Buying a Swooner … and Making some Guesses about “Stansberry Alpha”

Friday File look at a Idea of the Month pick that dropped this week, and at Porter Stansberry's new options income "Alpha" strategy

By Travis Johnson, Stock Gumshoe, December 21, 2012

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There was big news from one of my personal holdings this week, and it’s also a stock that I’ve suggested twice to the Irregulars and written about several times over the years so I thought it warranted at least a little reaction … particularly because it drove the shares down precipitously. So I’ve bought more Markel (MKL) and may buy more, which I’ll go through in some detail in a moment …

…. but first, since this is the last Friday File of the year (Stock Gumshoe shuts down between Christmas and New Year’s Day) I should take a moment to try to explain a recent ad that hundreds of folks have asked about this week, Porter Stansberry’s Stansberry Alpha teaser. I get long winded when I talk about options (yes, OK, I get long winded at other times too), so this may take a minute, skip ahead if you don’t care and are only interested in Markel.

Here’s how Porter has been pitching this new trading service, which is priced at $2,500 a year:

Porter Stansberry’s ALPHA* Strategy

“A Little-Known Secret of the Options Market that’s so Profitable… We’ve Never Been Willing to Share It…

“*ALPHA has been called “The Single Greatest Investing Secret” in the world’s markets. It allows investors to earn far more than normal stock investments, while actually taking less risk. Most academics will tell you it’s impossible. But the proof is right here…”

You can see the whole presentation here if you’re interested, I won’t go into every detail because he’s not teasing a specific trade on a specific stock this time around, he’s teasing a strategy that he thinks he’ll be able to recommend monthly, over and over, to profit from an “anomaly” in the markets. I’ll just share a wee bit here to give you a taste:

“Alpha is a critical anomaly that could hand you 50% to 100% gains — over and over again — with less risk than almost any trade in the world.

“This anomaly cannot be explained by the “efficient market hypothesis” ….

“I love buying world-dominating, capital-efficient businesses at deep discounts… what I call “no risk” prices.

“I’m talking about companies like Intel, Johnson & Johnson, Exelon, and Hershey.

“These are the kinds of solid stocks you want to grab when the market irrationally sells off… which it does every so often….

“… ...

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