Blast from the past – Victor Niederhoffer

by admin on January 9, 2013

Maybe it is the current popularity of discussing the yen, maybe because I am in Thailand, but I just remembered this rare interview with Victor Niederhoffer. A big success for 20 years went bang in one day in October 1997 (and then again ten years later). This is a rare interview showing what someone who just lost a lot of money looks like at home, has some juicy details on what speculators do (he describes one trade in detail), but also has interesting bits about his relationship with George Soros.  This is more car-crash entertainment than education, not least for people like me who can’t figure out how you can press buttons, let alone make decisions, so quickly. But the guy was great mates with Soros for years, so well worth watching in my opinion.

You can understand all of the important parts by listening to the English. You can find the English by fast-forwarding until you see a white face. The best bits are in the middle/second half.

The first two parts give some background, so I wrote out what they are saying:



Bangkok – The Thai economy, which was called the Asian miracle, went bust a year ago. Speculators with a lot of funds rapidly dumped the Baht, and, after getting their massive profits, pulled all their money out of Thailand. The impact spread all over Asia, and about 30 M people lost their jobs.

New York – The money that left went to different investments around the world.

The New York stock market, which had been going up for a few years, started getting turbulent in late October last year. Then, on October 27, stocks started continually dropping from the morning. Nobody knew where they would stop. At 2:35pm, the exchange was temporarily suspended.  When it was reopened, shares continued to fall, and the exchange was closed 30 min early.


During the big share price drop following Black Monday in 1997, one speculator was reported to have gone bankrupt.


Title: The money revolution

The man who lost 5 billion yen in a day

This is the mansion of Victor Niederhoffer in a forest next to a beautiful lake in Connecticut, north of New York. What kind of person was Victor Niederhoffer, who lost 5 billion yen in one day? What kind of life does he have, and what is he thinking about in this mansion? And, most importantly, why did he lose the huge amount of 5 billion yen?

We started getting contact with him in April.  The trees leading up to his house from the gate still look like it was winter.

This was their last visit after they were refused one on the telephone. (Basically, they were refused but went anyway – the gate was opened by Niederhoffer’s kid – otherwise they would not have gotten in – pretty interesting. They were the only journalists to interview him.)

[Two guys talking crap, like “woah, so you mean these guys are just making money using money?”]

Niederhoffer let us in and made us wait. There’s loads of paintings on the wall. (Explaining stuff you can see on camera – kid, dog, family). Waited an hour for a chess game to finish.


New York – This is a posh auction house.



Part of VN’s high quality silver collection was on display. 104 piece. $0.73M expected sale value (really? Seems low). This is the best piece – 17th century, Dutch, real nice, pricey.

(Useless chat)

This is where he had his collection.

[From about 2:30 – bunch of unnecessary chit-chat about speculators losing money]


Joplin and Martin Neiderhoffer (granddad) published the music manuscript to this tune. It was really successful. His granddad came to the US in 1899 from Germany. Jewish immigrant.  One of seven kids. Went to uni. Invested all his money in the stock market.



Victor’s granddad was born here. This is where the Neiderhoffer family lived. Three generations. Cramped.

Photo – VN left.

VN’s father, Author, was different. Serious policeman, had fun interests, became a prof. of criminology.

Author did a lot of stuff, was hero to VN.


Father was the influence that led him to take up squash and tennis. [VN won the U.S. Nationals five times]

One of the most important things he learned from his father was remembering how the ball moves, and predicting where it would go.

These are 35 years of VN’s notes on speculating.

This is the application of his father’s prediction of where the ball flies in the market. Handmade database from times when there were no computers. He used this to understand the market and make lots of money.


He graduated in economics, then went to Chicago. He was very influenced by the idea that you can make 20% per year in the stock market.













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