The Original Profit-Taker |
The Greatest Game on Earth or TM "Why should the billionaires have all the fun?" The ‘Game' in a nutshell Professor Smarba supplies ‘the team’. The stock market supplies the action. The experience empowers you. #1 'LIVE' Choice (January 2009) (First posted on Mon., January 5, 2009. Based on closing prices of Fri., January 2,2009) ALPHA NATURAL RESOURCES INC., 2.375 OF 2015 |
Breaking News - December 16, 2009
Alpha scores eighth and final goal...
increasing the annual profit to 70%!
Our Alpha Natural Resources scored again today
Alpha Natural Resources is a leading supplier of high-quality Appalachian coal to electric
utilities, steel producers and heavy industry.
(The interest received on the bond is not included in this calculation.)
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O.K. Gamers, What's Our Next Step?
(Scroll down this page to 'The Profit-Taker Game Plan')
Place 3 orders with your broker. One on the immediate upside. The other on the immediate
downside.
They are:
1.Cancel all previous orders of Alpha Natural. (We don't want any surprises.)
2. Sell the 46 bonds at the current price of $1087.59. (premium 40%)
3. Cover ('buy-in') all 842 shares of Alpha Natural at $42.80.
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In a Nutshell
2009 Orders Filled Profit (Loss)
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January 5 One third Profit-Taker Strategy set up.
46 bonds at $643.80 each.
281 common shares sold short at $18.38.
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May 4 140 shares sold short at $24.40 $842.80
('Locked-in' profit)
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May 6 140 shares sold short at $30.42 $1685.60
('Locked-in' profit)
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May 14 140 shares covered (bought-in) at $24.40
(Realized profit = $1953 per game plan)
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June 1 140 shares sold short at $30.42 $842.80
('Locked-in' profit)
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June 22 140 shares covered (bought-in) at $24.40
(Realized profit = $842.80 per game plan)
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July 21 140 shares sold short at $30.42 $842.80
'Locked-in' profit
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August 13 140 shares sold short at $36.44 $2528.40
Locked-in profit
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December 16 140 shares sold short at $42.46 $3371.20
Locked-in profit
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December 16 Sell the 46 bonds at the current price of $1087.59. (premium 40%)
Cover ('buy-in') all 842 shares of Alpha Natural at $42.80.
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FINAL SCORE
TOTAL ANNUALIZED
'LOCKED-IN' PROFIT TO DATE: 70%
(Based on our game investment of $15,000 plus a conservative 50% margin of $15,000)
Margin increased to 50% / Oct. 16, 2009
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THE PROFIT-TAKER GAME PLAN
(Alpha Natural Resources Inc., Common Stock)
FINAL SCORE
Common
Stock Price ($)
*42.46 Long-term Goal (Uptrend)
36.44 Sub Goal 3 (Uptrend)
30.42 Sub Goal 2 (Uptrend)
24.40 Sub Goal 1 (Uptrend)
18.38 Initial Purchase Price
9.19 Sub Goal 1 (Downtrend)
0 Long-term Goal (Downtrend)
*Underlined blue is price of last 'filled' trade.
Gamers! Click here to verify current prices.
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Please Note Well:
In the beginning on Jan. 5, 2009...
We bought 46 bonds. CALCULATION: $30,000 ($10,000 of which is margin) divided by $643.80
(price of a
convertible bond) = 46 bonds.
Total investment = $29614.80
We started plan as a one-third hedge.
CALCULATION:
46 bonds x 18.296 shares per bond = a total of 842 shares. So a one third-hedge is 1/3 of 842
or 281 shares sold short.
Always sell short 140 shares on each move to an upside sub goal. That is, the 561 shares
represented by the convertible bonds are not as yet covered by a short sale.
Now divide this number by the 4 upside sub goals which then equals 140.
Always cover ('buy in') 140 shares on each move to a downside goal. (That is,
281 shares sold short divided by the 2 downside sub goals).
Do you feel a bit at sea? Perfectly natural. Try again. It's worth it.
Based on my long experience in teaching finance, I can say with confidence, that it is highly
probable that the chapter and verse of the Profit-Taker become clear-cut.
This is particularly true as you experience the effects of the actions in The Greatest game on
Earth.
This appreciation can make you a medal winner.
It will all come clear once this stock becomes electrifying...up or down. And it will!
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Gamers! Our long term goal on the upside is set at 60% in the 'Live' #1 Choice (Nov./08).
Then it is set at 100% in the 'Live' #1 Choice (Dec.08).
Now the long term goal is set at 131% in the current 'Profit-Taker Game Plan' (#1 "Live'
Choice,Jan./09).
What's 'a happening'?
It's still a random decision.
In this 'Live' #1 Choice (Jan./09), the premium is 131%. This fully protects our profits on the
upside. The premium of 91% was added on to the already existing 40% on the initial purchase
price.
This is in order to make the long term goal a total of 131%.
Extraordinary? Yes. However, this situation of Alpha Natural Resources is extraordinary.
We realize that we have a an important criterion about the premium on the bond, that is, that it
be under 20%.
.
This is the alloted 10% portion of the the 'Suggested 100% Ideal'.
But, the volatility of Alpha Natural Resources common stock is exceptioinal. For example it is an
exceptional 572% for the past 52 weeks.
The criterion for volatility of the common stock is deliberately assigned a whoping big 50%. This
is to emphasize the importance of volatility.
Again it does NOT mean this premium in dollar value will necessarily evaporate as the
convertible bonds increase in value. On the contrary, this extra percentage acts like an
'insurance policy' against loss.
This issue of Alpha Natural has a history of substantial premiums.
Roll out the red carpet for the bonus premium we'll receive at the conclusion of our plan.
This is a 'page one' issue and will be discussed in further detail in later issues, as the action of
Alpha Natural common stock unfolds.
Follow along gamers! This 'Live' #1 Choice (Jan./09) was chosen because it has the potential to
be truly informative and entertaining.
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CONVERTIBLE BOND FACTS:
(Alpha Natural Resources 2.27% of 2015)
CONVERTIBLE PRICE : $643.80 or 64.38%
NUMBER OF SHARES: 18.296 per bond
CONVERSION VALUE: $336.28 or 33.628 %
PREMIUM : 91%
TERM CHANGE: None
MATURITY: April 15, 2015
EXCHANGE: OVER-THE-COUNTER
CURRENT YIELD : 3.7%
ISSUE SIZE: $ 277.5 MILLION
INTEREST PAYMENT DATES: April 15 and October 15
CALL PRICE: No call price
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__
UNDERLYING COMMON STOCK FACTS:
(Alpha Natural Resources)
PRICE:
$18.38
HI (52 WEEKS):
$119.30
LO (52 WEEKS):
$13.93
VOLATILITY (%) (52 WEEKS):
573 %
HI (LAST 3 MONTHS):
$42.79
LO (LAST 3 MONTHS):
$14.68
VOLATILITY (%) (LAST 3 MONTHS):
153 %
HI (PREVIOUS 10 DAYS):
$2.91
LO (PREVIOUS 10 DAYS):
$2.04
VOLATILITY (%) (PREVIOUS 10 DAYS):
31.87%
EXCHANGE:
New York
MARKET CAPITAL:
$1.30 BILLION
DIVIDEND:
NIL
SYMBOL:
ANR
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NATURE OF BUSINESS:
Alpha Natural Resources is a leading supplier of high-quality Appalachian coal to electric utilities, steel
producers and heavy industry.
Company Official Website: http://www.alnr.com
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PROFIT-TAKER CHECKLIST
(Alpha Natural Resources)
Suggested Actual
100% Ideal Rating
Is the premium on the bond under 20%?
10% 10%
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 stock?
( The investor must pay declared
dividends on short sales).
10% 10%
Is there a record of convertible premiums?
5% 5%
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%
TOTAL:
90%
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RECENT EVENTS POSSIBLY INCREASING VOLATILITY:
There are 8 "buy" or better recommendations on ANR, compared to just 3 "hold" or worse
opinions.
This is according to Zacks, a leading investment research firm focusing on stock analysis for the
individual
investor.
NOTIFICATION
The Profit-Taker Copyright 1978, 1980,1986, 2009
All rights reserved
Permission granted for personal and educational use only. .
Any unauthorized fund management and/or investment newsletter advice or advisory service
utilizing this intellectual property/concept as their own will constitute an infringement of this
copyright.
All rights are reserved to take any action available to recoup all resulting financial proceeds and
damages therefrom awarded by the appropriate court in breach of this copyright.
DISCLAIMER
This game or website is not an endorsement of any security.
Information contained in this Website and attachments is of a general nature only and is not
intended to constitute advice for any specific situation. The terms of referral bonuses may vary
and are only applicable in the states and provinces for which they are approved. Advice from a
suitably qualified professional should always be sought in relation to any particular matter or
circumstance.
The Profit-Taker Copyright 1978, 1980,1986, 2009
All rights reserved
Permission granted for personal and educational use only. .
Any unauthorized fund management and/or investment newsletter advice or advisory service
utilizing this intellectual property/concept as their own will constitute an infringement of this
copyright.
All rights are reserved to take any action available to recoup all resulting financial proceeds and
damages therefrom awarded by the appropriate court in breach of this copyright.
DISCLAIMER
This game or website is not an endorsement of any security.
Information contained in this Website and attachments is of a general nature only and is not
intended to constitute advice for any specific situation. The terms of referral bonuses may vary
and are only applicable in the states and provinces for which they are approved. Advice from a
suitably qualified professional should always be sought in relation to any particular matter or
circumstance.
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