Roy Niederhoffer: One Million Trades, Zero Regrets

Published on
December 22nd, 2020
Duration
100 minutes

Stephen Clapham on IPO Bubbles, Earnings Manipulation, and Balance Sheet Jiggery-Pokery


Roy Niederhoffer: One Million Trades, Zero Regrets

The Interview ·
Featuring Roy Niederhoffer and Jason Buck

Published on: December 22nd, 2020 • Duration: 100 minutes

Roy Niederhoffer, president of R. G. Niederhoffer Capital Management, joins Jason Buck of The Mutiny Fund to share the lessons Niederhoffer learned during his fruitful career as a systematic trader and portfolio manager. Niederhoffer tells Buck about his journey from being a high school entrepreneur to a trader at his brother's firm to then developing his own systematic trading algorithms and ultimately starting his own firm, R. G. Niederhoffer. Using vivid examples from financial crises such as "Black Monday" in 1987, 9/11, and the 2008 Great Financial Crisis, Niederhoffer discusses the advantages of systematic trading as a way to avoid behavioral traps that humans fall into. Niederhoffer provides insights on the nuances of risk parity, particularly the waning correlation between stocks and bonds, before sharing with Buck his views on monetary debasement, inflation, and Bitcoin. Filmed on December 15, 2020. Key Learnings: Negatively correlated assets are crucial to hold as they reduce volatility within a portfolio. Systematic trading (as opposed to discretionary trading) is an effective way to exploit emotional foibles of other market participants and not fall victim to your own. The negative correlations between stocks and bond prices is not an unmoving axiom of financial law, but rather a feature of the last four decades which may no longer be true.

Comments

Transcript

  • AH
    Andreas H.
    11 January 2021 @ 19:33
    :-)))
  • TW
    Troy W.
    4 January 2021 @ 07:12
    Just great perspectives, Thanks!
  • PJ
    Patrick J.
    31 December 2020 @ 04:13
    The fund mentioned at 58:00 "three initials in their name", = TGS Management?
  • SS
    Shanthi S.
    30 December 2020 @ 20:11
    So good!!! Thank you both.
  • JG
    Jesse G.
    30 December 2020 @ 18:37
    would have like to see some specific examples of structures as well.
  • RM
    Robert M.
    30 December 2020 @ 01:06
    Awesome interview. Not much else to say.
  • AL
    Ashraf L. | Contributor
    24 December 2020 @ 22:36
    Whatever happened to Roy's brother -- the one and only Victor Niederhoffer ? Should get an interview with him.
    • PP
      Peter P.
      25 December 2020 @ 00:50
      Victor recently started sharing wisdom via YouTube -> https://www.youtube.com/watch?v=hXar97mjrLE
    • JE
      John E.
      30 December 2020 @ 00:33
      read his book.....
  • RG
    Rob G.
    29 December 2020 @ 07:01
    Best interview I've seen in 2020. Validates the project I've been working on for 18 months
  • JD
    John D.
    27 December 2020 @ 07:29
    Phenomenal Interview !!!
  • IW
    Ian W.
    26 December 2020 @ 15:09
    Wow... Amazing interview as always, Jason. I loved the broad ranging conversation and had to pause and rewind several times. Such a dense (in a good way) interview :)
  • WS
    Whduc S.
    25 December 2020 @ 11:11
    With all due respect Roy’s funds look much more like leveraged carry than negatively correlated to mkt...
  • DS
    David S.
    24 December 2020 @ 21:27
    The acceptance that the "future" is a projection without any basis in fact is difficult for us to believe. The future has no ontological existence. One can assign probabilities without the comfort of cause and effect. Once accepted axiomaticly one can easily see that there is no cause and effect in trend following. Just a psychological connection- Hume - that the trend may continue. This axiom helps us apply a probability to the trend to keep us on our toes. This also helps us to be skeptical - Hume - of anyone who knows the future. DLS
    • DS
      David S.
      25 December 2020 @ 02:01
      As a simple corollary, time does not exist. Time is a structure we mentality impose on our world in order to make sense of our everyday lives - Kant. This may seem way out there, but it allows a much better view of the world and markets. DLS
  • AA
    Alberto A.
    24 December 2020 @ 15:51
    Fantastic! This is a gem...great insights and super valuable lessons from Roy....and Jack always asking the right questions and adding value to the interviewers response...this is high quality RV content! thanks
  • BD
    Ben D.
    24 December 2020 @ 03:15
    First saw Jason on the Acquirors multiple podcast and now to have him interview Roy is a great gift. I thank Both Jason and Roy for coming onto Real Vision and hope that they both make appearances in the future.
    • JB
      Jason B. | Contributor
      24 December 2020 @ 13:45
      Thanks Ben, I hope it came across how excited I was to introduce the RV audience to Roy
  • DG
    David G.
    24 December 2020 @ 06:35
    Jason Buck interviews are so inciteful.
    • JB
      Jason B. | Contributor
      24 December 2020 @ 13:43
      Thanks David!
  • GH
    Galen H.
    24 December 2020 @ 08:34
    Best RV interview I've seen in a while. A lot of, I think, timeless takeaways.
  • IM
    Indranath M.
    23 December 2020 @ 20:38
    Awesome discussion, lot to gather from this. Jason is a great interviewer - you got me at "epistemic humility"! One suggestion about the title of this video. It should have "neuroscience" in it - i am sure it will get a lot more views, like it deserves.
  • MO
    Master O.
    23 December 2020 @ 16:35
    Jason can you please bring in Nassim Taleb and Mark Spitznagel for an Interview?
    • JF
      Jack F. | Real Vision
      23 December 2020 @ 17:02
      We are working on it
  • EJ
    Edward J.
    23 December 2020 @ 16:55
    Great interview - actually one of the best for me. I actually met Roy back in 1992 amongst the chess boards and modern art in his brother's offices in midtown - he was a pretty intense guy back then, super focused on honing his craft. It's just fantastic to see him interviewed all these years later and hearing about all he's achieved.
  • PR
    Peter R.
    23 December 2020 @ 01:24
    This was old school RV at it’s best. I think with the efforts to push out more content, more and more is taking on the CNBC/Bloomberg fell, but every so often there is something like this. Roy’s unique perspective was presented in a deeply thoughtful and nuanced way. Jason does an outstanding job of leading the conversation to get to the appropriate depth. I wish there was a way to sort for “this type” of content on the platform.
    • DW
      Denton W.
      23 December 2020 @ 03:34
      Completely agree. Still a great product but Raoul and company need to go back to their roots. I hope they return to filming in-person interviews instead of zoom content once the pandemic is over, as I believe this will lead to better content. But I fear that they won't.
    • MO
      Master O.
      23 December 2020 @ 16:34
      Thank you for mentioning this. I have commented on this issue of more videos on "the exchange" about putting more content for the sake of more production without adding any real value. RV was much better when Grant Williams was at RV.
  • BH
    Benji H.
    23 December 2020 @ 00:30
    I wish there was a way to downvote the person that downvoted this.
    • GM
      Giles M.
      23 December 2020 @ 00:55
      Totally agree.
    • DS
      David S.
      23 December 2020 @ 16:23
      Benji H. - Thanks. Your comment did the job plus all the up votes. DLS
  • DW
    Daniel W.
    23 December 2020 @ 11:46
    Incredible interview!
  • JJ
    Jay J.
    23 December 2020 @ 11:04
    Awesome interview, hope to hear more from Roy in the future
  • VP
    Veselin P.
    22 December 2020 @ 22:53
    Wow, amazing content! Whoever chose the title needs to do an internship at a clickbait shop to learn how to make sure viewers don't miss valuable content. Almost skipped over this one
    • JF
      Jack F. | Real Vision
      23 December 2020 @ 01:17
      Hi Vesselin, your wish is our command. We have changed the title to something that should be more exciting!
    • VP
      Veselin P.
      23 December 2020 @ 09:44
      Say one thing about RealVision, say they take customer feedback seriously
  • DA
    David A.
    23 December 2020 @ 07:55
    The best Real Vision interviews are where the guests talk about what they have learnt rather than what they think. All the more so where the guest has such an inquiring mind and has had such a rich journey. This was really excellent.
  • DY
    Dmytro Y.
    23 December 2020 @ 04:28
    I read a book some time ago called 'Education of a Speculator' by Victor Niederhoffer. Was this Roys brother? Roy reminds me of the rich nuance in the book.
    • MG
      Michael G. | Contributor
      23 December 2020 @ 05:12
      Yes, it’s Roy’s older brother. Victor largely raised Roy after father died. Both excellent people.
  • GM
    Giles M.
    23 December 2020 @ 00:54
    Wow! I'd heard of Victor but never Roy (even after 30 years in investment management)......what a great interview, one of the best I've viewed on RV. I re-wound this one more than any other. So much to internalize. Thanks RV, there's nowhere else that this content is available.
    • GM
      Giles M.
      23 December 2020 @ 00:58
      BTW, Jason did a great job too;very calm and collected.
    • JB
      Jason B. | Contributor
      23 December 2020 @ 01:26
      Thanks Giles 🙏
  • GW
    Greg W.
    22 December 2020 @ 22:32
    One of the best interviews on RV. Huge thanks!!
  • CW
    Claude W.
    22 December 2020 @ 20:53
    Great interview. Congrats Jason and what nice and humble guys Roy NIederhoffer is!
  • HB
    Heini B.
    22 December 2020 @ 20:41
    Roy is one of the biggest hedge fund legends, not to have already been on Real Vision. One of the smartest and most likeable managers I ever met.
  • AS
    Atul S.
    22 December 2020 @ 20:09
    More of this please!
  • DS
    David S.
    22 December 2020 @ 19:52
    Excellent dialog confirming market and life lessons. DLS
  • AF
    Alex F.
    22 December 2020 @ 19:38
    Great Interview! Having spoken about Joseph and his storage of grains brings me to the Joseph cycle, which could be in summer or October 21 or in 2022. But then I know nothing and time will tell.
  • DD
    Dmitry D.
    22 December 2020 @ 19:23
    Exceptional! Neither the title, nor the description really do the interview justice, but then again, there is simply too much packed into it to condense into a few sentences. Jason has delivered some of the best, most memorable interviews of 2020 surely.
    • JB
      Jason B. | Contributor
      22 December 2020 @ 19:27
      Thanks Dmitry, I’m just riding the resurgent wave of Long Vol in 2020...
  • MC
    Mark C.
    22 December 2020 @ 18:39
    Wow. I absolutely loved this and have a learning/ study list. The story at the end was great. Thank you.
  • JP
    John P.
    22 December 2020 @ 18:08
    Very interesting interview. Also, great questions by Jason. Well done! Keep coming back with smart interviews.
    • JB
      Jason B. | Contributor
      22 December 2020 @ 18:13
      Thanks John...it was all Roy!
  • HK
    Hari K. | Contributor
    22 December 2020 @ 17:02
    Top notch, with a nice narrative thread.
  • JF
    Jack F. | Real Vision
    22 December 2020 @ 13:29
    *first comment* one of my favorite interviews of all-time. Mr. Niederhoffer was an early pioneer of systematic trading, and it's great to see behind the curtain into how one of the world's most successful traders thinks. In particular, I think Jason did an excellent job conducting this interview. I used to think of Jason as a "rising star" on RV, but, I think with this interview, it is fair to say that Jason has "arrived."
    • JB
      Jason B. | Contributor
      22 December 2020 @ 13:40
      Jack, you are far too kind, thanks!