does anyone know if this is another naked put newsletter again?
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Sorry, the table did not paste well. Let’s try that again.
Date Price Trades Credit/c P/L Rate of Return
12/17/12 $41.80 STO Dec 12 41 Put
BTO Apr 13 50 Call $ 3 $170 3.9%
1/20/12 $45.49 STO Jan 45 Put $118 $128 1.5%
1/17/13 $48.79 STO Feb 48 Put $216 $320 3.5%
Yikes! If the moderator can fix the table by adding spaces I’d appreciate it.
Do we have any clear winner to this Tease?
I am interested in the ideas and theory behind Stanberry’s Alpha strategy. I don’t mind paying for the report but $1300 just to educate myself!?!! Also, I do not want and would not use the 12 stock tips Porter is offering. IMO, those who follow promoted ideas are often too late to dinner, or worse… the main dish.
Does anyone know what the Anomaly is? What about a proper name or general description of the strategy to point Irreggulars like myself in the right direction for FREE. If this information is not proprietary, (and I have a strong belief it is not), I would hate myself for buying the Special Report… even if the idea made me as much money as Stansberry & Associates are advertising.
Anyhow, this is my first post and wanted to say a quick thanks. I think Stock Gumshoe is a great forum and the only one I use. I am extremely impressed with all the intelligent minds we have on here, the open minded and diverse POV’s, the exposure to free new investment ideas and most importantly I love watching the team breaking down these challenging Teases . I have never bought a subscription to an investment newsletter and with efforts of all the members here… I will never need to.
Great Job!
I posted some guesses about this strategy in a Friday File for the Irregulars a few weeks ago, my conclusion was that he’s selling year-out puts and using some of the premium you get to buy calls at the same expiration. Following is an excerpt from that Friday File, the full note is here:
I believe his ALPHA strategy is really quite simple, but am open to other ideas. Back in December when I first received this teaser, I played around and came close, but not quite there. Having been a Stansberry subscriber for a number of years, I am familiar with his ideas. CBI was at $41.75 when I ran my exercise. I believe the inefficient market anomaly he is talking about is where ATM calls and puts at the same strike price are out of whack. Efficient market theory says that they should both be nearly the same as the probability of the stock going up or down should be the same. CBI’s were out of whack, My notes are a little sloppy, but here goes: I believe he definitely sells an ATM PUT. He likes to sell puts on great stocks that he wouldn’t mind owning. He likes to say if it goes down a little and you are put the stock, you have your up front payment as a cushion, plus you now own a stock you wanted, at a better price. You can now turn around and sell covered calls against that stock if you choose. This is exactly what Eifrig and Clark do with the few stocks that they are put. Obviously, you wouldn’t implement this strategy on a stock that just had a nice run-up as there is too much risk of a correction or pull-back. This strategy is definitely for stocks you expect to rise over the next year. I think he then buys the ATM CALL. What I tried next was selling a higher strike CALL for additional income. In my example, I sold the 2014 JAN 40 PUT for $4.90 and bought the 2014 JAN 40 CALL for $6.60 and lastly sold the 2014 JAN 45 CALL for $4.40. I had a net DEBIT of $3.30, which based on 20% margin worked out to 39.5% upfront income which I believe at the time was what he was advertising. If the stock is at $45 or better come JAN 2014, you make an additional $500 for another 59.8% or a total of 99.3% return on your 20% or $836 margin. That is pretty close to his 100% in a year. If you can open a margin account and only have to put up 20% to make this trade, it looks like a GREAT deal. For myself, that isn’t possible. I’d like some feedback if people agree or disagree with my guess as to what exactly the ALPHA strategy entails. BTW, I’ve subscribed to many newsletter over the years, and overall I find Stansberry’s the best of the lot, understanding that some are better than others. His is the only one I am aware of that gives a report card on its publications. I respect that. Regards, Joe M.
In the file for Irregulars you wrote that the stock price is $45. Then you wrote: “…So you could, for example, sell a put option on CBI at $35 and get income of about $2.20 for that…” I may be missing something but how could you get 2.20 for a sSell Put that is way out of the money?
I viewed the teaser and then recieved a call from a rep at S&A who inadvertantly told me that the Alpha Strategy is buying OTM Calls and selling OTM Puts. He also said that Eifrig’s strategy involves naked Puts. I decided it was over my head at this time and did not subscribe. But Joe Maestro’s explanation sounds very much like what the caller described to me.
Travis Johnson and Joe Maestro have it right.
Fundamentals of the underling stock has to be a winner to make the returns stated.
First you have to do your home work on the underlining asset CBI.
Chicago Bridge & Iron Company N.V. was founded in 1889. 124 years in business.
I guess I’m showing my old age now.
CBI has the expertise in building the LNG Export terminals and CNG worldwide.
Huge speculation that this is next BOOM in energy industry. With speculation comes greed.
Everybody wants CBI to build their Export terminals. They have more work than they can handle which means great earnings = stock appreciation. No regulators holding up Australia from their huge expansion projects.It’s all about who can deliver first and most.
CBI will be around another 100+ years. Try to get a list of publicly traded companies founded in 1800’s. Their are maybe 10 at most. P&G founded in 1837.My point is these companies made it through the great depression and have had to deal with every disaster. They continue to thrive and survive. That will continue and their stocks will continue to appreciate. Yes this is an extremely bullish strategy and will only work with a stock that will report better than expected earnings. I believe CBI will achieve this because nothing stops these cash rich oil companies from going after more market share of an explosive new niche within the oil industry. This is my final post on CBI Alpha strategy.
I’ve done my homework and made my decision and I’ll live with any consequences if any it will be little. I have a 87% batting average. I look to hit singles not home runs.
God bless