Practical Speculation

The follow-up to Victor Niederhoffer's critically and commercially acclaimed book The Education of a Speculator has finally arrived. Practical Speculation continues the story of a true market legend who ran a hugely successful futures trading firm that had annual returns of over thirty percent until unforeseen losses forced him to close operations. Like a phoenix rising from the ashes, Niederhoffer returned to the world of trading stocks, futures, and options, with a new colleague and a new approach and found success. Order your copy of this compelling story of risk and survival today.;Practical Speculation; Acknowledgments; Contents; Introduction; Part One: Mumbo Jumbo and Moonshine; 1 The Meme; 2 Earnings Propaganda; 3 The Hydra Heads of Technical Analysis; 4 The Cult of the Bear; 5 "We Are Number One" Usually Means "Not Much Longer"; 6 Benjamin Graham: Mythical Market Hero; 7 News Flash: Computer Writes Stock Market Story!; Part Two: Practical Speculation; 8 How to Avoid Spurious Correlations; 9 The Future of Returns; 10 The Periodic Table of Investing; 11 When They Swing for the Fences, We Run for the Exits; 12 Boom or Bust?; 13 Market Thermodynamics.

In investing as in life, it’s not whether you get knocked down–because eventually you will–it’s whether you rise from defeat. Risk of success and failure is simply part of the human experience and is magnified in the financial markets, where speculation–the act of assuming a business risk–rules.

In the follow-up to the critically acclaimed, bestselling investment classic Education of a Speculator, market veteran Victor Niederhoffer, joined by CNBC Money co-columnist Laurel Kenner, shares his comeback experience from the firing line. By examining the remedial lessons of defeat, they show that it is possible to climb the stairway to success–even under abysmal market conditions.

In Practical Speculation, Niederhoffer and Kenner explore the backdrop of myth, misinformation, and propaganda that bombards investors daily through every media channel. Superstitions, backward looking observations, and out and out old wives tales are exposed. Then, after debunking market fallacies, they provide the antidote to manipulation–the scientific method–a testing that verifies the probabilities of obtaining practical profits. Niederhoffer and Kenner uncover and test tradable ideas so you can become a more independent and successful investor.

Comprising two equally informative parts, Practical Speculation strikes a perfect balance between the need to understand market myths and how they are propagated and testable, tradable strategies for speculators. The first part, "Mumbo Jumbo and Moonshine," dissects the common errors, fictions, fallacies, and propaganda that may induce you to "lean the wrong way" and lose money to market players such as brokers, specialists, analysts, and investment bankers. Niederhoffer and Kenner clearly describe what’s wrong with most approaches to investing. They debunk the myths and propaganda surrounding the earnings-return relationship and technical analysis; present a case study of chronic negativism, which can be just as harmful as overly bullish propaganda, through an interview with financial journalist Alan Abelson; deflate the ballyhoo about value stocks and its underlying philosophy by confronting financial legend

Benjamin Graham; run the media’s market coverage under a whole-body scan; and quantify the effects of hubris and humility on individual stocks.

After tearing down the barriers to profitable investing in Part One, Niederhoffer and Kenner outline a constructive series of approaches in Part Two of Practical Speculation that will serve as a solid foundation for making rational decisions about the markets. In-depth insight and expert advice guide you every step of the way. You’ll learn how to survive and thrive in the markets by setting up a defend/attack game plan; avoiding false correlations; utilizing market thermodynamics to make predictions; negotiating an edge when trading; and profit from studying the patterns linking real estate and business cycles. With additional discussion about the story of Value Line and the biotechnology revolution, Practical Speculation skillfully bridges the gap between theory and practice.

In the quest for investment success, there are no shortcuts. Practical Speculation gets to the heart of wealth creation by providing honest, accurate advice and everlasting techniques that will enable you to confidently make independent decisions about your investments.

"In Practical Speculation, Victor Niederhoffer and Laurel Kenner explore the backdrop of myth, misinformation, and propaganda that bombards investors daily through every media channel. Superstitions, backward looking observations, and out and out old wives tales are exposed. Then, after debunking market fallacies, they provide the antidote to manipulation - the scientific method - a testing that verifies the probabilities of obtaining practical profits. Niederhoffer and Kenner uncover and test tradable ideas so you can become a more independent and successful investor." "After tearing down the barriers to profitable investing in Part One, Niederhoffer and Kenner outline a constructive series of approaches in Part Two of Practical Speculation that will serve as a solid foundation for making rational decisions about the markets. In-depth insight and expert advice guide you every step of the way. You'll learn how to survive and thrive in the markets by setting up a defend/attack game plan; avoiding false correlations; utilizing market thermodynamics to make predictions; negotiating an edge when trading; and profit from studying the patterns linking real estate and business cycles. With additional discussion about the story of Value Line and the biotechnology revolution, Practical Speculation skillfully bridges the gap between theory and practice." "In the quest for investment success, there are no shortcuts. Practical Speculation gets to the heart of wealth creation by providing honest, accurate advice and everlasting techniques that will enable you to confidently make independent decisions about your investments."--Jacket Victor Niederhoffer's storied career as a speculator spans more than twenty-five years. In the introduction to Practical Speculation, Vic describes the rollercoaster his hedge fund rode from No. 1 in 1996 to the debacle in 1997 that forced him to close his fund. Rather than giving up, he wrote this book "figuring that by trying to teach others, I might learn something myself," apparently with some success. Niederhoffer was ranked No. 6 for the year 2003 among 200 managed futures hedge funds in the TASS database, and is No. 4 in the performance rankings through mid-2004. Niederhoffer is the author of the critically acclaimed Education of a Speculator as well as numerous groundbreaking academic articles about markets. A magna cum laude graduate of Harvard, he holds a doctorate in economics from the University of Chicago Graduate School of Business. He is a five-time national champion in squash and claimed the world title in 1976. Practical Speculation Acknowledgments Contents Introduction Part One: Mumbo Jumbo and Moonshine 1 The Meme 2 Earnings Propaganda 3 The Hydra Heads of Technical Analysis 4 The Cult of the Bear 5 "We Are Number One" Usually Means "Not Much Longer" 6 Benjamin Graham: Mythical Market Hero 7 News Flash: Computer Writes Stock Market Story! Part Two: Practical Speculation 8 How to Avoid Spurious Correlations 9 The Future of Returns 10 The Periodic Table of Investing 11 When They Swing for the Fences, We Run for the Exits 12 Boom or Bust? 13 Market Thermodynamics. 14 Practical Market Lessons from the Tennis Court15 The Fine Art of Bargaining for an Edge 16 An Amiable Idiot in the Biotechnology Revolution 17 Earnings Impostors 18 Finale Afterword Notes Index. The follow-up to Victor Niederhoffer's critically and commercially acclaimed book The Education of a Speculator has finally arrived. Practical Speculation continues the story of a true market legend who ran a hugely successful futures trading firm that had annual returns of over thirty percent until unforeseen losses forced him to close operations. Like a phoenix rising from the ashes, Niederhoffer returned to the world of trading stocks, futures, and options, with a new colleague and a new approach and found success. Order your copy of this compelling story of risk and survival today.