A woman walked up to JJ Kinahan at a bar once.
It was me, Tom Sosnoff, JJ, Steve Quirk and Tony Battista, the crew that ran thinkorswim, waiting on dinner at a place called Blue Smoke. She puts her hand on JJ and says, “Oh my gosh, JJ Kinahan. I saw you on CNBC earlier today.”
JJ looks at her, looks at me, looks at Tony, and goes, “You assholes.”
He knew in a split second. Tony had set the whole thing up on his way to the bathroom, and JJ knew because that can never happen in the real world.
Billionaire Or Not, You’re Not That Cool
I couldn’t stop thinking about that story this weekend.
Nvidia’s board opened an investigation into Jensen Huang after he admitted an affair with a woman reported to be a suspected Chinese spy.
I traveled all over the world for 15 years, a lot of it through Southeast Asia. When a stranger like that walks up to you, either something’s for sale or you’re an asset. It’s like day one training on the road.
So, Jensen, billionaire or not, it still can’t happen in the real world. Big guy, you’re not that cool.
Is she a Chinese spy? “Maybe. It doesn’t matter.”
Why I’d Fire Him
Ask most people whether Jensen makes it through this, and the knee-jerk answer is yes. I give him maybe a 60% chance. That ain’t that high.
I’ve been in a multitude of board meetings, and I’m going to tell you how a board thinks. You can’t have your CEO compromised. “I would fire his ass in a second,” and if this board doesn’t, I think the board eventually gets canned too.
Now, there’s a fair counterargument. He built the thing. Even compromised, can he still lead Nvidia better than somebody else? It’s kind of an arrogant question to ask, but it’s a fair one.
Either way, I don’t like the future of Nvidia. This morning the S&P was up 1% and the Nasdaq was up almost 2%, and Nvidia was down almost 7%. The money was flowing from one hand to the other.
Price The Risk Before It Prices You
You can’t trade the board’s decision. You can trade the volatility around it. And with a $4.7 trillion company weighing on the market like that, you’d better know how big a move the options are pricing in before you step in front of it.
That’s what I’ve put in my volatility training, along with lessons from the rest of the TheoTrade team: how to read the expected move, and how to build a trade where you know your risk before the headline hits.
Learn How I Trade Headline Risk
To your success,
Don Kaufman
P.S. I’ll round my odds on Jensen to 61.8%. He has a Fibonacci chance of making it. If you want to see how I turn odds like that into actual trades, start here.
