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In a message dated 5/18/99 9:27:37 PM Eastern Daylight Time,
capstone@xxxxxxxxxxxxxxx writes:
<<
What I do not understand is why did Niederhoffer not offset his trades by
selling futures to take care of some of the risk. He easily could have
avoided those catastophic losses had he simply hit the sp market. That seems
like a strategy.
>>
His big problem seems to be that he bought into the Baht which paid
interest based on FNM "stipped coupons" and traded on the basis
of yield and not worthless Bhat currency. When that deal promoted
by Morgan Stanley went sour, it looks like he deparately "sold"
futures ot generate "cash" balances for the now depleted equity
in his fund. After that it just got worse and worse. One deal
to save the last bad deal. Get even syndrom of gamblers.
I have no personal knowledge, but am reading between the lines
of his book and newspaper accounts.
Gerry
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