Category: Autobio – Originally From America

The Education of A Speculator

[Please note: The word “Featured” on the left side above was NOT inserted by this blogger, but apparently was inserted by WordPress, and it cannot be removed. NO post in this blog is sponsored.]

The Book of the Week is “The Education of A Speculator” by Victor Niederhoffer, published in 1997.

Born in 1943 in Brooklyn in New York City, the author sorted “market advisers and investment newsletter writers” into eight different categories, providing a brief description of their behaviors or personality traits. He classified himself as “The Other World Person” because he ignored the overpaid noisemakers and distractions of conventional media outlets that purported to convey information on which securities to buy, sell, or avoid.

The author’s two data sources for his commodities, currency trading and investing ideas consisted of the National Enquirer and his research results from testing all kinds of variables in statistics-calculations of past securities-market data using software. No other sources.

The mid-1990’s saw great advances in statistics software modeling that could process scads and scads of data; hence, market players could erroneously use past performance of investment vehicles faster than ever before for predictive purposes to help themselves and others lose their money faster than ever before. And those advances might have played a part in the scandals and financial crashes that have occurred with alarmingly increasing frequency in the last thirty years. Big Tech’s and Big Media’s incestuous oligopolies (fraught with political donations) just keep getting more hegemonic, so that power and money keep feeding on themselves ad infinitum. Globalization is yet another wrench in the works.

At the book’s writing, global trade had been maturing for decades, but capitalism was still in its infancy in many territories of the world; particularly in ones that were becoming politically democratic again, or for the first time in their histories. Many European countries were in the process of adopting cooperation rather than competition in their financial and economic dealings. A large proportion of them even voted to use one currency among them. The United States kept to itself, but more and more people around the world were starting to trade or invest in foreign securities, currencies and governmental financial entities, so chain reactions occurred more and more.

The Federal Reserve (aka Fed) has always been a major influence on America’s financial markets. The author contended that the Fed was just as clueless as the rest of the country about what effects its making of rate-adjustments would have on the nation’s economy. It is currently just as clueless. But its announcements are made with such confidence and arrogance, that a large number of their listeners are brainwashed into believing they are receiving valuable information.

The incumbents– known names pre-Internet–became the most influential voices in the financial sphere. The wiliest ones use propaganda techniques to paper over their wrong predictions. They never apologize for the losses stemming from their pronouncements. The walls of the author’s business office were lined with portraits of ones who had disastrous losses.

To be fair, the author himself told various anecdotes of his own failures. In 1992, he bought IBM stock for his own kids. That was an embarrassing mistake. He learned to cut his losses at a certain level of the total money he reinvested. And, he didn’t let his greed get out of control when he was winning.

The author was a champion squash player. One similarity between squash and speculating is externalities–opponents’ actions determine players’ actions in the game. So, for instance, in ten-pin bowling, there are no externalities. In squash, there are. In one college finals-match, the author moved his body in a way that tricked his opponent into thinking the ball was going to go in a certain direction, but it went the opposite way. Traders and investors play similar tricks in their communications in the financial markets. Conditions change rapidly so even the market propagandists’ winning streaks don’t last long.

The reason is:

First, independent thinkers make observations or find obscure data that works in making them money. Then software detects their trading tricks. So word gets around, and everyone else jumps on the bandwagon so that the advantage is lost.

Human beings want so badly— to believe they can predict the future, and love to fantasize about getting rich quick– that they tend to look for patterns and order where none exist. The author did provide one vast generalization that might be valuable, though. His statistical analysis between the years 1870 and 1995 inclusive showed that years ending in the digit 5 were good years, and those ending in 7 were bad, for the American stock markets. He didn’t speculate as to why.

However, politics is one major mover of markets, and the collective mood of the United States specifically, might be a bit more upbeat in years when political uncertainty is at a minimum. Presidents and other politicians begin or continue their terms during years ending in 5. The public might be unclear about their future policy directions, or weary of them by the years that end in 7.

Anyway, read the book to learn a boatload more about the author’s philosophy, his trials, tribulations and triumphs in the markets, his research results and comparisons between financial markets and: ecology, games and sports.

Americanized / The Dilbert Future – BONUS POST

[Please note: The word “Featured” on the left side above was NOT inserted by this blogger, but apparently was inserted by WordPress, and it cannot be removed. NO post in this blog is sponsored.]

The first Bonus Book of the Week is “Americanized, Rebel Without A Green Card” by Sara Saedi, originally published in 2018.

According to this slim volume (which appeared credible although it lacked Notes, Sources, References, or Bibliography and an index), the author’s family had a difficult time getting permission to live permanently in the United States, after fleeing the Iranian Revolution in the early 1980’s.

The author, born in 1980, provided a host of details on her family’s immigration ordeal, and her own life’s trials and tribulations (mostly First-World problems). Incidentally, she unwittingly wrote a line that would have subjected her to cancel-culture [In 1992]:

“…I’d personally reached peak frustration levels at our country’s complex and seemingly arbitrary immigration laws. I wanted to get on the first flight to Washington, DC, and storm the Capitol, but I didn’t, because any form of criminal activity would get me deported.”

Read the book to learn more.

The second Bonus Book of the Week is “The Dilbert Future, Thriving on Stupidity in the 21st Century” by Scott Adams, published in 1997.

The author discussed his predictions, obviously at the book’s writing. One of them was particularly accurate:

“As dense as they [the children] might be, they will eventually notice that adults have spent all the money, spread disease, and turned the planet into a smoky, filthy ball of death. We’re raising an entire generation of dumb, pissed-off kids who know where the handguns are kept.”

(!!!)

Read the book to learn more of the author’s insights.

Flying Close to the Sun

The Book of the Week is “Flying Close to the Sun” by Cathy Wilkerson, published in 2007.

Born in January 1945 in Hartsdale, a northern suburb of New York City, the author spent most of her childhood in Connecticut. At a young age, she was drawn to politics. At Swarthmore College, she joined the group, Students for a Democratic Society (SDS), and engaged in political activism for decades. Many young people were brainwashed into thinking that the revolutions in China, Vietnam and Cuba had been successful in creating a societal paradise.

In turbulent 1960’s America, the counter-cultural attitude was:

“If corporations were stealing from us and selling us products that killed, then we too could steal from them and support the movement.”

As is well known, during the Vietnam War, more than a few American companies were cooperating with the U.S. government to supply the U.S. military with napalm and agent orange, two chemicals toxic to vegetation as well as humans.

In June 1969, SDS held a convention for its chapters across the country. However, there was lots of infighting over ideology and the direction of the movement. Later that month, a few SDS members wrote a paper that said that the United States government should be overthrown because it was imperialist, and oppressed blacks and the poor. The plan was that the revolutionaries would impose Marxist-Leninist socialism so that Americans in the new world order could live happily ever after.

The paper inspired some SDS members, including Wilkerson, to form a new group which called itself the Weatherman. She began to think that the only way to change the world was through revolution. Weatherman started to provoke the local Chicago police the way the Black Panthers had been doing. The former became very focused on the Black Power movement, at the expense of the women’s movement.

Wilkerson gave talks that advocated working with women of all ages around issues of domestic violence and workplace harassment. She was bullied at a self-criticism meeting about not being more against racism. She was told she was being selfish; that blacks were being treated worse than women. SDS leaders said that’s why blacks deserved more attention. The group should focus on the blacks and when they achieved equality, then women’s equality would follow.

In summer 1969 in Columbus, Ohio, two dozen SDSers recruited high schoolers in their hangouts such as streets, beaches, bars, etc. In three not-so-great neighborhoods, they incited blacks to riot and commit violence against the police. Unsurprisingly, the mayor called in the National Guard.

That same summer, SDS member Mike Klonsky resigned. He had realized that violence was a childish way to resolve conflicts, and suggested that instead, people work through their anger about injustice by pressuring politicians to combat racism, and raise awareness in workplaces.

The late 1960’s and early 1970’s saw incidents of unrest that scarred the American psyche; the most well-publicized included: Columbia University in spring 1968, the Democratic National Convention in Chicago in August 1968, San Francisco State College beginning in late 1968, and Kent State in Ohio in May 1970. Wilkerson and others in the “movement” thought that these incidents indicated that activists were catching on and making progress.

As a low-level member of Weatherman, Wilkerson lived in the collective, and did what they did. She learned martial arts, exercised, and discussed and argued for hours about the agenda of the organization. The collective voted to do away with monogamy, as that would allow full participation of all members. The group wanted to have a collective sense of humanity– it was bigger than oneself.

Read the book to learn of a game-changing event that occurred in March 1970 involving Wilkerson, that radically changed her group’s and her circumstances, and of much more about her life and times.

Quiet Strength – BONUS POST

The Bonus Book of the Week is “Quiet Strength, The Principles, Practices, & Priorities of A Winning Life” by Tony Dungy with Nathan Whitaker, published in 2007.

Born in 1954, Dungy grew up to become a professional football coach. In 1999, at an after-game press conference, he expressed his displeasure with the referees’ rulings and instant replays. He was fined by the then-NFL commissioner ten thousand dollars.

About four years later, and again, about six years later– an instant replay helped Dungy’s team win in the last play of the game. The way the former win occurred was unprecedented in that the team scored three touchdowns in the last four minutes of an away game on Monday night, against the latest Super Bowl winners, in his original hometown. On his birthday.

Dungy thought God had something to do with that. Read the book to learn much more about his religious bent, philosophy, and the different roles he played in his life, in addition to that of coach.