Nov21

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Victor Sperandeo spent his teenage life playing poker in his neighbourhood in Queens.

His fascination with numbers led him to Wall Street where he worked as an options trader before establishing Rand Management Firm and Ragnar Option Corporation.

Within 6 months Ragnar was doing more volume than any other OTC options firm in the world.

As well as trading independently Victor also traded on behalf of other legendary names such as George Soros and Leon Cooperman.

But even legends make mishaps and in 1984 Victor deviated from his own money management guidelines.

He was short the market and did not cover, the next day the market opened higher.

It cost him a million dollars.

In Victor’s mind ‘The key to trading success is the emotional discipline.’  His three principles in the market are preservation of capital, consistency, and speculation with profits.

In 1987 Victor famously predicted the market crash in Barron’s magazine a few weeks prior, which earned him the title Trader Vic the Ultimate Wall Street Pro.  He saw the bubble and he got out early.

He talks about another winning trade when he heard a ringing of the bell and went long the world.

If You Only Look At One Chart…

Time is short, so here is one chart to get you thinking in a new direction.

Source: Bloomberg

  • Global central banks just can’t stop printing money. (CBTOTL is a custom index of the FED, ECB, PBOC, BOE, and BOJ.)
  • The Fed’s balance sheet stopped expanding in 2014, and there was a rough patch until a combination of a softer USD, combined with other central bank QE, drove risk assets higher.
  • The S&P 500 has risen from sub-1000 in the crisis all the way to 2500+ today, riding a wave of unprecedented liquidity.
  • With the Fed targeting tapering and the ECB slowing its QE, will the wave break?

This is part one of our interview with Wall Street Legend Trader Vic.

 

Get the Lesson from the Loss – Louise Bedford

Even market legends like Victor Sperandeo makes losses in the markets.

Have you made a loss in the market and you are looking to retrieve the lesson? 

Here are some things you need to do to pay it forward:

Be careful of personalisation, pervasiveness and permanence.

The way you do one thing is the way you do everything. Improve your self-talk and you will improve your performance in the markets.