Clad in matching bright pink suits and armed with a piano, stock experts Victor Niederhoffer and Laurel Kenner addressed an audience of professionals and students yesterday.
Niederhoffer -- a hedge fund manager, venture capitalist and onetime world squash champion -- spoke on the truths and myths of stock speculation.
While her partner spoke, Kenner -- a financial writer and former editor at Bloomberg News, as well as a concert pianist -- underlined the lecture with piano tunes. She played classic American selections chosen to illuminate themes in the lecture.
Explaining the unorthodox presentation, Niederhoffer said, "Music brings out emotions and meanings you just can't get from words."
Unfortunately, many attendees found the background music distracting given Nieder- hoffer's low voice, and the crowd thinned out over the two-hour session. After a plea from the audience, Kenner ceased playing continuously.
Niederhoffer divided his lecture into the three main questions facing investors today: if they should buy stocks, which stocks to buy and when to buy them.
The bulk of the discussion, however, centered on defending his economic theories.
He spoke out against the commonplaces of the stock market as championed by celebrity investor Warren Buffett and Wharton professor Jeremy Siegel. Niederhoffer likened their practices to old-style con games of three-card monte.
Niederhoffer emphasized taking increased risk by investing in initial public offerings rather than simply in longstanding, "proven" companies, such as those in the tobacco and steel industries.
According to Niederhoffer, advocates of a more conservative approached had "brainwashed" today's business students with "flawed" assumptions. He acknowledged his reputation in the business community as the "amiable idiot" but cited the success of his Matador Fund as evidence to the contrary. The fund has been the top-ranked major hedge fund over the past three years.
He then proceeded to debunk what he sees as the 10 main myths of investing, emphasizing that "the thing about the markets is that you have to know what you don't know."
Niederhoffer also defended his long-term record and acknowledged his personal shortcomings. Recalling the 1997 crash of his hedge fund following excessive speculations in Thailand, he refused to comment on Asian markets, saying he had been "conned by Orientals."
He now concentrates on American stocks. Nevertheless, in recent years he has gained a personal following in Japan due to the success of his book and has appeared several times on Japanese public television.
Niederhoffer and Kenner's appearance was sponsored by the Wharton Undergraduate Finance Club.
