Victor Sperandeo is a visionary trader and financial commentator with over 45 incredibly successful years under his belt. Victor is known in financial circles as “Trader Vic” and is widely renowned for his proven track record in the trading field.
Not only has he been trading on his behalf, but he also handled investments of big names like George Soros and Leon Cooperman.
Victor Sperandeo made much of his money trading commodities, particularly in the metal and energy sectors. He shot to international fame by famously predicting the stock market crash of 1987.
Nowadays, he is based in Grapevine, Texas, and serves as the president of Alpha Financial Technologies, LLC.
Throughout his career, Sperandeo has maintained that investors should strive for objectivity and consistency within their trading choices.
Whether you are a stock market veteran or a newcomer, you can learn a lot from the life and career of Victor Sperandeo – particularly his uncanny ability to identify rising stock market trends and gauge potential risks.
This article will examine the biography and career of the legendary trader, investor, and financial commentator in detail.
Victor Sperandeo – Overview
- Name: Victor Sperandeo
- Gender: Male
- Date of birth: March 16, 1945
- Birthplace: Queens, New York
- Current residence: Grapevine, Texas
- Nationality: United States
- Occupation: Trader, index developer, financial commentator, best-selling author
- Famous for: Predicting Black Monday in 1987 and being an astute financial observer and trader
Victor Sperandeo’s Personal Life
Born in Queens, New York, Victor was always into taking risks and making money from an early age. According to an interview published in The New Market Wizards: Conversations with America’s Top Traders, Victor developed a keen passion for poker during his teen years.
He realized early on that winning in poker was all about managing odds. Although he did pretty well playing poker, he didn’t want to be a professional card player, and at the age of 20, he decided to dive into the New York job market.
A career in OTC trading caught his eye, and, thinking that his poker background might help him, he went for it. Later on, Victor admitted that the idea of pursuing a trading career was the best decision of his life.
Today, apart from being a successful trader and investor, Victor is also a popular public speaker and a best-selling author.
Victor Sperandeo’s Career
Victor started his trading career straight out of high school. His beginnings were far from the glamor of Wall Street. He began as a quote boy at Filer Schmidt & Co., earning minimum wage before moving on to a slightly better-paying position as a statistical clerk for Standard & Poor.
Sperandeo didn’t consider his work particularly exciting and is said to have had difficulty focusing on it. As a result, he was later on dismissed.
After this unsuccessful stint on Wall Street, seeking greater autonomy in trading decisions, Sperandeo found his true calling as a dealer in the over-the-counter (OTC) options market.
One of his bets proved hugely successful, as he earned $50,000 in commissions in just six months. High on confidence, Victor decided to launch his own firm in 1971.
After securing a partner, Victor Sperandeo launched Ragnar Options. The USP of the firm was that it was one of the first firms on Wall Street to offer guaranteed quotes on options without charging exorbitant premiums.
The strategy proved so successful that Ragnar became among the largest OTC option dealers in the world within six months of launch. After a while, the company merged operations with another Wall Street firm. Sperandeo then quit and joined Interstate Securities in 1978.
At Interstate, he was in charge of managing private accounts. Victor learned a lot on the job, but when Interstate went public in 1986, they decided to dissolve their trading group.
Starting His Own Money Management Firm
Fresh out of a job, Sperandeo traded his personal account for over a year before deciding to start his own money management firm, Rand Management Corporation.
The company stringed together eighteen consecutive winning years before registering its first loss in 1990.
Over the years, “Trader Vic” traded futures for some leading corporations, including EAM Group, HSBC Bank, and Nomura.
Currently, he serves as the CEO and President of Alpha Financial Technologies, LLC.
Victor was inducted into the Trader Hall of Fame by Trader Magazine in 2008.
Victor Sperandeo’s Net Worth
Not much is known about Victor Sperandeo’s net worth. However, when the DJIA fell by over 20% during the 1987 crash, he is said to have made 300% returns during a single day by shorting the Dow.
According to some estimates, Victor’s net worth is between $1 and $7 million.
Victor Sperandeo’s Trading Strategy
Victor is an astute financial observer who believes in following rules that take emotions away from your trading activity. He insists that all traders follow investment rules designed to make their trading choices as objective as possible.
In his best-selling book “Trader Vic – Methods of a Wall Street Master,” he notes that keeping your emotions in check when trading is necessary. He says avoiding rationalizing yourself into taking unwarranted risks or choosing a position too early or too late is crucial.
Sperandeo also insists that he abides by specific rules that can help investors gain solid returns and avoid mistakes, especially in the long haul.
Rule 1: Trade With a Plan
According to Victor, having a carefully-defined plan and sticking to it is crucial when trading stocks. He believes confusion is your biggest enemy since it can provoke an emotional response, thus hurting your performance.
Having a trading plan and sticking to it enables you to better navigate periods of high market volatility and protect you from taking high risks.
Rule 2: The Trend is Your Friend
Sperandeo highlights the importance of this rule and notes that, despite it, it is often ignored.
According to him, there are three trends in the stock market- the short-term, the intermediate-term, and the long-term. While short-term trends change rapidly, you should maintain sight of intermediate- and long-term trends.
He says an investor should know which trend he is involved in and its correlation with the other two.
Rule 3: Use Stop Loss
According to Sperandeo, it is tough for investors to identify the point when the market starts going against them. That is why many traders fail to close a trade on time, leading to significant losses.
One of the safest ways to avoid this is to put in a stop-loss order. According to Victor, once you open a position, you should immediately place a second order to close the position when the market turns against you and hits the predetermined stop-loss threshold.
Rule 4: When in Doubt, Get Out
Sperandeo says that every long position you hold should be a “buy today,” and every short position you hold should be a “sell today.”
Victor is a big proponent of having the odds in your favor. He says getting out of the market is better if the changing conditions pile the odds against you.
Rule 5: Never Overtrade
Sperandeo believes investors should be more patient in waiting for the right opportunities and act only when as many factors as possible are in their favor.
He says you should only trade once you feel familiar with the price action of your market and at your own pace. On the other hand, overtrading and going against your trading plan is a recipe for disaster.
Study Victor Sperandeo to Become a Better Trader
Victor Sperandeo is one of the legendary traders on Wall Street who believes in a conservative and responsible trading strategy.
He is known for his diligent market research and objective trading approach.
If you are a trader looking to make it big, studying Victor Sperandeo’s trading strategy and philosophy can help you gain insight into responsible trading and solid returns without taking unnecessary risks.
