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By Root 6960 0

away as he talked. “I let down my friends. I lost my business. I was a major money manager. Now I pretty much have had to start from ground zero.” He paused. “Five years have passed. The beaver builds a dam. The river washes it away, so he tries to build a better foundation, and I think I have. But I’m always mindful of the possibility of more failures.” In the distance, there was a knock on the door. It was a man named Milton Bond, an artist who had come to present Niederhoffer with a painting he had done of Moby Dick ramming the Pequod. It was in the folk-art style that Niederhoffer likes so much, and he went to meet Bond in the foyer, kneeling down in front of the painting as Bond unwrapped it. Niederhoffer has other paintings of the Pequod in his house, and paintings of the Essex, the ship on which Melville’s story was based. In his office, on a prominent wall, is a painting of the Titanic. They were, he said, his way of staying humble. “One of the reasons I’ve paid lots of attention to the Essex is that it turns out that the captain of the Essex, as soon as he got back to Nantucket, was given another job,” Niederhoffer said. “They thought he did a good job in getting back after the ship was rammed. The captain was asked, ‘How could people give you another ship?’ And he said, ‘I guess on the theory that lightning doesn’t strike twice.’ It was a fairly random thing. But then he was given the other ship, and that one foundered, too. Got stuck in the ice. At that time, he was a lost man. He wouldn’t even let them save him. They had to forcibly remove him from the ship. He spent the rest of his life as a janitor in Nantucket. He became what on Wall Street they call a ghost.” Niederhoffer was back in his study now, his lanky body stretched out, his feet up on the table, his eyes a little rheumy. “You see? I can’t afford to fail a second time. Then I’ll be a total washout. That’s the significance of the Pequod.”

A month or so before Niederhoffer blew up, Taleb had dinner with him at a restaurant in Westport, and Niederhoffer told him that he had been selling naked puts. You can imagine the two of them across the table from each other, Niederhoffer explaining that his bet was an acceptable risk, that the odds of the market going down so heavily that he would be wiped out were minuscule, and Taleb listening and shaking his head, and thinking about black swans. “I was depressed when I left him,” Taleb said. “Here is a guy who goes out and hits a thousand backhands. He plays chess like his life depends on it. Here is a guy who, whatever he wants to do when he wakes up in the morning, he ends up doing better than anyone else. Whatever he wakes up in the morning and decides to do, he did better than anyone else. I was talking to my hero . . .” This was the reason Taleb didn’t want to be Niederhoffer when Niederhoffer was at his height — the reason he didn’t want the silver and the house and the tennis matches with George Soros. He could see all too clearly where it all might end up. In his mind’s eye, he could envision Niederhoffer borrowing money from his children, and selling off his silver, and talking in a hollow voice about letting down his friends, and Taleb did not know if he had the strength to live with that possibility. Unlike Niederhoffer, Taleb never thought he was invincible. You couldn’t if you had watched your homeland blow up, and had been the one person in a hundred thousand who gets throat cancer, and so for Taleb there was never any alternative to the painful process of insuring himself against catastrophe.

This kind of caution does not seem heroic, of course. It seems like the joyless prudence of the accountant and the Sunday school teacher. The truth is that we are drawn to the Niederhoffers of this world because we are all, at heart, like Niederhoffer: we associate the willingness to risk great failure — and the ability to climb back from catastrophe — with courage. But in this we are wrong. That is the lesson of Taleb and Niederhoffer, and also the lesson of our volatile times. There is more courage and