Stock Option Quotes

In this room I have picked which gun was unloaded out of ten options. And then they pulled the trigger on me. I have picked stocks that went on to skyrocket. I have picked which pencil I would shove into Ms. Robertson’s ear until she kicked me out for thinking about it.

Here is an all-too-brief summary of Buffett’s approach: He looks for what he calls “franchise” companies with strong consumer brands, easily understandable businesses, robust financial health, and near-monopolies in their markets, like H & R Block, Gillette, and the Washington Post Co. Buffett likes to snap up a stock when a scandal, big loss, or other bad news passes over it like a storm cloud—as when he bought Coca-Cola soon after its disastrous rollout of “New Coke” and the market crash of 1987. He also wants to see managers who set and meet realistic goals; build their businesses from within rather than through acquisition; allocate capital wisely; and do not pay themselves hundred-million-dollar jackpots of stock options. Buffett insists on steady and sustainable growth in earnings, so the company will be worth more in the future than it is today.

Everybody who really makes money at some point owns a piece of a product, a business, or some IP. That can be through stock options if you work at a tech company. That’s a fine way to start. But usually, the real wealth is created by starting your own companies or even by investing. In an investment firm, they’re buying equity. These are the routes to wealth. It doesn’t come through the hours.

Within a couple of weeks of starting the Ph.D. program, though, she discovered that she'd booked passage on a sinking ship. There aren't any jobs, the other students informed her; the profession's glutted with tenured old men who won't step aside for the next generation. While the university's busy exploiting you for cheap labor, you somehow have to produce a boring thesis that no one will read, and find someone willing to publish it as a book. And then, if you're unsually talented and extraordinarily lucky, you just might be able to secure a one-year, nonrenewable appointment teaching remedial composition to football players in Oklahoma. Meanwhile, the Internet's booming, and the kids we gave C pluses to are waltzing out of college and getting rich on stock options while we bust our asses for a pathetic stipend that doesn't even cover the rent.

He told you that the company he worked for had offered him a few thousand more than the average salary plus stock options because they were desperately trying to look diverse.

Ed Woolard, his mentor on the Apple board, pressed Jobs for more than two years to drop the interim in front of his CEO title. Not only was Jobs refusing to commit himself, but he was baffling everyone by taking only $1 a year in pay and no stock options. “I make 50 cents for showing up,” he liked to joke, “and the other 50 cents is based on performance.

This is what Grandma was worried about, you know.' 'Me eating a whole chocolate cake practically all by myself in a single sitting?' 'You falling in love with a computer geek. Sure, they have good stock options and smokin' hot bods, but what about that dark side of genius that reanimates the dead?

Connections change too. Who's the capitalist, who's the proletarian. Who's on the right, who's on the left. The information revolution, stock options, floating assets, occupational restructuring, multinational corporations--what's good, what's bad. Boundaries between things are disappearing all the time.

Avoid companies that are cavalier about issuing new options to managers

Those who succeed big at anything all have the same attitude: You keep going until it happens or you die trying. Quitting is not an option.

Love isn't a stock option, it's a donation. Like blood, you don't ask for it back. Just love. That is the return, knowing that you loved.

SpaceX is the hip, forward-thinking place that’s brought the perks of Silicon Valley—namely frozen yogurt, stock options, speedy decision making, and a flat corporate structure—to a staid industry.

According to data from the Economic Policy Institute, pay for non-management workers increased by less than 12 percent between 1978 and 2016. On the other hand, CEO pay jumped by more than 800 percent if you include stock options.

Basically, CEOs have five essential choices for deploying capital—investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, or repurchasing stock—and three alternatives for raising it—tapping internal cash flow, issuing debt, or raising equity. Think of these options collectively as a tool kit. Over the long term, returns for shareholders will be determined largely by the decisions a CEO makes in choosing which tools to use (and which to avoid) among these various options. Stated simply, two companies with identical operating results and different approaches to allocating capital will derive two very different long-term outcomes for shareholders.

So-called Islamic 'fundamentalism' does not spring, in Pakistan, from the people. It is imposed on them from above. Autocratic regimes find it useful to espouse the rhetoric of faith, because people respect that language, are reluctant to oppose it. This how religions shore up dictators; by encircling them with words of power, words which the people are reluctant to see discredited, disenfranchised, mocked. But the ramming-down-the-throat point stands. In the end you get sick of it, you lose faith in the faith, if not qua faith then certainly as basis for a state. And then the dictator falls, and it is discovered that he had brought God down with him, that the justifying myth of the nation has been unmade. This leaves only two options: disintegration, or a new dictatorship ... no, there is a third, and I shall not be o pessimistic as to deny its possibility. The third option is the substitution of a new myth for the old one. Here are three such myths, all available from stock at short notice: liberty; equality; fraternity. I recommend them highly.

But if you’re serious about the path to enlightenment and lucrative stock options, go quietly with us in the noise and haste as we take a look at our lives and ask the one pertinent question for those who wish to conquer the twenty-first century: “What would Machiavelli do?” Answer? He would play to win.

motherhood is not a job at all. It is a full-time, all-consuming, life-subsuming career with no pay, no stock options, no social security, and lots of lip service with little actual respect (just watch the difference in people’s reactions to you when you tell them you are a project manager instead of a mother).

It’s a great scandal of the CEOs, who are simply bandits. They go into a company that had a rich base, grab everything they can for themselves, stock options, huge salaries, fire as many people as possible. If we ever have an oldfashioned revolution in the United States, it will be made by well-educated blue-collar workers who have lost their jobs.

If you can distill the essence of GE's stock behavior over the past twenty years, then you can apply it to financial engineering. You can estimate the risk of holding the stock over the next twenty years. You can estimate how many shares of the stock to buy for your portfolio. You can calculate the proper value of options you want to trade on the stock.

The stock market is 50% gambling. Futures and options markets (derivatives) are 90% gambling.

Our first big realization was that the remaining people were the highest performers, and it taught us that the best thing you can do for employees is hire only high performers to work alongside them. It’s a perk far better than foosball or free sushi or even a big signing bonus or the holy grail of stock options. Excellent colleagues, a clear purpose, and well-understood deliverables: that’s the powerful combination.

You make plans and decisions assuming randomness and chaos are for chumps. The illusion of control is a peculiar thing because it often leads to high self-esteem and a belief your destiny is yours for the making more than it really is. This over-optimistic view can translate into actual action, rolling with the punches and moving ahead no matter what. Often, this attitude helps lead to success. Eventually, though, most people get punched in the stomach by life. Sometimes, the gut-punch doesn’t come until after a long chain of wins, until you’ve accumulated enough power to do some serious damage. This is when wars go awry, stock markets crash, and political scandals spill out into the media. Power breeds certainty, and certainty has no clout against the unpredictable, whether you are playing poker or running a country. Psychologists point out these findings do not suggest you should throw up your hands and give up. Those who are not grounded in reality, oddly enough, often achieve a lot in life simply because they believe they can and try harder than others. If you focus too long on your lack of power, you can slip into a state of learned helplessness that will whirl you into a negative feedback loop of depression. Some control is necessary or else you give up altogether. Langer proved this when studying nursing homes where some patients were allowed to arrange their furniture and water plants—they lived longer than those who had had those tasks performed by others. Knowing about the illusion of control shouldn’t discourage you from attempting to carve a space for yourself out of whatever field you want to tackle. After all, doing nothing guarantees no results. But as you do so, remember most of the future is unforeseeable. Learn to coexist with chaos. Factor it into your plans. Accept that failure is always a possibility, even if you are one of the good guys; those who believe failure is not an option never plan for it. Some things are predictable and manageable, but the farther away in time an event occurs, the less power you have over it. The farther away from your body and the more people involved, the less agency you wield. Like a billion rolls of a trillion dice, the factors at play are too complex, too random to truly manage. You can no more predict the course of your life than you could the shape of a cloud. So seek to control the small things, the things that matter, and let them pile up into a heap of happiness. In the bigger picture, control is an illusion anyway.

His health problems became public again in March 2008, when Fortune published a piece called "The Trouble with Steve Jobs." It revealed that he had tried to treat his cancer with diets for nine months and also investigated his involvement in the backdating of Apple stock options. As the story was being prepared, Jobs invited - summoned - Fortune's managing editor Andy Serwer to Cupertino to pressure him to spike it. He leaned into Serwer's face and asked "So, you've uncovered the fact that I'm an asshole. Why is that news?

Read the notes.Never buy a stock without reading the footnotes to the financial statements in the annual report. Usually labeled “summary of significant accounting policies,” one key note describes how the company recognizes revenue, records inventories, treats installment or contract sales, expenses its marketing costs, and accounts for the other major aspects of its business.7 In the other footnotes, watch for disclosures about debt, stock options, loans to customers, reserves against losses, and other “risk factors” that can take a big chomp out of earnings

This leaves only two options: disintegration, or a new dictatorship ... no, there is a third, and I shall not be so pessimistic as to deny its possibility. The third option is the substitution of a new myth for the old one. Here are three such myths, all available from stock at short notice: liberty, equality, fraternity.

The options also were a way of shifting enormous risk from Renaissance to the banks. Because the lenders technically owned the underlying securities in the basket-options transactions, the most Medallion could lose in the event of a sudden collapse was the premium it had paid for the options and the collateral held by the banks. That amounted to several hundred million dollars. By contrast, the banks faced billions of dollars of potential losses if Medallion were to experience deep troubles. In the words of a banker involved in the lending arrangement, the options allowed Medallion to “ring-fence” its stock portfolios, protecting other parts of the firm, including Laufer’s still-thriving futures trading, and ensuring Renaissance’s survival in the event something unforeseen took place. One staffer was so shocked by the terms of the financing that he shifted most of his life savings into Medallion, realizing the most he could lose was about 20 percent of his money.

the split-strike conversion strategy. Option traders often referred to it as a “collar” or “bull spread.” Basically, it involved buying a basket of stocks, in Madoff’s case 30 to 35 blue-chip stocks that correlated very closely to the Standard & Poor’s (S&P) 100-stock index, and then protecting the stocks with put options. By bracketing an investment with puts and calls, you limit your potential profit if the market rises sharply; but in return you’ve protected yourself against devastating losses should the market drop. The calls created a ceiling on his gains when the market went up; the puts provided a floor to cut his losses when the market went down.

After you’ve distinguished between the things that are up to you and the things that aren’t (ta eph’hemin, ta ouk eph’hemin), and the break comes down to something you don’t control… you’ve got only one option: acceptance. The shot didn’t go in. The stock went to zero. The weather disrupted the shipment. Say it with me: C’est la vie. It’s all fine.

predictive judgments that provide input—for instance, how a candidate will perform in her first year, how the stock market will respond to a given strategic move, or how quickly the epidemic will spread if left unchecked. But the final decisions entail trade-offs between the pros and cons of various options, and these trade-offs are resolved by evaluative judgments.

Our quest for heroism is awkward. Not the obvious heroism that earns medals and applause but the heroism of daily life. Go to Princeton and you’re an educational hero; run a marathon and you’re an athletic hero; make loads of money and you’re a financial hero--the alpha hero of our culture. Each occupation and role in life has its own exacting rituals for advancement and reward, from the employee of the month parking space to stock options. The point is not the Princeton degree or the marathon medallion or the money or the parking space, it’s what these things say about us, that we are special and unique; that momentarily at least, we have risen head and shoulders above the clamoring masses to be giddily succored by premonitions of divinity.

Ed Woolard, his mentor on the Apple board, pressed Jobs for more than two years to drop the interim in front of his CEO title. Not only was Jobs refusing to commit himself, but he was baffling everyone by taking only $1 a year in pay and no stock options. “I make 50 cents for showing up,” he liked to joke, “and the other 50 cents is based on performance.” Since his return in July 1997, Apple stock had gone from just under $14 to just over $102 at the peak of the Internet bubble at the beginning of 2000. Woolard had begged him to take at least a modest stock grant back in 1997, but Jobs had declined, saying, “I don’t want the people I work with at Apple to think I am coming back to get rich.” Had he accepted that modest grant, it would have been worth $400 million. Instead he made $2.50 during that period.

A more recent concern relates to “financialization” and associated short-termism. Financialization is the growing importance of norms, metrics, and incentives from the financial sector to the wider economy. Some of the concerns expressed are that, for example, managers are increasingly awarded stock options to align their incentives with those of shareholders; companies are often explicitly managed to increase short-term shareholder value; and financial engineering, such as share buybacks and earnings management, has become a more important part of senior managers’ jobs. The end result is that rather than finance serving business, business serves finance: the tail wags the dog. What John Kay described as “obliquity,” the idea that making money was a consequence of, or a second-order benefit of, serving one’s customers and building good businesses, is driven out (Kay 2010).

screening option was created specifically for this book, magicformulainvesting.com. The magicformula investing.com site is designed to emulate the returns achieved in our study as closely as possible. This site is currently available for free. Step-by-step instructions for selecting stocks using magicformulainvesting.com follow. Other options include, but are not limited to, the screening packages available at aaii.com, powerinvestor.com, and smart money.com.

Yes, that’s the one. Aaron, I want you to acquire the company tomorrow. Start low, but I want you to end up offering at least fifteen million for it. Actually, how many partners are there?” “I see two registered partners. Michael Teo and Adrian Balakrishnan.” “Okay, bid thirty million.” “Charlie, you can’t be serious? The book value on that company is only—” “No, I’m dead serious,” Charlie cut in. “Start a fake bidding war between some of our subsidiaries if you have to. Now listen carefully. After the deal is done, I want you to vest Michael Teo, the founding partner, with class-A stock options, then I want you to bundle it with that Cupertino start-up we acquired last month and the software developer in Zhongguancun. Then, I want us to do an IPO on the Shanghai Stock Exchange next month.” “Next month?” “Yes, it has to happen very quickly. Put the word out on the street, let your contacts at Bloomberg TV know about it, hell, drop a hint to Henry Blodget if you think it will help drive up the share price. But at the end of the day I want those class-A stock options to be worth at least $250 million. Keep it off the books, and set up a shell corporation in Liechtenstein if you have to. Just make sure there are no links back to me. Never, ever.

If you are going to use probability to model a financial market, then you had better use the right kind of probability. Real markets are wild. Their price fluctuations can be hair-raising-far greater and more damaging than the mild variations of orthodox finance. That means that individual stocks and currencies are riskier than normally assumed. It means that stock portfolios are being put together incorrectly; far from managing risk, they may be magnifying it. It means that some trading strategies are misguided, and options mis-priced. Anywhere the bell-curve assumption enters the financial calculations, an error can come out.

It was a tough journey, though, and I realize that some people don’t have the endurance, or the faith, to continue in the face of such great resistance. But not a day goes by when I don’t meet someone who’s also put it all on the line and is working their butt off to achieve their professional and personal dreams. Many millennials, in particular, are willing to take a chance and do something outside the box, without the “right” degree or experience or any guarantee of future success. They’re willing to start a business—a tech company, a nonprofit—with a couple of friends or alone in their apartment. They’ve rejected the narrative that most boomers lived by—that you should go to school, get a job, work for the same company for thirty years, trust that the company will take care of you after retirement with a pension and possibly stock options. They’ve rejected that narrative because it doesn’t exist anymore in most cases. Most of the millennials who expect that path are, in my opinion, the ones still living at home. Getting angry at “the man” for keeping them down. Waiting for someone else, the government most likely, to come in and save the day. These are the ones who reject or don’t take personal responsibility. Who get out of college, get their first job, and want to be the boss of the company the very same day. They’re twenty-five, have no experience beyond that one semester as an intern, but they want that corner office and $100K in year one.

Where do you go to make friends when you’re an adult? No, honestly, I’m asking, where do you do this? There are no more late-night study sessions or university social events. And while meeting friends at work is the obvious answer, your options are very limited if you don’t click with your colleagues or if you’re self-employed. (Also, if you’re only friends with people at work, who do you complain about your colleagues too?) I don’t volunteer. I don’t participate in organised religion. I don’t play team sports. Where do selfish, godless, lazy people go to make friends? That’s where I need to be. Nearly all of my closest friends have been assigned to me: either via seating chats at school, university room-mates, or desk buddies at work. After taking stock, I realise that most of my friends were forced to sit one metre away from me for several hours at a time. I’ve never actively reached out to make a new friend who wasn’t within touching distance. With no helpful administrators, just how do we go about making friends as adults? Is it possible to cultivate that intense closeness without the heady combination of naivety, endless hours of free time on hand and lack of youthful inhibitions? Or is that lost for ever after we hit thirty?

So many of his proposals looked crazy at first glance, but once you peeled back the first layer, you realized that underneath there existed a core of irrefutable logic. Take the new punishment laws, those really set me off. Putting people in stocks? Whipping them in town squares!?! What was this, Old Salem, the Taliban’s Afghanistan? It sounded barbaric, un-American, until you really thought about the options. What were you going to do with thieves and looters, put them in prison? Who would that help? Who could afford to divert able-bodied citizens to feed, clothe, and guard other able-bodied citizens? More importantly, why remove the punished from society when they could serve as such a valuable deterrent? Yes, there was the fear of pain—the lash, the cane—but all of that paled when compared to public humiliation. People were terrified of having their crimes exposed. At a time when everyone was pulling together, helping each other out, working to protect and take care of one another, the worst thing you could do to someone was to march them up into the public square with a giant poster reading “I Stole My Neighbor’s Firewood.” Shame’s a powerful weapon, but it depended on everyone else doing the right thing. No one is above the law, and seeing a senator given fifteen lashes for his involvement in war profiteering did more to curb crime than a cop on every street corner.

Decouplers often trip up on this step in two ways. First, they are overly generic in articulating the CVC. When mapping the process of buying a car, auto executives tend to describe it as: feel the need to buy car > become aware of a car brand > develop an interest in the brand > visit the dealer > purchase the car. This is a start, but it is not specific enough. Decouplers must ask: When do people actually need a new car? How exactly do people become aware of car brands? How do people become interested in a make or model? And so on. The generic process of awareness, interest, desire, and purchase isn’t specific enough to help. Decouplers also flounder by failing to identify all the relevant stages in the value chain. For the car-buying process, a better description of the CVC might be: become aware that your car lease will expire in one month > feel the need to purchase a new car > develop a heightened interest in car ads > visit car manufacturers’ websites > create a set of two or three brands of interest > visit third-party auto websites > compare options of cars in the same category > choose a model > shop online for the best price > visit the nearest dealer to see if they have the model in stock > see if they can beat the best online price > test-drive the cars > decide about financing, warranty, and other add-ons > negotiate a final price > sign the contract > pick up the car > use it > wait for the lease to expire again. With this far more detailed CVC, we can fully appreciate the complexity of the car-buying

Between 2003 and 2008, Iceland’s three main banks, Glitnir, Kaupthing and Landsbanki, borrowed over $140 billion, a figure equal to ten times the country’s GDP, dwarfing its central bank’s $2.5 billion reserves. A handful of entrepreneurs, egged on by their then government, embarked on an unprecedented international spending binge, buying everything from Danish department stores to West Ham Football Club, while a sizeable proportion of the rest of the adult population enthusiastically embraced the kind of cockamamie financial strategies usually only mooted in Nigerian spam emails – taking out loans in Japanese Yen, for example, or mortgaging their houses in Swiss francs. One minute the Icelanders were up to their waists in fish guts, the next they they were weighing up the options lists on their new Porsche Cayennes. The tales of un-Nordic excess are legion: Elton John was flown in to sing one song at a birthday party; private jets were booked like they were taxis; people thought nothing of spending £5,000 on bottles of single malt whisky, or £100,000 on hunting weekends in the English countryside. The chief executive of the London arm of Kaupthing hired the Natural History Museum for a party, with Tom Jones providing the entertainment, and, by all accounts, Reykjavik’s actual snow was augmented by a blizzard of the Colombian variety. The collapse of Lehman Brothers in late 2008 exposed Iceland’s debts which, at one point, were said to be around 850 per cent of GDP (compared with the US’s 350 per cent), and set off a chain reaction which resulted in the krona plummeting to almost half its value. By this stage Iceland’s banks were lending money to their own shareholders so that they could buy shares in . . . those very same Icelandic banks. I am no Paul Krugman, but even I can see that this was hardly a sustainable business model. The government didn’t have the money to cover its banks’ debts. It was forced to withdraw the krona from currency markets and accept loans totalling £4 billion from the IMF, and from other countries. Even the little Faroe Islands forked out £33 million, which must have been especially humiliating for the Icelanders. Interest rates peaked at 18 per cent. The stock market dropped 77 per cent; inflation hit 20 per cent; and the krona dropped 80 per cent. Depending who you listen to, the country’s total debt ended up somewhere between £13 billion and £63 billion, or, to put it another way, anything from £38,000 to £210,000 for each and every Icelander.

While most consumers say that they would choose a green product over less environmentally friendly options, they would only do it if the price difference is not significant.

Thinking about joining a startup? Ask for a hiring bonus equal to the exercise cost, early exercise rights, and NSOs instead of ISOs. Exercise as soon as possible and ASAP file an 83(b) Election. Recently hired? If you can afford to fully exercise your options and are permitted to do so, ask to get your ISOs converted to NSOs, perform an early exercise, and file an 83(b) Election.

To see how transfer of antifragility works, consider two scenarios, in which the market does the same thing on average but following different paths. Path 1: market goes up 50 percent, then goes back down to erase all gains. Path 2: market does not move at all. Visibly Path 1, the more volatile, is more profitable to the managers, who can cash in their stock options. So the more jagged the route, the better it is for them. And of course society—here the retirees—has the exact opposite payoff since they finance bankers and chief executives. Retirees get less upside than downside. Society pays for the losses of the bankers, but gets no bonuses from them. If you don’t see this transfer of antifragility as theft, you certainly have a problem.

A call is an option to buy a stated amount of a certain stock at a fixed price—generally near the current market price—at any time during a stated period. Calls on most listed stocks are always on sale by dealers who specialize in them. The purchaser pays a generally rather moderate sum for his option; if the stock then goes up during the stated period, the rise can easily be converted into almost pure profit for him, while if the stock stays put or goes down, he simply tears up his call the way a horseplayer tears up a losing ticket, and loses nothing but the cost of the call. Therefore calls provide the cheapest possible way of gambling on the stock market, and the most convenient way of converting inside information into cash.

because the company has historically relied on stock options, not high salaries, to incentivize employees.

Traders had begun to speak of the ‘Greenspan put’ because having him at the Fed was like having a ‘put’ option on the stock market (an option but not an obligation to sell stocks at a good price in the future).

Once you create and dominate a niche market, then you should gradually expand into related and slightly broader markets. Amazon shows how it can be done. Jeff Bezos’s founding vision was to dominate all of online retail, but he very deliberately started with books. There were millions of books to catalog, but they all had roughly the same shape, they were easy to ship, and some of the most rarely sold books—those least profitable for any retail store to keep in stock—also drew the most enthusiastic customers. Amazon became the dominant solution for anyone located far from a bookstore or seeking something unusual. Amazon then had two options: expand the number of people who read books, or expand to adjacent markets. They chose the latter, starting with the most similar markets: CDs, videos, and software. Amazon continued to add categories gradually until it had become the world’s general store. The name itself brilliantly encapsulated the company’s scaling strategy.

As a general rule, everyone you involve with your company should be involved full-time. Sometimes you’ll have to break this rule; it usually makes sense to hire outside lawyers and accountants, for example. However, anyone who doesn’t own stock options or draw a regular salary from your company is fundamentally misaligned.

If there was history being made in the city, if history was the high-level war rich people waged for their own turf in the city—those wars about waterfront developments and opera houses and real-estate deals and privatization contracts—then the poor waged wars for control of their small alleyways and walkways, their streets and the trade in unofficial goods. Their currency was not stocks, wealth and influence peddling, but tough reputations and threats of physical damage; their gains weren’t stock options and expensive homes but momentary physical control and perennially contested fearsomeness. This war was a more volatile war, perhaps. There was no cushion of security to land on if you lost a skirmish.

With such theories, economists developed a very elaborate toolkit for analyzing markets, measuring the "variance" and "betas" of different securities and classifying investment portfolios by their probability of risk. According to the theory, a fund manager can build an "efficient" portfolio to target a specific return, with a desired level of risk. It is the financial equivalent of alchemy. Want to earn more without risking too much more? Use the modern finance toolkit to alter the mix of volatile and stable stocks, or to change the ratio of stocks, bonds, and cash. Want to reward employees more without paying more? Use the toolkit to devise an employee stock-option program, with a tunable probability that the option grants will be "in the money." Indeed, the Internet bubble, fueled in part by lavish executive stock options, may not have happened without Bachelier and his heirs.

Outside board members are usually compensated with stock options—just like key employees—and are often invited to invest money in the company alongside the VCs.

When an enterprising individual or company needed to raise money or capital, it made what became known as a stock offering.

One recent study provides an answer. Professors Michael J. Cooper of the University of Utah, Huseyin Gulen of Purdue University, and P. Raghavendra Rau of the University of Cambridge studied 1,500 large companies and how they performed, in three-year periods, from 1994 to 2011. They then compared these companies’ performance to other companies in their same fields. They discovered that the 150 companies with the highest-paid CEOs returned about 10 percent less to their shareholders than did their industry peers. In fact, the more these CEOs were paid, the worse their companies did. Companies that were the most generous to their CEOs—and whose high-paid CEOs received more of that compensation as stock options—did 15 percent worse than their peer companies, on average. “The returns are almost three times lower for the high-paying firms than the low-paying firms,” said Cooper. “This wasteful spending destroys shareholder value.” Even worse, the researchers found that the longer a highly paid CEO was in office, the more the firm underperformed. “The performance worsens significantly over time,” they concluded.

We’ll start our history lesson in 14th-century Venice. Lending money

In the early years, top incomes were derived from capital, and the richest people were what Piketty and Saez call “coupon clippers,” who received most of their incomes from dividends and interest. The fortunes underlying these receipts were eroded over the century by increasingly progressive income and estate taxes. Those who used to live off their (or their ancestors’) fortunes have been replaced at the top by earners, people like CEOs of large firms, Wall Street bankers, and hedge fund managers, who receive their incomes as salaries, bonuses, and stock options. Entrepreneurial

I watched the transformation in my father as he picked one winner after another, and I liked what I saw. As he watched the stock climb, he would break into a big, broad smile, until he was literally beaming. He was having a very good time. He was loosening up. He finally felt that he was getting ahead. This was why he had come to America, to make a life for his family. Often I would help him with his decisions. If he was interested in a particular company, I would research it for him, and we would discuss the possibility of buying a few shares. He treated me like an equal, like his partner. Together we learned about buying on margin, about options trading, about puts and calls. Before long I found myself leaping out of bed at the crack of dawn, pouring myself a bowl of cereal, and parking myself in front of the television. I had the morning newspaper to my left and a pad and pencil to my right. The fact is, anyone can do this. It’s just like homework, except it’s the real world. It takes time and effort to get an A, and the same rules apply here, but the difference is that this is worth taking very, very seriously. After all, we’re not talking about grades—we’re talking about serious money.

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A brand-new, highly effective anti-flu drug that had potential for massive sales. With the new bird flu scare, Merwyn stood to make a bundle off of the ensuing panic. With a 98 percent profit margin and skyrocketing demand, Merwyn couldn’t lose. Andrew alone stood to make millions in stock options and bonus incentives for brokering the deal. It was like a dream come true: the global spread of the avian flu virus, millions infected, a few hundred thousand dead and millions more taking Preva-Flu by the $80 packet.

An investment is tax inefficient if it relies heavily on investment income, instead of its price movement.

Here are some bad answers: “Your stock options will be worth more here than elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help solve the world’s most challenging problems.” What’s wrong with valuable stock, smart people, or pressing problems? Nothing—but every company makes these same claims, so they won’t help you stand out. General and undifferentiated pitches don’t say anything about why a recruit should join your company

On the day it was announced that Boesky was going down, I was negotiating with USX lawyers about the terms of a possible agreement that would give Carl the opportunity to have access to USX’s financial information,” Steve Jacobs recalls. “This presumably would facilitate Carl’s ability to make a bid because Drexel needed the information. But when the announcement came about Boesky, you knew the transaction was not going to fly.”   In the past, Icahn had succeeded in intimidating his adversaries by convincing them that he had the resources to make good on his threats. In most cases, that meant buying stock until he controlled or appeared capable of controlling the companies he attacked. But once Drexel was laid low and the pipeline of takeover capital had run dry, Icahn’s options were limited. In a critical transition, USX’s lawyers and investment bankers started treating Icahn as a major stockholder rather than as a raider capable of acquiring the business.

not only deprives workers of the fruits of their labour by paying them 1/200th of the salary that goes to their CEO (the international average as of this writing, not including bonuses and stock options); it deprives workers of the very meaning of labour itself

In response to current events, people often reach for historical analogies, and this occasion was no exception. The trick is to choose the right analogy. In August 2007, the analogies that came to mind—both inside and outside the Fed—were October 1987, when the Dow Jones industrial average had plummeted nearly 23 percent in a single day, and August 1998, when the Dow had fallen 11.5 percent over three days after Russia defaulted on its foreign debts. With help from the Fed, markets had rebounded each time with little evident damage to the economy. Not everyone viewed these interventions as successful, though. In fact, some viewed the Fed’s actions in the fall of 1998—three quarter-point reductions in the federal funds rate—as an overreaction that helped fuel the growing dot-com bubble. Others derided what they perceived to be a tendency of the Fed to respond too strongly to price declines in stocks and other financial assets, which they dubbed the “Greenspan put.” (A put is an options contract that protects the buyer against loss if the price of a stock or other security declines.) Newspaper opinion columns in August 2007 were rife with speculation that Helicopter Ben would provide a similar put soon. In arguing against Fed intervention, many commentators asserted that investors had grown complacent and needed to be taught a lesson. The cure to the current mess, this line of thinking went, was a repricing of risk, meaning a painful reduction in asset prices—from stocks to bonds to mortgage-linked securities. “Credit panics are never pretty, but their virtue is that they restore some fear and humility to the marketplace,” the Wall Street Journal had editorialized, in arguing for no rate cut at the August 7 FOMC meeting.

Bizarre and Surprising Insights—Consumer Behavior Insight Organization Suggested Explanation7 Guys literally drool over sports cars. Male college student subjects produce measurably more saliva when presented with images of sports cars or money. Northwestern University Kellogg School of Management Consumer impulses are physiological cousins of hunger. If you buy diapers, you are more likely to also buy beer. A pharmacy chain found this across 90 days of evening shopping across dozens of outlets (urban myth to some, but based on reported results). Osco Drug Daddy needs a beer. Dolls and candy bars. Sixty percent of customers who buy a Barbie doll buy one of three types of candy bars. Walmart Kids come along for errands. Pop-Tarts before a hurricane. Prehurricane, Strawberry Pop-Tart sales increased about sevenfold. Walmart In preparation before an act of nature, people stock up on comfort or nonperishable foods. Staplers reveal hires. The purchase of a stapler often accompanies the purchase of paper, waste baskets, scissors, paper clips, folders, and so on. A large retailer Stapler purchases are often a part of a complete office kit for a new employee. Higher crime, more Uber rides. In San Francisco, the areas with the most prostitution, alcohol, theft, and burglary are most positively correlated with Uber trips. Uber “We hypothesized that crime should be a proxy for nonresidential population.…Uber riders are not causing more crime. Right, guys?” Mac users book more expensive hotels. Orbitz users on an Apple Mac spend up to 30 percent more than Windows users when booking a hotel reservation. Orbitz applies this insight, altering displayed options according to your operating system. Orbitz Macs are often more expensive than Windows computers, so Mac users may on average have greater financial resources. Your inclination to buy varies by time of day. For retail websites, the peak is 8:00 PM; for dating, late at night; for finance, around 1:00 PM; for travel, just after 10:00 AM. This is not the amount of website traffic, but the propensity to buy of those who are already on the website. Survey of websites The impetus to complete certain kinds of transactions is higher during certain times of day. Your e-mail address reveals your level of commitment. Customers who register for a free account with an Earthlink.com e-mail address are almost five times more likely to convert to a paid, premium-level membership than those with a Hotmail.com e-mail address. An online dating website Disclosing permanent or primary e-mail accounts reveals a longer-term intention. Banner ads affect you more than you think. Although you may feel you've learned to ignore them, people who see a merchant's banner ad are 61 percent more likely to subsequently perform a related search, and this drives a 249 percent increase in clicks on the merchant's paid textual ads in the search results. Yahoo! Advertising exerts a subconscious effect. Companies win by not prompting customers to think. Contacting actively engaged customers can backfire—direct mailing financial service customers who have already opened several accounts decreases the chances they will open more accounts (more details in Chapter 7).

Salary increases in terms of percentage are too close between the top performers and those who are not. There’s not enough differentiation in bonus, or in stock options, or in stock grants. Leaders need the confidence to explain to a direct report why he got a lower than expected reward. A good leader ensures that the organization makes these distinctions and that they become a way of life, down throughout the organization. Otherwise people think they’re involved in socialism. That isn’t what you want when you strive for a culture of execution. You have to make it clear to everybody that rewards and respect are based on performance. In chapter 4, we’ll explain why so many companies don’t reward the doers, and how those that execute do.

The best indicator is whether or not a green (red) candlestick following a red (green) candlestick which engulfs the candlestick to the left is the best indicator of a coming reversal.

High-yield bonds—which Graham calls “second-grade” or “lower-grade” and today are called “junk bonds”—get a brisk thumbs-down from Graham. In his day, it was too costly and cumbersome for an individual investor to diversify away the risks of default.;1 (To learn how bad a default can be, and how carelessly even “sophisticated” professional bond investors can buy into one, see the sidebar on p. 146.) Today, however, more than 130 mutual funds specialize in junk bonds. These funds buy junk by the cartload; they hold dozens of different bonds. That mitigates Graham’s complaints about the difficulty of diversifying. (However, his bias against high-yield preferred stock remains valid, since there remains no cheap and widely available way to spread their risks.) Since 1978, an annual average of 4.4% of the junk-bond market has gone into default—but, even after those defaults, junk bonds have still produced an annualized return of 10.5%, versus 8.6% for 10-year U.S. Treasury bonds.2 Unfortunately, most junk-bond funds charge high fees and do a poor job of preserving the original principal amount of your investment. A junk fund could be appropriate if you are retired, are looking for extra monthly income to supplement your pension, and can tolerate temporary tumbles in value. If you work at a bank or other financial company, a sharp rise in interest rates could limit your raise or even threaten your job security—so a junk fund, which tends to outper-forms most other bond funds when interest rates rise, might make sense as a counterweight in your 401(k). A junk-bond fund, though, is only a minor option—not an obligation—for the intelligent investor.

Implied volatility is expressed as a percentage of the stock price, indicating a one standard deviation move over the course of a year

I want to reiterate that the “textbook definition” of delta has nothing to do with the probability of options finishing in- or out-of-the-money. Again, delta is simply the amount an option price will move based on a $1 change in the underlying stock. But looking at delta as the probability an option will finish in-the-money is a pretty nifty way to think about it. And if there’s one thing I want to encourage in this playbook, it’s nifty ways of thinking about options.

what this talk about gamma boils down to is that the price of near-term at-the-money options will exhibit the most explosive response to price changes in the stock.

As I travel around the financial services industry today, the most interesting trend I see is the one toward relationship consolidation. Now that Glass-Steagall has been repealed, and all financial services providers can provide just about all financial services, there's a tendency - particularly as people get older - to want to tie everything up... to develop a plan, which implies having a planner. A planner, not a whole bunch of 'em... You've got basically two options. One is that you can sit here and wait for a major investment firm, which handles your client's investment portfolio while you handle the insurance, to bring their developing financial and estate planning capabilities to your client's door. And to take over the whole relationship. In this case, you have chosen to be the Consolidatee. A better option is for you to be the Consolidator. That is, you go out and consolidate the clients' financial lives pursuant to a really great plan - the kind you pride yourselves on. And of course that would involve your taking over management of the investment portfolio. Let's start with the classic Ibbotson data [Stocks, Bonds, Bills and Inflation Yearbook, Ibbotson Associates]. In the only terms that matter to the long-term investor - the real rate of return - he [the stockholder] got paid more like three times what the bondholder did. Why would an efficient market, over more than three quarters of a centry, pay the holders of one asset class anything like three times what it paid the holders of the other major asset class? Most people would say: risk. Is it really risk that's driving the premium returns, or is it volatility? It's volatility.... I invite you to look carefully at these dirty dozen disasters: the twelve bear markets of roughly 20% or more in the S&P 500 since the end of WWII. For the record, the average decline took about thirteen months from peak to trough, and carried the index down just about 30%. And since there've been twelve of these "disasters" in the roughly sixty years since war's end, we can fairly say that, on average, the stock market in this country has gone down about 30% about one year in five.... So while the market was going up nearly forty times - not counting dividends, remember - what do we feel was the major risk to the long-term investor? Panic. 'The secret to making money in stocks is not getting scared out of them' Peter Lynch.

The Numbers Game Even Graham would have been startled by the extent to which companies and their accountants pushed the limits of propriety in the past few years. Compensated heavily through stock options, top executives realized that they could become fabulously rich merely by increasing their company’s earnings for just a few years running.1 Hundreds of companies violated the spirit, if not the letter, of accounting principles—turning their financial reports into gibberish, tarting up ugly results with cosmetic fixes, cloaking expenses, or manufacturing earnings out of thin air.

DiPascali, a small terrier-like man with the unpolished speech of his native Queens, came through for Madoff. Using self-taught computer skills and the historical stock and options prices available to any brokerage firm, he created a convincing paper trail covering several years of complex trading activity that almost certainly had never occurred.

You want to buy a LEAPS call that is deep in-the-money. (When talking about a call, “in-the-money” means the strike price is below the current stock price.) A general rule of thumb to use while running this play is to look for a delta of .80 or more at the strike price you choose. Remember, a delta of .80 means that if the stock rises $1, then in theory, the price of your option will rise $0.80. If delta is .90, then if the stock rises $1, in theory your options will rise $0.90, and so forth.

Your other option is to choose a particular region, or a group of emerging markets by making use of a broad

These days (as those few physicians who try actively to fight quackery have found to their sorrow), it is nearly impossible to deprive a doctor of his license to practice for anything so problematical as mere scientific heterodoxy. To fly by the seat of one's pants, espousing or devising nostrums as one chooses, without regard to scientific validity, is an open option. The stock of patients who can be recruited by the force of personality or the lure of hope is essentially limitless.

giving performance reviews is a very complicated and difficult business and that we, managers, don’t do an especially good job at it. The fact is that giving such reviews is the single most important form of task-relevant feedback we as supervisors can provide. It is how we assess our subordinates’ level of performance and how we deliver that assessment to them individually. It is also how we allocate the rewards—promotions, dollars, stock options, or whatever we may use. As we saw earlier, the review will influence a subordinate’s performance—positively or negatively—for a long time, which makes the appraisal one of the manager’s highest-leverage activities.

By looking in the annual report for the mandatory footnote about stock options, you can see how large the “option overhang” is. AOL Time Warner, for example, reported in the front of its annual report that it had 4.5 billion shares of common stock outstanding as of December 31, 2002—but a footnote in the bowels of the report reveals that the company had issued options on 657 million more shares. So AOL’s future earnings will have to be divided among 15% more shares. You should factor in the potential flood of new shares from stock options whenever you estimate a company’s future value.

Financial strength and capital structure. The most basic possible definition of a good business is this: It generates more cash than it consumes. Good managers keep finding ways of putting that cash to productive use. In the long run, companies that meet this definition are virtually certain to grow in value, no matter what the stock market does. Start by reading the statement of cash flows in the company’s annual report. See whether cash from operations has grown steadily throughout the past 10 years. Then you can go further. Warren Buffett has popularized the concept of owner earnings, or net income plus amortization and depreciation, minus normal capital expenditures. As portfolio manager Christopher Davis of Davis Selected Advisors puts it, “If you owned 100% of this business, how much cash would you have in your pocket at the end of the year?” Because it adjusts for accounting entries like amortization and depreciation that do not affect the company’s cash balances, owner earnings can be a better measure than reported net income. To fine-tune the definition of owner earnings, you should also subtract from reported net income: any costs of granting stock options, which divert earnings away from existing shareholders into the hands of new inside owners any “unusual,” “nonrecurring,” or “extraordinary” charges any “income” from the company’s pension fund. If owner earnings per share have grown at a steady average of at least 6% or 7% over the past 10 years, the company is a stable generator of cash, and its prospects for growth are good.

Companies should buy back their shares when they are cheap—not when they are at or near record highs. Unfortunately, it recently has become all too common for companies to repurchase their stock when it is overpriced. There is no more cynical waste of a company’s cash—since the real purpose of that maneuver is to enable top executives to reap multimillion-dollar paydays by selling their own stock options in the name of “enhancing shareholder value.

Companies should buy back their shares when they are cheap—not when they are at or near record highs. Unfortunately, it recently has become all too common for companies to repurchase their stock when it is overpriced. There is no more cynical waste of a company’s cash—since the real purpose of that maneuver is to enable top executives to reap multimillion-dollar paydays by selling their own stock options in the name of “enhancing shareholder value.” A substantial amount of anecdotal evidence, in fact, suggests that managers who talk about “enhancing shareholder value” seldom do. In investing, as with life in general, ultimate victory usually goes to the doers, not to the talkers.

How much do companies use buybacks to fool shareholders and the markets about the actual health and prospects of their companies? How much do executives, each being paid with stock and options worth millions and sometimes hundreds of millions, use buybacks simply to enrich themselves?

He also wants to see managers who set and meet realistic goals; build their businesses from within rather than through acquisition; allocate capital wisely; and do not pay themselves hundred-million-dollar jackpots of stock options.

Unfortunately, one of the things that is lacking in our society is a good financial education. Most people barely understand what the stock market is and how it operates, and options are a level above even that.

These are not marginal or idiosyncratic categories of income (although the need to translate from tax categories to moral ones inevitably introduces judgment and imprecision into any accounting). Founder’s shares, carried interest, and executive stock compensation give nominally capital gains a substantial component of labor income, especially among the very rich. To begin with, roughly half of the twenty-five largest American fortunes, according to Forbes, arise from founder’s stock still held by the founders who built the firms. Moreover, the share of total capital gains income reported to the Treasury that is attributable to carried interest alone—to the labor of hedge fund managers—has grown by a factor of perhaps ten in the past two decades and now comprises a material share of all the capital gains reported by one-percenters. And over the past twenty years, roughly half of all CEO compensation across the S&P 1500 has taken the form of stock or stock options. Pensions and housing also contribute substantially to top incomes today, roughly doubling the shares that they contributed in the 1960s. Once again, the data cannot sustain precise measurements, but these forms of labor income, taken together, plausibly comprise roughly another third of top incomes, sitting atop the roughly half of top incomes attributable to labor on even the most conservative accounting. The data therefore confirm—top-down—the narrative of labor income that bubbles up from a survey of elite jobs. Both the top 1 percent and even the top 0.1 percent today receive between two-thirds and three-quarters of their income in exchange not for land, machines, or financing but rather for deploying their own effort and skill. The richest person out of every hundred in the United States today, and indeed the richest person out of every thousand, now literally works for a living.

When a manager has a criminal record or a history of cheating investors or even just feels above the law, I stop right there. Crooks don’t suddenly sprout a sense of fiduciary duty. When a piece of evidence might or might not tag a bad guy, I use it only if it hints at other investment defects. Glamorous hype stocks are more likely to be scams, but I avoid them because they are usually overpriced and prone to raising capital constantly. Intricate corporate structures make analysis difficult, even if nothing bad is going on. To spot bad guys, look for the fraud triangle: pressure, opportunity, and rationalization. Philosopher Hannah Arendt had it right that “most evil is done by people who never make up their minds to be good or evil.” Watch for when massive option grants or hefty fees compel people to try too hard. Pride can be a dominant motive when an audience believes in someone’s magical powers. Charismatic promoters often suppress the boards of directors, auditors, and other naysayers that might prevent them from doing what they want. They cluster in industries and geographies where capital is abundantly available with little scrutiny or accountability. Lax accounting standards are also a draw. Don’t buy anything someone is pushing hard. By avoiding the bad-guy stocks—and it’s a short list—I slash the possibility of a disastrous outcome but scarcely reduce my opportunity set.

In the last 15 years, German cities including Freiburg, Tübingen, Hamburg, and Berlin have developed cooperative building programs called “Baugemeinschaft” or “Baugruppen.” This is a development model that allows the future owners to become the developers. By developing buildings individually, plot by plot, a diverse, high-quality, and more affordable building stock is possible. The Baugemeinschaft approach bridges the individual and private needs of residents and their common and social needs. Seldom do urban dwellings respond to the needs of an active and growing family. Often, the only way to have a home designed to your own specification, is to find a site outside of the city and build a detached house. Designing your own home in an urban setting is often only an option for the wealthy. New apartments offer some choices, but they are limited to things such as bathroom tiles and kitchen cabinets. The idea of being able to influence the design of your own urban home, including the dimensions, layout, heating system, and insulation is extremely interesting.

Security selection refers to the method of construction of portfolios for each of the individual asset classes, beginning with the choice of passive or active management. Passive management, the baseline against which other options must be measured, involves replication of the underlying market. In the case of domestic equities, the S&P 500, the S&P 1500, the Russell 3000, and the Wilshire 5000 represent broad-based indices that provide reasonable definitions of the market and sensible alternatives for investors pursuing passive management. Active management involves making bets against the market, with the investor attempting to overweight attractively priced stocks and underweight expensively priced stocks. The returns resulting from the active manager’s deviations relative to the benchmark represent security selection returns.

Humanitarian procurement for emergency response is spontaneous and often unplanned, because although we may plan for a catastrophe the when it may happen maybe a mystery! To address this, innovative solutions must include putting in place long term agreements (framework agreements), contracts for vendor consigned stocks, pre-positioning of stocks which would predictably be used for a broad range of responses and a cash based intervention option to allow people affected to have their dignity of choice.

Government rules permit and encourage a vicious cycle. To the extent that pensions are not fully funded, that their true costs are not paid each year, it means that corporate profits are inflated. Inflated profits mean that share prices for company stock are inflated, because they should represent the profitability of companies. And inflated stock prices mean, in turn, that executives cash in their options for more than they should get.

Many millennials, in particular, are willing to take a chance and do something outside the box, without the “right” degree or experience or any guarantee of future success. They’re willing to start a business—a tech company, a nonprofit—with a couple of friends—or alone in their apartment. They’ve rejected the narrative that most boomers lived by—that you should go to school, get a job, work for the same company for thirty years, trust that the company will take care of you after retirement with a pension and possibly stock options. They’ve rejected that narrative because it doesn’t exist anymore, in most cases. Most of the millennials who expect that path are, in my opinion, the ones still living at home. Getting angry at “the man” for keeping them down. Waiting for someone else, the government most likely, to come in and save the day.

We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”21

However, anyone who doesn’t own stock options or draw a regular salary from your company is fundamentally misaligned. At the margin, they’ll be biased to claim value in the near term, not help you create more in the future. That’s why hiring consultants doesn’t work. Part-time employees don’t work.

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Given the social conditions that prevailed during his lifetime, Adam Smith was prescient in his judgment. Experience tells us that small markets do produce their own constraint and rational order, founded as they are on an interlocking system of self-interested exchange. However, Smith lived before the invention of the megacorporation, before instant communication with a global reach, and before the double cheeseburger and stock options. In America, living with such an abundance of choice, we have discovered some disturbing facts about human behavior—facts that from knowledge of modern neurobiology are predictable and that confirm Smith’s worst fears.

Roles appear as soon as a common stock of knowledge containing reciprocal typifications of conduct is in process of formation, a process that, as we have seen, is endemic to social interaction and prior to institutionalization proper. The question as to which roles become institutionalized is identical with the question as to which areas of conduct are affected by institutionalization, and may be answered the same way. All institutionalized conduct involves roles. Thus roles share in the controlling character of institutionalization. As soon as actors are typified as role performers, their conduct is ipso facto susceptible to enforcement. Compliance and non-compliance with socially defined role standards ceases to be optional, though, of course, the severity of sanctions may vary from case to case. The roles represent the institutional order.38 This representation takes place on two levels. First, performance of the role represents itself. For instance, to engage in judging is to represent the role of judge. The judging individual is not acting “on his own,” but qua judge. Second, the role represents an entire institutional nexus of conduct.

The indefiniteness of finance can be bizarre. Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this: • The founders don’t know what to do with it, so they give it to a large bank. • The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. • Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. • Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats. At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.

Delays in incorporation of companies, lack of early stage (essentially seed or angel) funding, limited options around employee stock options, insolvency laws, lack of access to external commercial borrowing, and the cumbersome Foreign Exchange Management Act (FEMA) are only some of the constraints budding start-ups encounter.

Dans son rapport inaugural, le Forum, à propos de la mondialisation qu'il a symbolisée sous ses formes les plus conquérantes et sûres d'elles-mêmes, évoque avec un sens exquis de l'euphémisme "un risque de désillusion". Mais dans les conversations, c'est autre chose. Désillusion ? Crise ? Inégalités ? D'accord, si vous y tenez, mais enfin, comme nous le dit le très cordial et chaleureux PDG de la banque américaine Western Union, soyons clairs : si on ne paie pas les leaders comme ils le méritent, ils s'en iront voir ailleurs. Et puis, capitalisme, ça veut dire quoi ? Si vous avez 100 dollars d'économies et que vous les mettez à la banque en espérant en avoir bientôt 105, vous êtes un capitaliste, ni plus ni moins que moi. Et plus ces capitalistes comme vous et moi (il a réellement dit "comme vous et moi", et même si nous gagnons fort décemment notre vie, même si nous ne connaissons pas le salaire exact du PDG de la Western Union, pour ne rien dire de ses stock-options, ce "comme vous et moi" mérite à notre sens le pompon de la "brève de comptoir" version Davos), plus ces capitalistes comme vous et moi, donc, gagneront d'argent, plus ils en auront à donner, pardon à redistribuer, aux pauvres. L'idée ne semble pas effleurer cet homme enthousiaste, et à sa façon, généreux, que ce ne serait pas plus mal si les pauvres étaient en mesure d'en gagner eux-mêms et ne dépendaient pas des bonnes dispositions des riches. Faire le maximum d'argent, et ensuite le maximum de bien, ou pour les plus sophistiqués faire le maximum de bien en faisant le maximum d'argent, c'est le mantra du Forum, où on n'est pas grand-chose si on n'a pas sa fondation caritative, et c'est mieux que rien, sans doute "(vous voudriez quoi ? Le communisme ?"). Ce qui est moins bien que rien, en revanche, beaucoup moins bien, c'est l'effarante langue de bois dans laquelle ce mantra se décline. Ces mots dont tout le monde se gargarise : préoccupation sociétale, dimension humaine, conscience globale, changement de paradigme… De même que l'imagerie marxiste se représentait autrefois les capitalistes ventrus, en chapeau haut de forme et suçant avec volupté le sang du prolétariat, on a tendance à se représenter les super-riches et super-puissants réunis à Davos comme des cyniques, à l'image de ces traders de Chicago qui, en réponse à Occupy Wall Street, ont déployé au dernier étage de leur tour une banderole proclamant : "Nous sommes les 1%". Mais ces petits cyniques-là étaient des naïfs, alors que les grands fauves qu'on côtoie à Davos ne semblent, eux, pas cyniques du tout. Ils semblent sincèrement convaincus des bienfaits qu'ils apportent au monde, sincèrement convaincus que leur ingénierie financière et philanthropique (à les entendre, c'est pareil) est la seule façon de négocier en douceur le fameux changement de paradigme qui est l'autre nom de l'entrée dans l'âge d'or. Ça nous a étonnés dès le premier jour, le parfum de new age qui baigne ce jamboree de mâles dominants en costumes gris. Au second, il devient entêtant, et au troisième on n'en peut plus, on suffoque dans ce nuage de discours et de slogans tout droit sortis de manuels de développement personnel et de positive thinking. Alors, bien sûr, on n'avait pas besoin de venir jusqu'ici pour se douter que l'optimisme est d'une pratique plus aisée aux heureux du monde qu'à ses gueux, mais son inflation, sa déconnexion de toute expérience ordinaire sont ici tels que l'observateur le plus modéré se retrouve à osciller entre, sur le versant idéaliste, une indignation révolutionnaire, et, sur le versant misanthrope, le sarcasme le plus noir. (p. 439-441)

Unlike in the United States, there are no rock-star CEOs with nine-figure stock option payouts in Korea.