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official stupid quote of the day/month/year thread


given2invest
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On Citi's reverse split today:

 

http://news.yahoo.com/s/nm/20110509/bs_nm/us_citigroup_shares

 

"Why would anybody own Citigroup when they can own JPMorgan for the same share price?" said Mark Sebastian, chief operating officer of Option Pit Mentoring, an options education firm in Chicago.

"JPMorgan is a much better company. Now there is actual price risk for the stock when it wasn't at $4.50."

 

He is COO of a company that specializes in options EDUCATION.  DOH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

For those of you new to the business/industry, a reverse split (or a regular split) does not change the value of a company nor does Citigroup now have "price risk" when before it didn't.  Further, Citigroup and JP Morgan are not the same "price".  Market cap is decided by shares outstanding X current price.  The actual "price" is completely irrelevant. 

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This is a difficult concept for alot of people. All my friends always ask me how much the stock is when i tell them about ideas. They then tell me that at $60 the stock is a bit expensive. Its a tough one  ;)

 

Also after a split, a few guys are always like so by year end it will be right back to where it was ....

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Guest VAL9000

I think the authors are really to blame here.  This is the best quote they could include to support their thesis that the 10:1 reverse split is a bust for Citi?  They actually published this quote and put their name on it? Shameful really.

 

Check out their insight on the volume metrics:

The reverse split sapped demand among retail traders attracted by Citi's previously low price. More than 49 million shares traded in Citigroup on Monday, down sharply from the average above 412 million shares traded daily over the past 50 days.

 

a) That's not an apples to apples comparison of volume, $volume should be used in the case of a split.

b) If you used $volume, you'd come to the opposite conclusion.  That is, volume increased.

 

Tsk, tsk.  Well, as Warren says, let blockhead read what blockheads wrote.

 

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I think the authors are really to blame here.  This is the best quote they could include to support their thesis that the 10:1 reverse split is a bust for Citi?  They actually published this quote and put their name on it? Shameful really.

 

Check out their insight on the volume metrics:

The reverse split sapped demand among retail traders attracted by Citi's previously low price. More than 49 million shares traded in Citigroup on Monday, down sharply from the average above 412 million shares traded daily over the past 50 days.

 

a) That's not an apples to apples comparison of volume, $volume should be used in the case of a split.

b) If you used $volume, you'd come to the opposite conclusion.  That is, volume increased.

 

Tsk, tsk.  Well, as Warren says, let blockhead read what blockheads wrote.

 

 

I completely agree.  Except the authors are low paid workers from Reuters and I see that kind of stuff all the time from them.  This guy is:

 

Mark Sebastian is a former market maker on both the Chicago Board Options Exchange and the American Stock Exchange. He started the popular blog Option911, which is now the Option Pit blog.  Sebastian has been published in  nationally on Yahoo Finance, quoted in the Wall Street Journal is a featured contributor for  TheStreet.com.  He also writes regularly for SFO, and OptionsZone, and is the managing  editor for Expiring Monthly: The Option Traders Journal.  Mark has a Bachelor’s in Science from Villanova University.

 

His sole job is educating people on options! 

 

 

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Guest VAL9000

I completely agree.  Except the authors are low paid workers from Reuters and I see that kind of stuff all the time from them.

...

His sole job is educating people on options!   

 

I hope to hell that he's low paid, too, otherwise his customers are getting fleeced. :)

 

Note to self: stop reading Reuters.

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Just blows my mind to read that quote. Guess this guy wouldn't be buying FFH any time soon with a share price around $400, be way too expensive.

Do you suppose he woke up this morning and said "What was I thinking?"

 

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Wow.

 

He sounds like he'd be a good interview for CNBC. He's right in line with a lot of the moronic analysts they have on there who start their own investment company, give themselves a ridiculous title like 'Senior Chief Executive Dynamic Strategist of Synergistic Global Markets' and then spend 90% of their time promoting themselves on TV rather than actually investing.

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