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In a message dated 97-11-01 01:18:20 EST, nwinski@xxxxxxxxxxxxxxx writes:
<<
> Niederhoffer obviously felt that the market
> had expanded too far. Haven't quite figured out for myself why he
> thought this. :) He only missed the bottom by one day, but I agree
> that it seemed to be a "gambler's" play, and not a very good one at
> that. I guess he was trying to make up for Thailand in one shot.
> >>
FOR WHAT IT IS WORTH......He didn't miss the bottom....He made
the bottom in one day.
He already had a loosing trade in the Thiland currency.....SO AS NOT TO
REALIZE the shrinkage in the account.....He sold what look to be
a rich premium in PUTS.....to support the loosing Thai currency postion.
In retrospect.....He should have "taken the loss" in the currency.
Any new postion should have been taken on its own merits.
In essence he was already under water before he did the puts.
If you read his book, Educcation of a Speculator,
you will see that he spends some time talking about
"gambling".
In Soros on Soros....It mentions that V N approach was diametrically
opposed to G S. It is interesting that, they lost money on the same day
anyway.
What is going to be interesting is the "unreported" cases that surface
in the next few days/weeks/months. This looks to be just the tip
of iceberg. Ths shot fired over the bow, so to speak.
All the best'
GerryB/jer33:3
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