Okay, from Victor Niederhoffer

October 24, 2013 |

 Okay, I'm ignorant, and don't know anything about the outdoors or subject of survival although all my kids regularly go to such place as the Grand Canyon where you can't leave Anything!!!!! inside the canyon. But I know that Tom Wiswell was very sagacious and he prepared proverbs for us that he felt was the best book he ever wrote. When he'd be playing, about once every five games, he'd shake his head and frown "I'm in over my head, I have to simplify". He didn't lose a game for 25 years. And then he'd say at the end "take care of the draws and the wins will take care of themselves".

The most important business lesson I've ever learned is "Never get in over your head". Oh my goodness, I've lost so many hundreds of millions by not following that. How could you quantify it. You might always have a reserve of at least 1 times the amount that is required to support a position. For example, if you have 10 of liquid capital, never put up more than 5 of it. Whenever anyone offers to provide liquidity for you when you are about to be tapped out, that's the time when you should have been adding.

Richard Owen comments: 

Kipling's story with his son and the Great War is an example of people simply not knowing what they were getting themselves into. They should have listened to Kitchener.

That's a general trading and survival point: Do you know what you're getting yourself into?


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