Value, What A Concept!

value

by Steven Sarnoff

Just a week after running over Ford, Tesla today overtook General Motors for the number one spot among US automakers for market value based on stock market capitalization.  Tesla’s drive higher has sparked renewed debate about the concept of value.

Differing opinions make markets. The financial media features many Wall Street analysts flouting Tesla’s share price rise, calling the stock clearly overvalued. Elon Musk, Tesla’s chief executive officer, couldn’t resist schadenfreude by trolling and throwing shade at short sellers with his, “Stormy weather in Shortville…” tweet.

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The Role Of Luck

tumblingdice

by Steven Sarnoff

When people find out what I do for a living, they invariably ask what I think the market is going to do.  I politely tell them that if I knew what the market was going to do, I wouldn’t have to work.  If you ever encounter someone who claims to know what the market is going to do, zip your wallet.

In option trading and in life, luck plays a featured role.  We are practitioners of uncertainty. Somewhere back in the mid-1990’s I recall seeing Alec Baldwin interviewed on the show, Inside the Actor’s Studio. He was asked to describe what acting was like to him.  Baldwin answered that it was like repeatedly banging your head against a door and then, it’s all up to luck. Continue reading

My 9/11 Story

freedom_tower

by Steven Sarnoff

On Sunday, September 9, 2001 I told thousands of people to bet that American Airlines was going down.

And on this solemn day of remembrance, marking the 15th anniversary of the terror attacks, I recall my personal story from that tragic time to give you a smile as we move forward in life…

You know what happened on the ensuing Tuesday.  I really felt like a New Yorker that day.  Back in the eighties I worked in the World Trade Center, amid the open outcry bedlam of the gold and silver trading pits. Flashing forward, we had taken a family trip to NYC and brought our two wide-eyed young kids to the top of the Twin Towers in April of that fateful year.

When trading resumed I started receiving emails like “Dear Mr. Sarnoff, I made $250,000 in one day on your American Airlines recommendation, but my account in the Cayman Islands has been frozen by the government.  What should I do?  Please advise.  Many thanks,…”  You may picture me pushing my chair back from my desk and throwing my arms skyward in the international signal of surrender!

Then I saw Dan Rather on television reporting about how the terrorists were suspected of using the options market to profit from the 9/11 attacks.  I imagined my subscribers getting grilled by the FBI and testifying, “Sarnoff told me to do it!”  So I waited for my phone to ring. Continue reading