ajtj's Post-Lobotomy Market Charts and Thoughts Message Board

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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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ajtj99

Lee Lichterman III

To: Sultan who wrote (52198)	2/17/2022 3:20:36 PM
From: Sun Tzu	2 Recommendations of 97912

JNJ used to have this big problem with their pension promises. We fixed it via structured derivatives such that they effectively did a buyback financed with puts on their own shares. My GF at the time had a structured derivatives desk (she later headed the structured derivatives for the company in China). Anyways, I remember she came home happy explaining the JNJ problems and posed the challenge to me. To her disappointment, I answered her right away, which made her jaw drop. She said that it took them more than an hour to come up with that structure...maybe I missed my calling. Anyways, my point to you is that there are ways of closing that gap in either up or down markets. The two requirements are (1) limiting the risk, and just as importantly, (2) making it politically correct and legally acceptable so that you are not coming across as shorting your own stock. They are both hard, but the #2 part is harder.

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