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ValueXVail 2013 - Erik Kobayashi-Solomon

ValueXVail 2013 - Erik Kobayashi-Solomon

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Published by VitaliyKatsenelson

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Published by: VitaliyKatsenelson on Jul 13, 2013
Copyright:Attribution Non-commercial


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Value Investing with Options
VALUEx Vail 2013
Erik Kobayashi-Solomon
IOI, LLC | www.IntelligentOptionInvestor.com
 Three Questions
What are options and why do value investors hate them?
What can the option market tell an investor about stock valuations?
How can understanding options tilt the risk / reward equation in one’s favor?
© 2013 IOI, LLCwww.IntelligentOptionInvestor.com
 Morale of the Story 
  An intelligent investor using rational valuation methodology always has an edge over mechanically-determined,EMH-based market valuations
Buffett hates options
“I view derivatives as time bombs, both for the parties that deal in them and the economic
system. Basically these instruments call for money to change hands at some future date, with theamount to be determined by one or more reference items, such as interest rates, stock prices, orcurrency
 --Warren Buffett (2002)
InsuranceManufacturing, service,and retailingRailroadInvestment and derivativegains / lossesUtilitiesFinance and financialproducts
selling putoptions
is Berkshire
Hathaway’s biggest business,
accounting for 30% of corporate profit in 2012
© 2013 IOI, LLCwww.IntelligentOptionInvestor.com
…Or does he?

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