From One Amateur…

Down is Up... by ~Dsva
Down is Up... by ~Dsva

I was the summer intern at Eaton Vance, in the Strategic Income Fund team a few summers ago. Taking my job very seriously, I did everything to make sure that my duties were carried out to absolute perfection with attention to every detail. After a few weeks, the team got used to having everything in order; and I realized that I had created a process where I could have a few hours free at the end of every day to ask questions, check the markets, read the hundreds of research papers that came to our group, and learn. I tried to learn as much as I could from this small group of very bright people who managed two mutual funds.

At the end of the summer, I received Victor Niederhoffer’s book The Education of  a Speculator as a farewell gift. In addition to all the wisdom in the book, there are a few notes inside the front cover and the farewell card.

“From one amateur speculator to another…”

“I’m sure you’ll succeed in your American adventure…”

“I hope you’ll know what Victor means – come back and visit when you’re rich…”

“I expect you to surpass the achievements of George Sorosanian without cutting corners like Michael Milkenian…”

“Just remember the market could go up or it could go down…”

Over the years, I have often remembered these last three parting wishes. I have not visited them yet and will probably not visit for quite some time. I’m still working on the achievements but having just read The Crisis & What to Do About It by George Soros, I have a long way to go. And there’s not a day (especially today) when I don’t remember the last reminder…


  1. The market can go up, it can go down, but as long as man has opinions, one can be assured that it will move.


  2. Jeff – One question I have not settled yet is about morality of taking part in a zero sum game where my gain is another’s loss. I am limiting myself to investing in the meantime. Any thoughts?

  3. As ridiculous as this sounds I actually struggled with this too , but in really thinking about it we have no way of knowing what the intention of the other side of our trade is. Some of those contracts on the other side could be going against you for pure speculation, some could be a hedge to another position the party has or maybe some could be a termination of a current position. We really have no way of knowing.

    Think about a guy making a market in options. You want to buy some calls; well this guy has too much long call exposure so he decides he wants to sell you those calls to offset some of his long deltas. He may lose on the trade but it was to offset some of the other risks in his portfolio. His overall position may still be profitable.

    Maybe I am rationalizing, but to me morality is a non-issue in the markets because we do not know and have no way of knowing the intentions of the other sides of our trades.

Leave a Reply

%d bloggers like this: