Why is everyone picking on Jamie Dimon?
Him having to report to congress for the $2 billion trading loss can be likened to a straight A student being summoned to the principle’s office and threatened with detention because he got a B on his report.
The media gets a headline and wow do they run with it. I was on the treadmill watching CNBC when I saw a massive amount of paparazzi gathering. I wondered if Justin Bieber was meeting the president again but then realized it was even more ridiculous – they were covering Jamie Dimon as if he were Lindsay Lohan getting out of a car.
Let’s peel off the hype and look at what’s real. The trader who lost $2 Billion was Bruno Iksil, not so affectionately known as the London Whale. His group had posted a net income of $5.09 billion over 3 years.
Take a moment to process that last paragraph. Now think about it again. Jamie Dimon is being vilified. He was summoned by congress. The paparazzi is stalking him and … even with the $2 billion loss, that group is up $3 billion over the last years. So they make an average of $1 Billion a year and they’re getting in trouble? I want that kind of trouble for myself. I have 7 figure goals for a year and this bank is raking in 10 figures.
So 7 figures gets you everything you need and some nice vacations but 10 figures gets you on congress’s radar and “JPMorgan Chase CEO Jamie Dimon told Congress on Wednesday that senior bank executives responsible for a $2 billion trading loss will probably have some of their pay taken back by the company.” Why are they being punished?
Jamie Dimon should own this trade and own this moment. He should look the cameras in the eye and say the following: Yes, we had a loss. So what. That group is still up $3 billion for the last 3 years. We are very profitable for the quarter even with that trade. $2 BIllion to us is $100 to the Average Joe. Bruno Iksil will stay on with us because if we don’t keep him, he will move on and make a trillion for someone else. I am unapologetic because Chase is still a fortress. Furthermore, Adam Mesh says we have the best seats to every sporting event in Manhattan.
Okay, that last line might be unnecessary but it is very true, I have sat in them.
I am not defending Jamie Dimon because I sat in his seats. In fact, I wouldn’t even call this defending him because I’m upset with his defensive, apologetic posturing. I really want to see him own it because if he did, there would be nothing that anyone could say.
In fact, this is what he should say to Congress: Excuse me. Let me stop laughing so I can breathe. You, Congress, are summoning me here today to discuss a $2 Billion trading loss even though we are profitable for the quarter and in perfect financial health. In the time it took me to get it straight, our national debt just increasedby another hundred million. Don’t question me, just sit back, watch and take some notes.
The best part about this whole vilification of Dimon is that it has created opportunities in the JPM stock. Opportunities that my stock market community and I have taken advantage of. Here’s how …
The stock posted a second quarter profit of $4.96 billion but the media was so quick to pound the company that the headlines read: J.P. Morgan Second-Quarter Profit Fell 8.7%.Underneath, it says: Losses on ‘Whale’ Trades Total $5.8 Billion Through Thursday.
The WSJ, Yahoo Finance, New York Times and Bloomberg all pounded the negative which created a buying opportunity at 35.
As technical traders, we focus on the charts and not the misinformation being provided by “experts” with specific agendas. Turning down the volume had been working extremely well in a market that many find difficult.
It’s a constant theme of focusing on readership rather than relevance that steers the average investor in the wrong direction.
Similar opportunities were provided in COH at 50 (now 57) when I referenced it in my article, Why I am Prepared To Lose $1,000 In This Stock
Taking a little extra time to make your own trading decisions can have a very positive impact on your stock market experience.