The Original Profit-Taker
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#1 'LIVE' Choice (December 2008)
First posted on Mon., December 1, 2008.
Based on closing prices of Fri., November 28, 2008.
EVERGREEN SOLAR 4% OF 2013
NEWS FLASH - Friday, November 27, 2009
Evergreen scores its fifth goal on the downside
This is one of our 'Live' example of the one-third Profit-Taker Strategy.
.O.K. Gamers, What's Our Next Step?
(Scroll down this page to 'The Profit-Taker Game Plan')
Cancel all previous orders of Evergreen solar.
Place 2 new orders with your broker. One on the immediate upside. The other on the immediate
1. Sell short 1294 shares of Evergreen Solar at 2.75.
2. Cover ('buy-in') 1294 shares of Evergreen Solar at 0.
We're all set now to further ride the fluctuations of the stock market.
Gamers! To verify current price, click here
In a Nutshell
2008 Orders Filled Profit (Loss)
December 1 One third Profit-Taker Strategy set up
94 bonds at $318.80 each
2588 common shares sold short at 2 3/4
January 2 1294 shares sold short at 3 1/2 $970.50
(Profit 'locked-in' = $970.50 per game plan)
January 14 1294 shares covered at 2 3/4
(Realized profit = $970.50 per game plan)
February 19 1294 shares covered at 1 3/8 $1779.25
(Realizes profit = $1779.25 per game plan)
June 11 1294 shares sold short at 2 3/4
(Realized profit = $1779.25 per game plan)
November 27 1294 shares covered at 1.375 $1779.25
(Profit realized = $1779.25 per game plan)
May 3 94 bonds sold at $562.50 each
1294 common shares covered at $1.13 each.
'LOCKED-IN' PROFIT TO DATE: 70%
(Based on our game investment of $15,000 plus a conservative 50% margin of $15,000)
Margin increased to 50% / Oct. 16,2009
THE PROFIT-TAKER GAME PLAN
(Evergreen Solar Common Stock)
Stock Price ($)
5 1/2 Long-term Goal (Uptrend)
4 7/8 Sub Goal 3 (Uptrend)
4 1/8 Sub Goal 2 (Uptrend)
3 1/2 Sub Goal 1 (Uptrend)
2 3/4 Initial Purchase Price
*1 3/8 Sub Goal 1 (Downtrend)
0 Long-term Goal (Downtrend)
*Underlined blue is price of last 'filled' trade.
Gamers! To verify current price, click here.
Please Note Well:
In the beginning on Dec.1, 2008...
We bought 94 bonds. CALCULATION: $30,000 ($10,000 of which is margin) divided by $318.80 (price
of a convertible bond) = 94 bonds.
Total investment = $29967.72
We started plan as a one-third hedge. That is, sold short 12.519 shares per convertible bond, for a total
2588 shares sold short.
CALCULATION: 94 bonds x 82.599 shares per bond = 7764 shares. So a one third-hedge is 1/3 of
7764 or 2588 shares sold short.
Always sell short 1294 shares on each move to an upside sub goal. That is, there are now 5176
shares represented by the convertible bonds. not covered as yet by a short sale. Now divide these by
the 4 upside sub goals = 1294.
Always cover ('buy in') 1294 shares on each move to a downside goal.(That is,
2588 shares sold short divided by the 2 downside sub goals).
(That is. 2588 shares sold short divided by the 2 downside sub goals)
Gamers! Why is our long term goal on the upside set at 60% in the 'Live' #1 Choice (Nov.)...and then
at 100% in this 'Live' #1 Choice (Dec.)?
It's a random decision. However, I've found that a long term goal of 60% of the initial purchase price is
reasonable. It allows for considerable action between our sub goals, while producing substantial
profits after paying all expenses.
In this 'Live' #1 Choice (Dec.), the premium is 40%. So in order to fully protect our profits on the upside,
the premium of 40% was added on to make the long term goal 100% of the initial purchase price.
It does NOT mean the premium will necessarily evaporate as the convertible bonds increase in value.
On the contrary, this extra percentage acts like an 'insurance policy' against loss.
Follow along gamers! This 'Live' #1 Choice (Dec.) was chosen because it has the potential to be truly
informative and entertaining.
CONVERTIBLE BOND FACTS:
(Evergreen Solar 4 % of 2013)
CONVERTIBLE PRICE : 31.88% or $318.80
NUMBER OF SHARES: 82.559 per bond
CONVERSION VALUE : 22.70% or $227.04
PREMIUM : 40.02 %
TERM CHANGE: No call price
MATURITY: June, 15, 2027
CURRENT YIELD : 12.55%
ISSUE SIZE: $ 325.0 MILLION
INTEREST PAYMENT DATES: Jan. 15 and June. 15
CALL PRICE: No call price
UNDERLYING COMMON STOCK FACTS:
HI (52 WEEKS): $18.85
LO (52 WEEKS): $1.89
VOLATILITY (%) (52 WEEKS): 621.25%
HI (LAST 3 MONTHS): $9.48
LO (LAST 3 MONTHS): $2.04
VOLATILITY (%) (LAST 3 MONTHS): 272.53%
HI (PREVIOUS 10 DAYS): $2.91
LO (PREVIOUS 10 DAYS): $2.04
VOLATILITY (%) (PREVIOUS 10 DAYS): 31.87%
MARKET CAPITAL: $450.11 MILLION
NATURE OF BUSINESS:
Evergreen Solar, Inc. develops, manufactures and markets solar power products. The Company’s
revenues are primarily derived from the sale of solar modules.
Its products are sold primarily in the United States, Germany and Korea.
Company Official Website: http://www.evergreensolar.com
(Evergreen Solar 4% of 2013)
100% Ideal Rating
Is the premium of the bond under 20%? 10% 2%
Of the situations being considered, how does
the volatility of this common stock compare
with the other candidates? 50% 50%
Is the market price of the convertible bond
under $1000 (par value)? 10% 10%
Does the yield (%) paid by the bond, less the
common stock yield, at least offset the interest
paid to your broker for margin privileges? 5% 5%
Does the company pay dividends on the 10% 10%
( The investor must pay declared dividends on short sales).
Is there a record of convertible premiums? 5% 2%
Does the company have assets in excess of the
face value of the bonds? 5% 5%
Is the company in an industry in which there is
a possibility of growth? 5% 5%
RECENT EVENTS POSSIBLY INCREASING VOLATILITY:
Evergreen Solar signs two new contracts totaling more than 160 megawatts.
A megawatt is a unit for measuring power that is equivalent to one million watts.
An example of a megawatt would be the amount of energy produced by about ten
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