The TFM Show: 1/30/2021

Oh my TFM, you are totally dead wrong about options. There comes a time when a man should admit he is simply ignorant on a matter. It is easy to beat the S&P so hard with options. Think of shorting an option as a limit order that you get paid for if it does not go through. That is the right way of seeing it. And typically, options are horribly overvalued for most things, and undervalued for REITs. So for instance, if you would like to buy stock XYZ, but only if you can get it for 45 dollars a share, you might short 45 puts. And if you are shorting too many contracts, that's a problem, and the human way of looking at it might to be to start sweating if it goes into the money and you're behind, but if don't short too many contracts, that just means you'll be getting the stock at a better price than you would have if it stays in the money. You'll either be buying the stock at a great price, or the money you sold the options for will be free money. You also have this idea that's similar to my father's way of looking at it (ok boomer) that gambling is necessarily bad, and that one should not cross the line from investor to gambler. But in fact, if you have the edge on the house (like I do in blackjack), gambling can be quite profitable. The key to being a successful gambler is betting the right size. Knowing which side of the bet has the edge, how big it is, and figuring out the right amount to bet, which is generally actually exactly the size of the edge. Meaning if you have a 1% edge, every dollar risked returning $1.01 on average, the correct amount to bet is 1% of your money. (This is known as the kelly criterion, you can read about it on wikipedia). But of course one needs to be watchful of bets that seem to be independent, but aren't, for instance if amazon goes way down, probably google will go way down since they are similar and crash and rally together, so you wouldn't want to make a large bet on amazon AND on google and mistakenly think they're going to move independently. There have been men through history who have drastically had an edge on the market that puts Warren Buffet to shame, and their downfall has always been when they bet the farm and lost it all. Humans have a propensity for false dichotomies, they go too far in one thing or too far in another when the correct way is something in between and this shows up in investing and gambling by them betting too much.

Holy shit. I love listening to TFM and the panel, but he is (I'm assuming the rest of the panel as well because they didn't correct him) so ignorant on basic physics. Even high school physics is teaching about muons, gluons, quarks, etc.

tfm the finance wizard: "you have to hold untill the option contracts expire" this is really sad man, options are OPTIONAL (word is kindof a giveway) you can walk away from the contract, only thing you loose is the "premium" (price you pay to buy the option)
AGAIN: THIS IS ABOUT SELLING THE PHYSICAL UNDERLYING

I am waiting for tfm to make up shit about physics again (one of his video on QM-) ..he such a specialist when it come to quantum mechanics

NYC, Chicago, London, Zurich, Singapore, are major Financial and banking centers, should be easy for tfm to get a job there with all his finance degrees (*COUGHE*) instead of chillin out in Alaska.