"The markets provide a certain level of novelty and demand a certain level of attention and creativity that very few jobs do." - Roy Niederhoffer (Tweet)
In This Episode, You'll Learn:
- What has changed by the fact that more and more trading decisions are made by computers instead of humans.
- The issue of model decay in Roy’s field.
"The numbers suggest that we have not had any decay in our algorithms in fact we think we’ve improved it over time." - Roy Niederhoffer (Tweet)
- Why he has constructed his trading program the way that he has.
"We are trying to do a lot of different things, to have them be as different as possible, and to allow them to operate in harmony with each other." - Roy Niederhoffer (Tweet)
- His ten-step process from idea generation to putting it into the system. The research process laid out.
- How his firm does research.
"As a short term trader we are focused on our opportunity set divided by our trading cost." - Roy Niederhoffer (Tweet)
- How position sizing plays a role in the short term space.
- How he keeps model slippage to a minimum.
- Risk management and how Roy deals with it.
- When to use discretion to reduce risk.
- What he learns from going through a drawdown.
"We’ve had some drawdowns; every one of them has resulted in a far stronger program than we had before." - Roy Niederhoffer (Tweet)
- How he keeps investors in the firm during a tough time.
- How he personally deals with drawdowns.
- How he measures the effectiveness of his research.
"To think that the smart pieces of your portfolio are only the things that are going up is naive." - Roy Niederhoffer (Tweet)
- If his risk tolerance went down once he had more money under management.
- What the biggest challenge is for Roy in the short term management space.
- What investors are not asking him during due diligence.
- What makes him go into work everyday.
- Books that Roy recommends reading for managers and investors.
- How the office environment affects how investors perceive a firm.
- About downside protection and negative correlation.
Resources & Links Mentioned in this Episode:
- Roy mentions the Extraordinary Popular Delusions and the Madness of Crowds.
- He recommends Reminiscences of a Stock Operator.
- Roy highly recommends Thinking, Fast and Slow.
"It has very little to do about trading, but a lot to do about the brain and how people think." - Roy Niederhoffer (Tweet)
This episode was sponsored by Swiss Financial Services:
Connect with R. G. Niederhoffer Capital Management:
Visit the Website: www.Niederhoffer.com
Call R.G. Niederhoffer Capital Management: +1 212-245-0400
E-Mail R.G. Niederhoffer Capital Management: firstname.lastname@example.org
Follow Roy Niederhoffer on Linkedin
"Having a certain humility as to what is going to work versus what has worked in the past is very good portfolio wisdom." - Roy Niederhoffer (Tweet)