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Dumbest thing I've ever read in the WSJ

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July 03, 2008 – Comments (7)

Wow. In an otherwise OK piece, Brett Arends finishes up W-E-A-K.

I would rather buy the call options than the stock. If the worst comes to the worst, all you can lose is the 58 cents. If you own the stock, you can lose $4.57.

Brett Arends, I'm sure you didn't mean that. You can't have meant that. Or maybe you were drinking your July 4 beer a day early.

Drop by and tell us what's up.

7 Comments – Post Your Own

#1) On July 03, 2008 at 4:32 PM, FleaBagger (29.02) wrote:

I liked it; I thought it was funny. It was supposed to be funny, right?

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#2) On July 03, 2008 at 6:33 PM, russiangambit (29.27) wrote:

I normally would own the stock itself rather than calls. However, it might make sense for some extremly volotile stocks to own options instead. For example, airlines or financials.

Seriously, airlines lost 90% of their value this year and 50% of it in the last 3 weeks. Judging by the price, he was talking about airlines?

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#3) On July 03, 2008 at 6:35 PM, DemonDoug (71.43) wrote:

I'm confused seth - the statement seems to make sense to me.  I know trading options like that seems to be more of a trader type thing (in other words a trader wouldn't go long on a stock and ride it to zero).

So why is that statement weak?

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#4) On July 03, 2008 at 9:27 PM, TMFBent (99.81) wrote:

The way I cipher it out, losin' 100% of my investment means losin' 100% of my investment. Doesn't matter the size of the slices (if I paid 58 cents a stub or $4 a stub). But then, I was the art history major...

Besides, options only come in 100 packs. The minimum you can lose by losing 100% of those calls is $58 plus commission.

Buy a single share and you can lose $14... That makes the stock a much better deal!

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#5) On July 03, 2008 at 11:59 PM, DemonDoug (71.43) wrote:

right... i'm not sure why my comment didn't go through, i posted a reply to myself where i said i'd forgotten to realize that an option contract would cost 58 bucks (much higher than 4.57). 

Not surprised you were an art history major.  It seems that people who are educated in finances are the biggest financial dolts out there.  I'm a simple physical therapist, the only thing I use to beat the market is common sense, which I feel I have a lot of.

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#6) On July 04, 2008 at 8:05 AM, TMFBent (99.81) wrote:

Well... I made the second bit really in jest, the $58+ vs. $5 +.

It doesn't matter what the "price" of the individual bit is. It's what you lose or gain in aggregate that matters.

What our friend Brett Arends is doing, unless there's a joke there too subtle for me to get, is adhering to the old false notion that makes folks believe a penny stock is cheaper than a $20 stock.

Sj

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#7) On July 04, 2008 at 7:10 PM, eskatonic (29.19) wrote:

the best play is to go find another stock. 

investing in ford is like throwing yourself on a live grenade.  the only good strategy is to run away as fast as possible.

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