Victor NiederhofferVictor Niederhoffer, the world squash king, and I, the national paddleball champ, first locked eyes at the 1973 St. Louis national racquetball tournament. He had jetted first class and I had ridden a bicycle from San Diego. He, in one black and a white sneaker, and I, in one red and a blue one, stepped back and then gave no quarter. The speculator and hobo over the next twenty-five years converged on a sports, business and intellectual relationship that flew to a head in the New Yorker's October 15, 2007 profile, The Blow-Up Artist: Can Victor Niederhoffer Survive Another Market Crisis?

I wrote Niederhoffer that this profile is a mistitled masterpiece, and he is the quintessential Manhattan financier and court speculator. He replied that I am a survivor in a desert hole and thanks for popping out. What happened in the quarter-century between our sneakers summit and the present abodes? From that St. Louis meeting, Victor, the son of a kindergarten teacher and New York cop, returned to New York to speculate and win hundreds of squash and racquetball tournaments. I bicycled to Michigan for a ten year pro racquetball career while wining five national paddleball titles. I taught both sports across the country, frequently hoboing freight trains or wheeling the Interstates in a '74 Chevy van with a 7' stuffed rabbit named Fillmore Hare riding shotgun. I scoured the nation between clinics for intellects to improve my own, and Fillmore waved them down coast-to-coast with an invisible fishline on one arm.

PaddleThrough the 1970s and '80s, we often laid over in the Big Apple with Niederhoffer, where at each stroke of midnight we would pad the sidewalks in our old shoes to the Manhattan Squash Club to clash rackets in pure or hybrid games using racquetball, paddleball or squash or tennis rackets, bleach bottles, wads of $100 bills, or what have you, with miscellaneous balls. These were my hardest fought challenges, witnessed only by a drunk janitor over the decades who will testify that the matches were split even. As Victor prospered into the 1990s in commodities and merger acquisitions, I grew eccentric and branched around the globe. He climbed to the America's #1 speculator for three straight years, and I peak adventured in 100 countries with as many near deaths. He made or lost a million dollars daily, and I learned or forgot a thousand survival tips. 'Where does that put us?' Fillmore Hare seemed to smirk, and we were on the road again.

On one stopover, we co-hypothesized that a sports champion brings to business the vital skills of organization, strategy, drive, hunger for profit, and honesty for success. To test it, Vic hired me for diverse business ventures throughout the USA, Europe and Southeast Asia. I sought cancer cures, invested in a Hollywood movie, dethroned a spiritualist advisor to Wall Street when she couldn't bend my fork during a séance, and bid and bought thousands of items at myriad book, painting, and antique auctions. But my most thrilling project was as 'The Millionaire', to seed global capitalism, that ended in my getting stabbed in Venezuela. A golden summer ensued, the best of my life, after I limped back to the USA from that swing through Africa and South America. I recall landing one night bedraggled and penniless on Victor's marble doorstep deep in the Connecticut woods. The huge oak door creaked open, and he stood framed like a specter. 'I've been running from danger for eighteen months from hippos, rhinos, gators, a gorillas, thugs, lions, snowstorms, and rip tides in pursuit of intelligence, just like the good old days,' I rasped. He tapped my hat and invited, 'Stay as long as you like. I have work to do.'

Over the next five months of 1996, with a book in one hand and a paddle in the other and a computer screen before my eyes during timeouts, I regained balance. The manor library was featured as 'New England's best', and I knew every title from buying and stocking the shelves in earlier times. There I started writing an adventure autobiography that moved to a basement stairwell for privacy. The busy house sports facilities included outdoor paddleball, racquetball and tennis, volleyball, swimming pool, miles of hiking trails, plus an indoor squash court, small weight room, and a quarter-mile of hallways and stairs on three levels to jog.

There were extreme racquet fests. Niederhoffer is of the odd breed of player who looks always like he stumbles exactly into position, and continually appears to be losing until the match is over. Though he never played indoor paddleball, my favorite sport, he is by my historic tally the third ranked player, such is his overall prowess. It began at age three when his dad threw him with a racquet into a swimming pool and, as it was empty, Vic to this day is a poor swimmer but the four walls and sloped floor rolled the ball in the deep end back to him again and again.

Victor's fortes are mine: Strategy, concentration and execution. There is no room for mental error. Court sports are filled with cold-blooded brawlers and thinkers. The former rise to state champs but can't climb through the hour glass of concentration to a national level because they slip on mental errors. These are what Ben Franklin called errata, deviations from shot selection due to psyching out or fatigue. The cerebral player's plan of limiting mental errors is much about delayed gratification that the probability of shot selection will eventually win match point. It's a ball-buster to play Niederhoffer, who makes on average one mental error per day. He is the unchanging control and his opponent the variable, so the outcome of the experiment depends on how well you stack up. I concentrated so hard in some of these sports contests that afterward I might sink into a library cushion chair next to a wooden Indian pointing overhead and get lost in time.

PorcellianMy host was also exacting if unrelenting up in the trading room. That summer he never asked the series of interns — chipper Ivy League grads with Econ degrees and varsity letters — to match his intense trading hours, but some tried. Three fell pasted to the floor by their own efforts. As the ambulance driver grew more familiar with the route from house to hospital, Vic magnanimously picked up the tabs. One day, I buckled down to equal his circadian rhythm for one week of work and racquets, work and rackets, with sporadic catnaps. Three days later I attained an insight of impending psychosis, and backed off.

I lack Victor's passion for money as a measure of success, except as a means of getting what I want or where I want to go in the world. I get a sensory thrill out of numbers, juggling them, and first plunged into the technical analysis of stock movements during veterinary school where, for six month's an associate and I formed a partnership to advise a handful of investors, lectured to colleges on technical analysis, and made one memorable trip to the Big Board in New York about a year before meeting Niederhoffer.

Victor believes that over short periods — hours or days — rare but predictable patterns can be exploited. He reads printouts from a computer bank spanning our lives like classical music to anticipate a bag, or a crash to sell short. Some summer nights, with the only light burning in the trading room, I would get a fax in the basement as I typed about cannibals, or hear a whisper over my shoulder, 'Come upstairs for a trade.' We scaled three flights to the white trading room jammed with screens, phones and books where the instant he shouted 'Order!' I called it in. Seconds, minutes or hours later, if the great quantifier was right, I returned to the basement to write and he to the bathroom announcing, 'It's time to perform log rhythms until the next window of opportunity.'

WatsonThere were profitable timeouts during the summer routine. Through Vic's good offices I met stellar people who contributed to my gathering data on intelligence. I lost in chess to US Open champ Art Bisguier who once beat Bobby Fischer, lost in checkers to seven-times world champ Tom Wiswell, lost at table tennis to US open champion Marty Reisman, lost a genetics argument to DNA co-discoverer Jim Watson, and was mauled in a philosophical chat with George Soros. At weekend gatherings called brainstorms in the upstairs music room, I frequently saturated early and descended my stairwell to type notes while the intellectuality raged above. Sometimes I heard a cry, 'Help, I'm lost!' and dashed to sketch a map back up to the party. That house was so enormous that the cook faxed Victor in the trading room to dinner and paged the two dogs, Ralph and Mia, by intercom. Two normal homes could fit into the attic, and a phone repairman proclaimed the circuit board to be as large as a city block's.

ButtThe summer stretched into a full year of paddles, parties and fleshing out (together with Niederhoffer) an award winning list of Low Life Indicators grounded on the belief that the wafts from the streets predict and sway the business decisions in skyscrapers. Economic pointers such as the length of discarded cigarette butts, price of prostitutes, freight trains length, billboard advertisements and classified ads won acclaim in Barron's, NY Times and CNN. Meanwhile, we continued to pass like ghosts in the darkened hallways, he to the piano, I to swim, or to the midnight courts for an hour of 'moth ball' in our mismatched shoes. One night he whispered fatefully, 'The biggest fish swim deepest.' That launched a fact finding trip that ten years later ushered in last month's New Yorker profile.

It was Fall, 1996 that I flew from JFK to the first of thirteen emerging markets including Egypt, Sri Lanka, India, Philippines, Korea, Turkey and Thailand. During the next two months, I visited their national stock exchanges, brokers, banks, and government dignitaries, and then typed and overnighted reports on the Low Life Indicators and conventional indices for potential investments before flying on to the next country. The Turkey report raked millions daily for weeks, but my final stop in Thailand sadly precipitated Niederhoffer's 'Black Day' of October 27, 1997. Victor is reported to have lost his entire $130 million portfolio in the Thai stock market crash.

Ironically, a week before this 'first fall', I had returned from the world swing, and stepped over the same marble doorstep that I'd entered a year before, and walked 500 miles on backwoods trails to the Canadian border. No portent of the fall spurred me; it was just time to delve into nature. Two years later, after also hiking the lengths of the Florida swamps, Colorado Rockies, Baja beaches, and Death Valley, I learned about the Thai disaster, and by this time Vic had recovered financially and won back the press. We met next in 2003, when I circled the nation as the Racquetball & Paddleball Legends historian that paused in New York. I grabbed a cab to the manor, clambered weathered stairs to the trading room, and surprised Victor anew by walking by where he traded to sit at a computer ten feet away. 'Hi, Vic. How are you?' I emailed. 'Stay as long as you like,' he wrote back, 'I'm busy.'

In 2004, he founded Daily Speculations, dedicated to 'The scientific method, free markets, deflating ballyhoo, creating value, and laughter,' and graciously included my mounting adventures. I had paddled a hand-hewn canoe through the Amazon to a Brazilian outpost where I was medevac'ed in a malaria coma by military copter to Iquitos, Peru.

No CountryOn recovering through the rainy season, I returned to the USA and bought ten desert acres at the trisection of California, Arizona and Mexico. Three years ago, I dug a hole and now I live beneath the scorching heat. My burrow is 10'x10'x10' into which I slid a camper shell and covered it with dirt. Ten steps down, the air cools forty degrees until the last, where I step over a sidewinder named Sir, to enter the lair. I sit in a captain's chair muttering incantations to Captain Nemo before a laptop computer juiced by topside solar panels, and surrounded by sagging shelves of the half-ton autobiography begun ten years ago in Connecticut. I look up and view my tunnel neighbors peering through a screen wall of 1/4'' mesh. I see lizards, snakes, tarantulas, mice, toads, and a Trader Rat named BandAid whose mother a year ago swapped my reading glasses for her newborn pup that I trained to retrieve gold coins in nearby ghost towns. I leave the animals and digs on monthly supply runs to Blythe, California, an hour and half away.

In September '07, I read in the biweekly rag that the high school needed substitute teachers, and moseyed into the district office to be hired on sight. What a shock, going from rodent to teacher! I got flush and took a motel room where each morning I ride a recumbent bicycle to the classrooms to enrich the kids with studies from beyond. The motel offers an exterminator Labrador dog named Jan who goes room to room snatching roaches and when stuffed plops on my bed to watch Animal Planet. A few weeks ago, I posted 'Do not spray roaches' on my door, only to awaken the next morning and find someone had written, 'Call Stanley at the New Yorker'.

A mystery sprang. Few in this oasis know of New York, much less the publication, and the Hindu manager speaks hardly a lick of English and could say no more, so I searched the Internet to determine that the New Yorker was doing a profile on my old shoe-mate Vic Niederhoffer. I sent out a shot in the dark email, 'Who wants another wonderful quote on you?' Vic answered, "The New Yorker wishes to know what insect drove you blind before the '96 Thai visit." He put me in touch with the fact checker, Scott Stanton, who called me during a snack break when I was surrounded by screaming school kids. 'It was a plant, not an insect, and that wasn't why the Niederhoffer empire collapsed,' I hollered. The fact finder was buoyant at having tracked down a man who lives in a hole two miles from the center target of the second largest bombing range in the world willing to take partial credit for the Blow-up Artist's first detonation. 'I was 20-20 vision by the time I hit Bangkok and stand by my recommendation, despite the outcome. That Thailand visit was the best bet as a mid-nineties emerging market.'

John CassidyStaton declared that Niederhoffer had just suffered a second detonation, and hung up. On October 15, 2007, the New Yorker published 'The Blow-Up Artist', a seven-page profile by John Cassidy that's available online. I don't read such, but when the National Paddleball Newsletter with a circulation of seventy-five asked me to write a follow-up about the speculator I had once claimed was the match of the hobo on court, I acquiesced. I was gratified to read of Niederhoffer's personal evolution in the four years since we met, and felt the honest story evoked Victor's eccentricities and individuality. It included, 'Toward the end of 1996, another profitable year for him, Niederhoffer decided that he wanted to invest in Southeast Asia, which was widely seen as a growing market. He dispatched an old friend, Steven (Bo) Keely, to the region. Keely, a veterinarian who spent six months of the year living in the California desert without a telephone or electric power, had trekked in dozens of countries. On one trip, while paddling down the Amazon, he had contracted malaria, briefly gone blind, and been comatose for a week. Keely believed that assessing a developing country's economic prospects involved not only meeting with the C.E.O.s of leading companies but studying the lengths of discarded cigarettes-the theory being that the wealthier people are, the longer their butts-and the state of the brothels. After a couple of months in Asia, he reported to Niederhoffer that the brothels in Bangkok had recently become much cleaner and safer, and that Thailand was an excellent place to invest. During the previous decade, the Thai economy had grown at an annual rate of almost ten per cent; its interest rates were among the lowest of any country in the region; and its stocks were cheap because they had fallen sharply earlier in the year.'

I continued to read that Niederhoffer had managed to retain some of his assets after his collapse. He mortgaged the Connecticut house, sold a collection of trophy and presentation silver and some of the rare books that I had stocked which enabled him to pay off his creditors. He reconsidered his investment approach and retooled his pattern-recognition software, and six months later started trading again. He shone, and in 2002 initiated Matador, an offshore hedge fund. In April, 2006, he attended a dinner at the St. Regis Hotel, where the hedge-fund industry awarded him the top manager in the commodity-fund category. However, then the second fall. In September, 2007, Niederhoffer was forced to close his flagship, Matador, when many contingencies converged to produce an unanticipated volatility that the company wasn't prepared for. Victor once said, 'America forgives you once, but not twice.' It was like making two mental errors in a lifetime, and now we shall see the steel he's made of. My story is of our lives, and everyone's, of seeking wealth by personal definition while respecting others' choices. Now we walk divergent paths on opposite sides of the country with parallel minds and the same damn shoes.


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