The Original Profit-Taker
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TM
| or "Why should the billionaires have all the fun?"TM The ‘Game' in a nutshell Professor Smarba supplies ‘the team’. The stock market supplies the action. The experience empowers you. ___________________________________________________________________________ #1 'LIVE' Choice for January 2010 (First posted before market opening on Mon., January 11, 2010. Based on closing prices of Fri., January 8, 2010.) Micron Technology, 1.875% of 2014 This #1 Choice is a true learning experience! There is only one thing more painful than learning from experience and that is not learning - - Norwegian proverb |
________________________________________________________________________
2010 Orders Filled Profit (Loss)
________________________________________________________________________
January 11
Buy 39 bonds at $983 each
Sell short 1370 common shares at $11.10.
(Based on our game investment of $15,000 plus an additional conservative 50% margin of
$15,000)
______________________________________________________________________________
May 6
457 shares covered (bought in) at $7.40 $1690.90
(Realizes profit = $1690.90 per game plan)
_____________________________________________________________________________
February 4
457 shares sold short at $11.10.
($1690.90 profit locked in)
_____________________________________________________________________________
TOTAL ANNUALIZED PROFIT 36%
______________________________________________________
THE PROFIT-TAKER GAME PLAN:
Micron Technology
Common
Stock Price ($)
17.76 Long-term Goal (Uptrend)
15.54 Sub Goal 2 (Uptrend)
13.32 Sub Goal 1 (Uptrend)
*11.10 Initial Purchase Price
7.40 Sub Goal 1 (Downtrend)
3.70 Sub Goal 2 (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 January 11, 2010.
We bought 39 bonds. CALCULATION: $30,000 ($15,000 of which is margin) divided by $779.97
(price of a convertible bond) = 39 bonds (rounded off).
Total investment = $30419
We start our plan as a half-hedge. That is, we sell short half the shares represented by our 39
bonds which equals a total of 1370 shares sold short.
CALCULATION: 39 bonds x 70.268 shares per bond = 2740.45 shares. So a half-hedge is ½ of
2740 or 1370 shares sold short.
Always sell short 457 shares on each move to an upside sub goal. That is, 1370 shares sold
short, divided by the 3 upside sub goals = 457.
Always cover ('buy in') 457 shares on each move to a downside goal. That is, 1370 shares sold
short divided by the 3 downside sub goals = 457.
________________________________________________________________________
CONVERTIBLE BOND FACTS:
Micron Technology 1.875% of 2014
CONVERTIBLE PRICE : 98.25% or $982.50
NUMBER OF SHARES: 70.268 shares per bond
CONVERSION VALUE : 78.00% or $779.97
PREMIUM : 26%
TERM CHANGE: 0
MATURITY: June 1, 2014
EXCHANGE: Over-the-Counter
CURRENT YIELD : 1.84 %
ISSUE SIZE: $ 1135.00 MILLION
INTEREST PAYMENT DATES: June 1 and December 1
CALL PRICE: 100.00 (valid until June 6 2011)
CUSIP : 595112AH6
INDUSTRY: Semiconductor
_______________________________________________________________________
UNDERLYING COMMON STOCK FACTS:
Micron Technology
PRICE: $11.10
HI (52 WEEKS): $11.34
LO (52 WEEKS): $2.55
VOLATILITY (%) (52 WEEKS): 79 %
HI (LAST 3 MONTHS): $11.31
LO (LAST 3 MONTHS): $10.56
VOLATILITY (%) (LAST 3 MONTHS): 6.7%
EXCHANGE: New York
MARKET CAPITAL: 9.43 Billion
DIVIDEND: NIL
SYMBOL: MU
_______________________________________________________________________
NATURE OF BUSINESS
Company Official Website: www.miron.com
_______________________________________________________________________
2010 Orders Filled Profit (Loss)
________________________________________________________________________
January 11
Buy 39 bonds at $983 each
Sell short 1370 common shares at $11.10.
(Based on our game investment of $15,000 plus an additional conservative 50% margin of
$15,000)
______________________________________________________________________________
May 6
457 shares covered (bought in) at $7.40 $1690.90
(Realizes profit = $1690.90 per game plan)
_____________________________________________________________________________
February 4
457 shares sold short at $11.10.
($1690.90 profit locked in)
_____________________________________________________________________________
TOTAL ANNUALIZED PROFIT 36%
______________________________________________________
THE PROFIT-TAKER GAME PLAN:
Micron Technology
Common
Stock Price ($)
17.76 Long-term Goal (Uptrend)
15.54 Sub Goal 2 (Uptrend)
13.32 Sub Goal 1 (Uptrend)
*11.10 Initial Purchase Price
7.40 Sub Goal 1 (Downtrend)
3.70 Sub Goal 2 (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 January 11, 2010.
We bought 39 bonds. CALCULATION: $30,000 ($15,000 of which is margin) divided by $779.97
(price of a convertible bond) = 39 bonds (rounded off).
Total investment = $30419
We start our plan as a half-hedge. That is, we sell short half the shares represented by our 39
bonds which equals a total of 1370 shares sold short.
CALCULATION: 39 bonds x 70.268 shares per bond = 2740.45 shares. So a half-hedge is ½ of
2740 or 1370 shares sold short.
Always sell short 457 shares on each move to an upside sub goal. That is, 1370 shares sold
short, divided by the 3 upside sub goals = 457.
Always cover ('buy in') 457 shares on each move to a downside goal. That is, 1370 shares sold
short divided by the 3 downside sub goals = 457.
________________________________________________________________________
CONVERTIBLE BOND FACTS:
Micron Technology 1.875% of 2014
CONVERTIBLE PRICE : 98.25% or $982.50
NUMBER OF SHARES: 70.268 shares per bond
CONVERSION VALUE : 78.00% or $779.97
PREMIUM : 26%
TERM CHANGE: 0
MATURITY: June 1, 2014
EXCHANGE: Over-the-Counter
CURRENT YIELD : 1.84 %
ISSUE SIZE: $ 1135.00 MILLION
INTEREST PAYMENT DATES: June 1 and December 1
CALL PRICE: 100.00 (valid until June 6 2011)
CUSIP : 595112AH6
INDUSTRY: Semiconductor
_______________________________________________________________________
UNDERLYING COMMON STOCK FACTS:
Micron Technology
PRICE: $11.10
HI (52 WEEKS): $11.34
LO (52 WEEKS): $2.55
VOLATILITY (%) (52 WEEKS): 79 %
HI (LAST 3 MONTHS): $11.31
LO (LAST 3 MONTHS): $10.56
VOLATILITY (%) (LAST 3 MONTHS): 6.7%
EXCHANGE: New York
MARKET CAPITAL: 9.43 Billion
DIVIDEND: NIL
SYMBOL: MU
_______________________________________________________________________
NATURE OF BUSINESS
- Micron Technology, Inc. is a global manufacturer and marketer of semiconductor
devices.
Company Official Website: www.miron.com
_______________________________________________________________________
Is the premium on the bond under 20%? 10% 2%
Of the situations being considered, how does 50% 35%
the volatility of this common stock compare
with the other candidates?
Is the market price of the convertible bond 10% 10%
under $1000 (par value)?
Does the yield (%) paid by the bond, less the 5% 5%
common stock yield, at least offset the interest
paid to your broker for margin privileges?
Does the company pay dividends on the stock? 10% 10%
( The investor must pay declared
dividends on short sales).
Is there a record of convertible premiums? 5% 5%
Does the company have assets in excess of the 5% 5%
face value of the bonds?
Is the company in an industry in which there is 5% 5%
a possibility of growth?
TOTAL: 100% 77%
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