Practical Speculation

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John Wiley & Sons, Mar 10, 2003 - Business & Economics - 388 pages
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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.


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Ein ganz dummes, übles Machwerk. Ohne jeden praktischen Nutzen und dominiert von einer Mischung aus unerträglicher Selbstverliebtheit, verletzter Eitelkeit und Selbstmitleid.
Niederhoffer, der
Oberaufräumer. Und womit räumt er nicht alles auf: technische Analyse, Trend following, Warren Buffett, Benjamin Graham, etc etc. Alles Idioten, deren Erfolge auf Zufall beruhen.
Man sollte meinen, wer selbst schon mal so richtig mit Schmackes vor die Wand gefahren ist, ist mit seinen Aussagen ein wenig vorsichtiger. Nichts da! Man hat schließlich recht. Immer und überall! Und man kann es auch statistisch beweisen.
Kurz, es ist ein Investment-Antibuch. Wer so rechthaberisch an die Märkte geht, wird ganz bestimmt verlieren. Garantiert!


Part One Mumbo Jumbo and Moonshine
Part Two Practical Speculation

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Page ii - France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills ; we shall never surrender.

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About the author (2003)

VICTOR NIEDERHOFFER's storied career as a speculator spans more than twenty-five years. He began speculating in commodities in the 1970s, and through 1997 held one of the most successful track records of any hedge fund manager. He currently manages money for overseas clients and trades for his own account. Niederhoffer is the author of the critically acclaimed and bestselling Education of a Speculator, and has written numerous articles for scholarly and professional publications including the Financial Analysts Journal. A magna cum laude graduate of Harvard (1964) and the University of Chicago (PhD 1969), Victor taught finance at Berkley and founded Niederhoffer, Cross & Zeckhauser, a mergers and acquisitions firm that was a leader in the field for many years. During the 1970s he dominated the squash world, claiming the world title in 1976. He currently writes a weekly column for CNBC Money with Laurel Kenner.

LAUREL KENNER is a financial writer. Her columns on the stock market, co-written with Victor Niederhoffer, have appeared on CNBC Money,, and Her journalism career includes five years as chief U.S. stocks editor at Bloomberg News and five years as an award-winning aerospace reporter for Copley Newspapers. She holds a degree in classical piano from the University of California at Los Angeles.

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