TTU45: How To Overcome Cognitive Bias in Investing & Trading ft. Roy Niederhoffer of R. G. Niederhoffer Capital Management – 1of2

Roy Niederhoffer has a fascinating live story that starts with Harvard and neuroscience and continues into his starting a hedge fund in the short-term trading space in 1993. Roy discusses the exciting and bootstrapping beginnings of his firm, the cognitive biases that keep most humans from making good investment decisions, and how his firm stands out from other CTAs. Investors and managers alike will learn a wealth of information from this episode.

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In This Episode, You’ll Learn:

• How Roy got interested in the financial markets from an interest in computers at a young age.
• How he started a company that had 30 employees by the end of his high school.
• How his brother was an early adopter in the Hedge Fund space.
• How he spent his undergraduate years studying neuroscience.
• Roy graduated from Harvard and was set to go to Cambridge for neuroscience until he worked for his brother for a summer.
• The story of how he started his firm and when he began trading in July 1993.
• How the human brain influences behavior and how that translates to trading.
• Cognitive biases and how to avoid them in the financial market.
• What Roy thinks of trend following and how to explain it to the public.
• The other investors he worked at in his first job out of college, that later became famous investors in their own right.
• Why Roy’s firm was “employing” a cook and a maid when they started the business in 1993.
• How he plays in a symphony and keeps up his pursuit of being a musician while running his firm at the same time.
• What he thinks about the future of the CTA industry.
• How his model works in an ecosystem of other portfolio management options.
• How they distinguish themselves from other CTAs.
• An overview of the strategies that his firm does today.
• How the infrastructure of the business is setup today and the unique opportunities of the short term space.
• What he looks for when adding people to his research team.
• The culture that he has created at the firm.
• What matters to him when investors look at the track record of his firm.

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Resources & Links Mentioned in this Episode:

• Learn more about Roy from his wikipedia article.
• Niels mentions that listeners should also check out the Top Traders Unplugged episodes with Kathryn Kaminsky.

Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.

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Send your questions to info@toptradersunplugged.com

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