad.

from a chap on Twitter - his name is irrelevant. too many ppl go on about that easy to be bullish about many things in particular in the US of A in my humble view.

Stefan Jovanovich comments:

If that statement were made about any other country of any size from Denmark to China, it would not be taken seriously. What literally unites "informed" and "educated" people worldwide is the hope and belief that this country full of fat people who don't learn foreign languages and do not surrender to the metric system can somehow be brought to heal. What they cannot accept is the fact that the country is so large and various and so maddeningly Democratic that "policy" only gets decided for good after, as Van Buren said, Americans have taken the time to have "sober second thoughts". So, after nearly two years of stupidity, we are to the point where the rules for Covid will, as Biden just said, have to be made by the states. Just in time to disappoint all those "responsible" conservatives there is a majority who want to joinThe Anti-Federalist Society.

Nils Poertner adds:

each country, continent, etc faces its own unique challenges now - eg Germany (and the rest of EU - also UK) sitting on the tracks and the train is coming in form of an energy crisis, among others. and one can say to ppl 3 times that the train is coming :) but better to walk away or profit from it. i don't live in the US. am sure you guys will manage - defeatism was never an American thing anyway.

James Lackey responds:

Hubbert Peak was 1957 and my dad god rest his soul made fun of that til the end of his times. There will never be an energy crisis. It goes against physics. Like jobs and government they can not be created nor destroyed just the way we pay or play is different.

What we fail to realize as American men is the women and children adapt quickly like a finger tap snap! They bitch moan complain and then say ok cool let’s do it differently
Just don’t ask first lol.

What’s remarkable about consulting for me is this general quote: "Everyone wants to know why why why!" I say yes sir so what? I get a death stare then quote von Steuben then shake my head Yes! As I state good enough for General Washington should be ok cool with us.

Nils Poertner replies:

Adapting to a new econ landscape, creating new jobs, finding new mkts, trading etc… and so on - is one thing and Americans are indeed quite good at this. that said…if you step back for a moment and look at the status of human beings around you with some compassion and benevolence - from the heart level - and at what level they are /we are - or society in general - then you surely see or sense that there is a lot of upside potential to say the least….



Sexual selection

December 28, 2021 | Leave a Comment

whenever you see the latest self-serving item (invariably bear) from such luminaries as the sage, the palindrome, or the upside-down man, I think we are seeing male-versus-male competition and the bighorn sheep.

Vic's twitter feed



Test, test, test…

December 27, 2021 | Leave a Comment

after 3 straight years of above 10% rise, what are chances of rise next year? big article in wsj says that banks are skeptical. is this bull or bear? how can this be tested? after a big rise in last 3 months the S&P is neutral to bear 30 days later from 1996 to present.

Vic's twitter feed



Beating the Stock Market, by R. W. McNeel (1926), could have been written by Graham in 1950 and contains the worst advice for customers that could have been given 1000 years ago and is still being given today: "Stocks are to be bought at low price - and only by so doing can one make money." the idea is that when stocks are low, people get frightened and at these times they would not think of taking money out of their banks and buying stocks. the idea is to sell when stocks are high, get out of the market, wait for the inevitable decline and then get back in. This is almost like it was written by Alan Abelson and his current day followers except that even after the 1987 fall where stocks fell 30% to Dow 400 the former was still bearish and called the decline a start.

What are the problems with this approach? (1) the market is more bullish at a new high than at a new low. (2) the stocks that go up the most have a higher expectation than the stocks that are down the most. (3) the market has a 10,000 fold a century drift upwards and thus you can never never be successful if you get out and wait for the "inevitable drop". (4) growth stocks perform much better than value stocks.

Other bad advice in the book which reads like it was written today is never buy new flotations as Rockefeller and Morgan lost money. Rock and Morgan lost money when they didn't stick to their list and invested in railroads. New Haven and Colorado Fuel and Iron were their downfall.

all these counter to the terrible and destructive advice in the book and other uttered today in the media must be tested. I will endeavor to provide such tests here in the near future.

here's a more current version of McNeel but the original book that Alan Millhone gave me as present was written in 1926.

Vic's twitter feed

James Lackey writes:

My immediate question is why are these books sellable? We realized they get published because as Pam might say that’s what book sellers do. She’s one of the many book published experts on this list.

Perhaps Vic's advice which is granite rock solid is that it seems too easy! To be honest I thought that as a young spec. Now I realize this:

It’s hard to be bullish all the time.
Everyone calls us fools.
Then they point out our faults.

If we dare share logic and my goodness statistical data to prove why we are bullish all the time they weaponize our insecurities. The bears are smart and have very good arguments. They can be spiteful mean men. I’d be an old mean SOB too if I was wrong on average about everything.

Alex Castaldo adds:

It has been more than 25 years since I read this book in the reading room of the New York Public Library and I don't have a full recollection of it. I went to read it because it was mentioned in another book (or article) by Dean LeBaron and the library seemed to be the only place to find it. At the time I was reading as much as I could about investing, both recent works and what others considered "classics".

The main point of the book I thought was the importance of independent thinking in investment. The author points out that most people are like sheep and follow what they hear from others. A good investor should guard against this and try to come up with his own judgements. If I recall correctly the author coined the term "contrarian investing" to describe this. He explained that "contrarian investing" does not mean believing or doing the opposite of what everyone else does or believes. Rather it means doubting what others believe and being willing at times (but not all the time) to take a different position.

I did not dislike the book. I did think it perhaps a bit too obvious. If you are going to "outperform the market" almost by definition you have to do something different than what everyone else is doing. Also, it may be easier said than done. Some people, such as the Chair, seem to be good at coming up with their own opinions, but most people are somewhat conventional and it is not clear what they could do to change. Would just being aware of the need to think independently be enough?

I also thought the term contrarian does not seem the best choice for what McNeel is trying to describe. (It sounds like mulish opposition to what everyone believes). "Independent thinking" or the term coined by Michael Steinhardt "variant perception" seem more appropriate to me. But still it was interesting to see what the originator of the term thought it should mean.



 This is one of my favorite stories. I hope you enjoy it, and I wish you a Merry Christmas. — Victor Niederhoffer

High on the mountainside by the little line cabin in the crisp clean dusk of evening Stubby Pringle swings into saddle. He has shape of bear in the dimness, bundled thick against cold. Double stocks crowd scarred boots. Leather chaps with hair out cover patched corduroy pants. Fleece-lined jacket with wear of winters on it bulges body and heavy gloves blunt fingers. Two gay red bandannas folded together fatten throat under chin. Battered hat is pulled down to sit on ears and in side pocket of jacket are rabbit-skin earmuffs he can put to use if he needs them.

Stubby Pringle swings up into saddle. He looks out and down over worlds of snow and ice and tree and rock. He spreads arms wide and they embrace whole ranges of hills. He stretches tall and hat brushes stars in sky. He is Stubby Pringle, cowhand of the Triple X, and this is his night to howl. He is Stubby Pringle, son of the wild jackass, and he is heading for the Christmas dance at the schoolhouse in the valley.

[For the entire text of the story, please follow this link].



Most farmers plant a seed but don't constantly check every 5 minutes whether the seed has grown. They can live with some basic uncertainty called faith in the process. (may be changing now with new farming methods…)

Compare that with modern human behaviour of constantly checking a phone or a stock price or social media - that is not natural behaviour - it is normal though.

If enough behave unnaturally, perhaps we adversely effect the outcome? Too much attention then..? Am wondering whether constantly looking at a topic, or talking about something may adversely affect the outcome, e.g., way too many ppl talk about some strange health issue that started early in 2020.

Stefan Jovanovich comments

Farmers do, in fact, check their field crops regularly using GPS, moisture monitors and cross-checks against the prices of corn, beans and natural gas (used for drying). We humans with our opposable thumbs are permanently addicted to the use of tools. That is the one consistent behavior that has identified our species since we became one. Why? For the same reason sea otters play with rocks and then use them to break abalone shells - making things is fun and profitable.

Nils Poertner responds:

yes, I know modern farmers using more high-tech equipment to survey and manage their crops etc - not all bad - there must be some happy medium though? too much control or trying hard is a sign of deep rooted anxiety and lack of trusting the process. we may see that playing out in many ways now in politics etc.

James Lackey writes:

My brother created a work game. He hired our X bmx team kids that are now young men. He turned work into a game. The pay rate is a days labor. There is no time kept. Play all we want and there is 9 innings. Rain outs only happen in a hurricane. We play a full game. The slaughter rule is if we are up by 10 in the bottom of the 6th we pack up for tomorrow. 70% of the games are slaughtered. He never changes the rules of the game.



Nhlanhla Mhlanga is a bright man. He will soon graduate from Swaziland's only university, speaks fluent English, and has taken many advanced courses in math and statistics. Unfortunately , he still has to work for less than $1/hr.

My son and I are looking to find him work online, his only hope to earn a living wage. If you are interested in his extremely affordable services, part or full time, please contact him. See his skills and contact info.

He is currently reteaching me some concepts in statistics for $10/hr. It is incredible how much money he saves me compared to if I'd hired a similarly qualified tutor in the US. The free market is beautiful.

Vic's twitter feed



The Power of the Dog - typical of the denial of the adventurous spirit, the pathbreaking spirit that made the west a vibrant place. proves the point that any western that's made these days has to show the cowboys as weak and vile, drunk and taking advantage of the minorities. Any westerns these days have to be anti-westerns, showing cowboys and ranchers to be evil. perhaps transgender, mercenary, unfair wasting their life away. this one has the cowboy and dr. as the murderer. so woke. never waste your time.

power of dog– saw two good reviews in woke newspapers, was recommended to me. wasn't completely borrowed form 1902 trail drives like Larry McMurtry. Bronco Henry so contrived. to find out good Westerns of heroic nature, listen on Audible to Elmer Kelton - tells the truth.

NYT has acclaim for it because it dispels and shows the lie of america's foundational myths. that's a real review typical of our times.



Poker, Sex & Dying

December 18, 2021 | Leave a Comment

Kora Reddy recommends:

Poker, Sex & Dying: Inside the Mind of a Gambler

The classic guide for winning at poker is back in print - and better than ever! Praised by poker experts and aficionados for years, Poker, Sex & Dying trained scores of high-stakes champions to play poker better - by learning to 'play" people. The pros swear by Anderson's poker 'Bible." From page one, you'll recognize the character types Anderson identifies - because you've sat across the poker table from them before! Now - face them with confidence, as you use the tips, strategies and player profiles Anderson highlights to beat them in the mind game of poker - time after time.



the bonds were up as usual on the inflation number, -10 today but up 48 ticks yesterday. but stocks went down on the ppi number which presumably has wholesale prices of 1 month ago. as always the market goes where it wants regardless of the news.

James Lackey writes:

Mr Vic Wrote: "calumniate, traduce - wrongfully accuse." the 6.8% inflation rate announced on the cpi for friday was good enough to raise the S&P futures to an ATH on a 1% rise. as mentioned repeatedly the inflation is not a problem. bonds and mortgages predict a 5 year rate of 1.5%.

what's worse is that the current administration is being wrongfully accused of driving inflation up by miles to this rate. when it comes down as will be seen on all future cpi's and eci, one should not credit with the great miracle of driving it down. its was front page news about the horrible spike. its not the fault of bbb so much, what's wrong with all these programs is the opposite of capitalism (i dare not use the word for fear of total cancelation). in any case a great opportunity to go long sp on future releases like last friday.

There is something I need to say. This statement took 20 years to pass. Guys I have never agreed with Victor Neiderhoffer publicly because I had to or for any other reasons than this one: He’s correct.

If we need a reason inflation isn’t ever a problem outside of the printing press or the rigged short term rates set by the central’s for their 12 and only 12 clients, when businesses are left alone to do their thing it is this one which probably comes from Vics books but the gist is: Business men drive profit to Zero!

If you can’t wrap your head around that one think of Trucks in transportation services. There are times in history where Trucks have lost money. It’s not that truck drivers cost too much or fuel or repairs. It’s the business. A truck will take a lower load vs no load at all dead head.

That’s easy to understand. What is driving me more insane, more crazy or best stated by my bmx racing kids is your crazier than usual Mr Lack. Why do industries as a whole seemingly lose on purpose? An example is BBBY or cars in general like Autonation, Sonic et al? Why would any business not.

Text book "pure competition" was described as agriculture in my old books. Why? How why what in the world are they doing driving profit to zero? Please help with anecdotal evidence and stats if we get them.

Here is why: Covid rigged shortage some of these old line businesses like food service Carz and others are running 10% non levered margin profit or triple of what was stasis and as usual driven to zero.

My hypothesis is men never learn as a people. A person is smart but people can be toxic as hades and let’s not forget Every day is better than the years 1942 to 45 at least for Americans.

Duncan Coker observes:

5-year TIPS yield -1.6%, with 5-year Treasuries yield 1.2%, implies a 2.8% inflation rate over the period. Wake me up when it hits 5%.



some themes of the fray. where there is an absence of congealment, the situation is classified as an open game. where there is a binding element, the hudooing of certain pieces (chart patterns) in close proximity to the middle price, the situation is classified as an open position.

as a general rule the fundamental strategy in handling an open game is to make waiting moves taking care not to advance any piece to any square that mite be a liability. on the other hand in the closed game denoted by structural solidity of material, every move made by both withholding or waiting moves are not to be found. therefore it is much easier to lose a game of markets or checkers involving a solid formation through faulty structural developments than it is to lose an open game where it is so much easier to anticipate the results of moves. Champion players seldom lose an open game but they frequently err in the closed game.

if you want to stay out of trouble, keep away from complex arrangements of the market (your pieces with those of your opponent). when you have the choice, play the open and flexibly situated.

Willie Ryan, Championship Checkers Simplified (1951)

Read A Psychiatrist Looks at Checkers from The American Checkerist (1950). Scroll down about half way and click on the scanned pages from the magazine.

Vic's twitter feed



El-Erian Says Transitory Inflation Call Likely Fed’s Worst Ever

There seems to be much agreement on my post about the former partner of the Upside down man. Who are the other useful idiots and why are they predominantly wrong?

why is the big data provider and their major expert writers so wrong all the time? (1) they are always bearish. in line with their former hatred of 45 and now the institutions like the fed that are hold overs. (2) they don't realize that there is a drift in the stock market. (3) which ever market is down the most they come up with reasons to be woeful about it. (4) they have a political agenda that is very negative and very political for what's happening in the US. what other reasons can you think of? can the idea be generalized to the big options firm?

(5) most of their columnists like Mike Lewis and the useful ever wrong former partner of the upside man are highly progressive and tend to be distrustful and angry with what's happening. they fail to take into account regulatory capture and the return on capital investment.

the fed will do its thing and show its relevance. the hatred and shame for the US will be dissipated tomorrow perhaps.

at least the buttoned down pseudo academic former partner of upside down man gave a tell by telling us the low interest rates were much too low on a day when interest rates had one of the biggest declines.

Vic's twitter feed



calumniate, traduce - wrongfully accuse. the 6.8% inflation rate announced on the cpi for friday was good enough to raise the S&P futures to an ATH on a 1% rise. as mentioned repeatedly the inflation is not a problem. bonds and mortgages predict a 5 year rate of 1.5%.

what's worse is that the current administration is being wrongfully accused of driving inflation up by miles to this rate. when it comes down as will be seen on all future cpi's and eci, one should not credit with the great miracle of driving it down. its was front page news about the horrible spike. its not the fault of bbb so much, what's wrong with all these programs is the opposite of capitalism (i dare not use the word for fear of total cancelation). in any case a great opportunity to go long sp on future releases like last friday.

Vic's twitter feed



A music piece by Händel - the Arrival of the Queen of Sheba. One could tell that the organ player is enjoying himself.

So many of us finance do terribly well - financially speaking. But then we see it as toil. Some go to the theater or listen to concert in the eve- but perhaps we got it all backward then?

Laurence Glazier writes:

Let’s remember that Handel was enjoying himself too.

Nils Poertner replies:

Wasn't he a pretty good investor as well?

Most (good) musicians experience life in greater fullness than ordinary folks (like us) and express it via their music, eg, the late US singer Johnny Cash…same thing with him. also good lyric with toil and feeling depressed and the sun comforting him etc. some of my more narrow minded friends are like: "I am rich, I can buy happiness." No, you can't. It is an illusion.

Vic adds:

i listen to verdi whenever i need cheer. every one of his arias and chorus pieces is bite sized to enjoy. verdi was a genius in all things like mozart and brahms. a great investor also was about the richest man in Italy when he passed. maintained amazing secrecy about his mistresses also.

Jeff Watson offers:

Whenever I need cheering up, I listen to Steve Fromholz sing his epic Texas Trilogy, and his Man With a Big Hat. (If that one doesn’t bring a tear to your eye, have someone check you for a pulse.)Beautiful music that celebrates real men, freedom, and the open range.

Adam Grimes writes:

Thank you for the share, Nils. This is a fun piece… I've played arrangements of it literally hundreds of times in church services and weddings, etc.

By the way, if any of you play piano, Handel's keyboard music is vastly underrated. Almost all of it is super accessible and a real joy to play. Worth checking out!

I've been more successful in the past few years finding a balance between my artistic, creative life as a musician and the markets. It's a terribly hard balance to maintain and I haven't quite got it right yet.

James Lackey writes:

The Blues Travelers Run Around, the blues brothers and the prison movies Shawshank Redemption, Clint Eastwood Alcatraz always cheer me.

Verdi is fantastic for its simple yet full and rich chord structure and the similar movie sound tracks. Or how about that chord and crescendo on the TDX patented movie surround sound vrrrrmph there is nothing like the sounds of a properly tuned full blown racing engine at idle then a single thump of the throttle and shut it down to silence.

Simon and Garfunkel the sound of silence is wonderful with the remakes of recent rockers.

The sound of silence trading is one thing, like sunshine itself that is either one of the most beautiful things a day or annoying. The sounds of a single fan on in a room across the hall, a car door, mumbled sounds of laughter on the next block. In a panic as your fingers cut plastic keyboard buttons and you search for an honorable retreat. A big rally, the escape with a proper reduction, back to even you laugh as your holding what you’ve got for the duration as we mumble we should have had the balls to hold all to close.

Then like the sun rising over a few covered manicured field of dreams. You whisper, Put some music on brother…Why is it so quiet in here?

Life without music is death.

Laurence Glazier responds:

Nicely put, Lack, with a great rhythm and turn of phrase. Music is a force of nature we cannot tame, but we can be its instrument.

A quote from the painter David Hockney's latest book, Spring Cannot Be Cancelled:

I intend to carry on with my work, which I now see as very important. We have lost touch with nature, rather foolishly as are a part of it, not outside it. This will in time be over and then what? What have we learned? I am almost 83 years old, I will die. The cause of death is birth. The only real things in life are food and love, in that order, just like our little dog Ruby, I really believe this and the source of art is love. I love life.

Larry Williams suggests:

Food and love?? How about air? How about something to be passionate about—like trading or whatever turns you on.

James Lackey :

Larry as you know "trading for a living" opens up self - I we me - to the world in a very simple output PnL and you can not fake it for long. To complete on the worlds stage full time is to immerse yourself. If you give the market 80% effort perhaps you’ll end up with a 20% loss. Give it 98% maybe you’ll get a 2% profit after expenses and paying yourself a working wage. Go all in and it’s literally limitless. All the money fame fortune a many can ever want.

Take back 2% of your time? The mistress of the market is a very jealous person. If she doesn’t kill you your cohorts running at 100% will.

Trading is one of the best things that has ever consumed me and mine. Yet it consumes me.

Laurence Glazier comments:

Better the passion is in the art than the artist.

Nils Poertner writes:

well said. there is nothing wrong with some healthy ego. but the ego that modern man (modern woman) has formed is perhaps way too narcissistic. We are co-creators in fife and that spirit is encapsulated in many religious books- even by Ralph Walter Emerson. one has to feel it - it has nothing to do with IQ.

In The Gospel of Emerson, Ralph Waldo Emerson is quoted as saying:

"There is a principle which is the basis of things . . . a simple, quiet, undescribed, indescribable presence, dwelling very peacefully in us . . . we are not to do, but to let do; not to work, but to be worked upon."

James Lackey adds:

The gist of whatever m saying comes from my dad and army guys and y’all:
Give a smart man time he finds problems.
Give a real smart guy time he finds solutions.
Give a genius time they find the right questions.

With leadership all 3!work together and create the undiscovered unlimited human potential. Alone without leadership and a dose of pain you get what my dad called "lost souls". Time is the 21st century issue most have too much time to think of problems. Those with solutions have no voice as they live in fear. The genius sit alone talking to the connections.

The genius around the globe never before without a middle man or government wishing some one would take charge and get it done. What is it? That list is now so long it’s an infinity symbol. No begging. No end.

Alston Mabry suggest:

Speaking of music, the Fresh Air podcast has a 3-part Sondheim
retrospective. It's really interesting to hear somebody at that level
talk about his work.

Part 1

Part 2

Part 3




December 10, 2021 | Leave a Comment

Nils Poertner offers:

“There is nothing that man fears more than the touch of the unknown. He wants to see what is reaching towards him, and to be able to recognize or at least classify it. Man always tends to avoid physical contact with anything strange. In the dark, the fear of an unexpected touch can mount to panic. Even clothes give insufficient security: it is easy to tear them and pierce through to the naked, smooth, defenseless flesh of the victim.”

- Elias Canetti, Crowds and Power

Larry Williams admits:

I fear margin calls a lot more than the unknown.

Zubin Al Genubi writes:

I don't fear margin calls due to careful use of risk management techniques as outlined in books by former list member Ralph Vince and Phil McDonnell. Together with diversification its one of the free cards in finance.

Larry Williams concurs:

Me too! My fear of margin calls is what forces RV’s money management rule upon me.

Give Bones asks:

You size your trades using optimal F?

Larry Williams answers:

Yes, a form of it I have adapted it to my trading style.



Bond gyrations

December 9, 2021 | Leave a Comment

bonds gyrating madly to maximize vig and stop out - up 5 full pts last week, down 4 full pts this week. using friday closes. hats off

what is difference between an open position and a closed position in markets and board games and how should you adjust your play accordingly? how to define?

and with all the gyrations bonds have moved from (say) a 1.4% a year inflation forecast to a 1.5 % a year forecast. if these forecasts are too low, which probably they are quite accurate, then purchasers of bonds would be going into probable losses in real money terms.

Vic's twitter feed



three cheers for Lubabalo Kondlo from a shanty town in South Africa who just won (tied) for the world championships of checkers. he is a programmer but is very poor and is suppressed by the South Africa sports authority which is the old English in form. Alan Millhone is the pres of USA Checkers.

World champion checkers player visits Belpre

Lubabalo Kondlo came all the way from South Africa to meet with Alan Millhone, Belpre resident and president of the American Checkers Federation

just some facts: (1) checkers is at least as difficult as chess. it requires precise thinking often 50 moves ahead. with its binary aspect it is the closest game to computer logic. (2) Luba lives in a shanty town and often can't afford a computer or its connection.

(3) While Nelson Mandela was in Robben Island Prison his favorite game which he played often was checkers. there are an amazing number of top checker players living in shanty towns like Luba. (4) Luba is a fine gentleman with exemplary character who is a credit to humanity.

(5) Luba always carried a Wiswell book with him for study. (6) Luba can play 15 checker games blind folded. if i've made any errors in this Alan Millhone will gently correct me.

Arthur Niederhoffer (father of Victor and Roy and Diane) loved checkers. when we visited the first thing we did was to play a game. I never beat him until the day before he passed away. He purposely let me win by a block. he said it was like his body. the incident led to my book Edspec. He said to me at the time (you have a good move) and then i could give him 2 for none and he couldn't move (in checkers when you can't move you lose) the incident I wrote up, sent to my friends. they all said I should expand it. and thus, Education of a Speculator.



with bonds near a 6 month high, forecasting a very low future inflation rate, and oil in the 60s down 25% from recent levels — with gas soon going at $3.00 a gallon compared to $5.00 recently and grains down 25% from highs

the problem with bbb and the others is not inflation, it's pork and socialism, and ruining the capacity of the economy to create jobs

the idea that inflation is a killer falls into the hands of the adversary. r's and libertarians and those on the rite have been sounding the alarm bells about the deficit for 5 years. when will they stop the false alarms?

Vic's twitter feed


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