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October 8th, 2009 at 10:59 am
Is it really true that the US Treasury is going to offer to set up a super-dollar ( gold backed ) currency? Each of the ” gold-backs ” would be backed by one gram of gold, held in storage by US government. Everyone will be able to convert our green-backs to the gold-backs. Is this real?
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October 14th, 2009 at 12:51 pm
You usually recommend a 25% trailing stop. Why not link the trailing stop % to the beta of the stock? A very volatile stock may warrant a higher TS% while a very stable stock might warrant a lower TS%. Does this make any sense to you?
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admin Reply:
October 16th, 2009 at 2:01 pm
Dear Bob,
We recomend a 25% trailing stop because we’ve found that works best for our purposes and those of our larger audience. However, we encourage each individual investor to consider his or her personal preferences, financial capacity and risk-taking level in order to reach a satisfactory answer to any investment question, including for trailing stops.
Investment U Research Team
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October 14th, 2009 at 4:35 pm
Can you tell me if SCLN remains a buy or hold. When it was first recommended on your Market Wake Up Call Video it has dropped about 30%. My impression was that this stock is a Hold for the long term. Thank you.
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admin Reply:
October 16th, 2009 at 2:04 pm
Charles,
SciClone Pharmaceuticals (SCLN) is a Hold in Marc Lichtenfelds Access portfolio.
Investment U Research Team
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October 15th, 2009 at 1:36 pm
can you buy silver with options like you can gold?
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admin Reply:
October 16th, 2009 at 2:00 pm
Dear Ken,
Yes, you can. To trade in silver options, you can go to the New York Mercantile Exchange (NYMEX).
Investment U Research Team
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October 16th, 2009 at 10:16 pm
just wanted to know if you are going to be offering a stock screener any time soon? it would greatly help us doing our own research…. doc brown’s course!!! i would benefit greatly as well as others.
thanks
david eggleton
(ccr)member
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October 18th, 2009 at 6:57 pm
Karim-
Your option and spread discussions in The Oct 15 issue of Investmet U leave me totally confused. I believe, again, there are mistakes in it which makes the reader only more likely not to use options or spreads. In the discussion you state:
“The Stock Buyer: If you buy GG shares outright, you’d make $20 – or 50%. In dollar return terms, that would be $20,000 on a $40,000 investment.
The Option Buyer: If you bought the LEAP option and Goldcorp rises to $60, your return would be $6.70 ($60 minus $40 minus $13.30 -the amount you paid for the option). That’s a dollar gain of $6,700 on $13,330 invested.
Not too bad at all.”
So that means you only make 50% with your leap option on an increase of 100% in the value of the underlying stock? I think that is a mistake. Why is that a better deal than just buying the stock wherein you would make 100% on the sale?
Then, in your discussion about spreads on the same stock, you say that you would make a $14,000 profit on your $6,000 net investment. But you do not explain where the $14,000 comes from. Why do you leave this bit of information out? You only serve to make things even more confusing, defeating your whole purpose of the article. Someone needs to proofread what you guys write. Mistakes and left out information happen way too often.
Bill
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admin Reply:
October 20th, 2009 at 10:36 am
The article clearly states that the first return is from buying a straight option, but that the preferred strategy in this case is to enter into a spread. The spread calculations are shown very clearly – your net outlay is $6,000 with a return potential of $20,000 if the $60 target is reached, leaving you with a NET profit of $14,000 after backing out the cost of the spread:
Having bought the $40 call option for $13.30 and ponied up $13,330 for 10 contracts (1,000 shares), I’d then sell the January 2012 $60 call option against it (LGX-AL).
When you sell an option, you first get money back for selling the option. It also limits your upside to the strike price of the option that you sold ($60).
The $60 call option is trading for $7.30. So…
Buy the January 2012 $40 option. Cost: $13,330
Sell the January 2012 $60 option. Receive: $7,330
Net cost of the trade: $6,000 ($13,330 minus $7,330)
By doing this, we’ve entered into a spread.
The Spread: The spread is the gap between the price at which we can buy GG and where we have to sell GG. In this case, the buy price is $40 and the sell price is $60. So the spread is $20.
The Profit: In dollar terms, our maximum upside is $20,000 ($60,000 minus $40,000 based on 10 contracts or 1,000 shares), with a cost of $6,000. This means if Goldcorp hits $60 or more, we can make $14,000 net profit on a $6,000 outlay. That’s 233% ($14,000 divided by $6,000 cost).
The Risk: What’s more important, though, is that our maximum risk here is limited to the cost of the spread – $6,000. That’s just 15% of the amount that a regular shareholder would have at risk if he bought the shares outright ($6,000 divided by $40,000) and probably much less than the stop-loss that most people would institute on the trade.
I’d much rather risk $6,000 to make $14,000 than $40,000 to make $20,000 in any market, especially this one. And if you dump the $34,000 that you saved by executing the spread trade into an account that earns just 2% interest, you’d offset your cost by a further $900 or so, too.
Good investing,
Karim
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October 19th, 2009 at 2:34 pm
Information obtained through modeling the flow of global currencies suggests the S&P500 will continue to rise to approximately 1,200 or 1,300 buy Dec 15, 2009, then likely level off then correct. Although the rise will continue for the time stated, further analysis beyond Dec 15 likely will need continued updates.
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October 19th, 2009 at 10:51 pm
Alex, HELP!!!
I’m tired of the illiquidity of ADRs and want to buy stocks directly on foreign exchanges, but every brokerage I contact wants $10,000 minimum to open an account? Any ideas?
Yours truly, 3 Children in College
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October 20th, 2009 at 5:34 pm
Lynas Corporation (OTCBB: LYSCF): The company is behind the big Western Australian “rare earth” deposit at Mt. Weld and has seen its shares soar by 141% over the past six months.
~ Avalon Rare Metals (OTCBB: AVARF) and Rare Element Resources (OTCBB: RRLMF)
Yeah but who refines the rare earths for them???
thanks Terry
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October 21st, 2009 at 8:15 am
I am From Singapore and I would like to know how to open and account to trade when I join as member? Could you kindly enlighten me ?
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October 21st, 2009 at 4:02 pm
Do you offer similar advisory services on UK stocks like you do on USA ones? If you do, what services are on offer? Looking forward to your reply. Thanks, Sydney
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Investment U Reply:
October 22nd, 2009 at 9:42 am
Sydney,
We do have a sister publication in the U.K. called Fleet Street Publications. We have sent your question to our customer service representatives and they will forward your questions onto them. You should receive a reply from FSP shortly.
Thank you,
Investment U
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October 21st, 2009 at 8:57 pm
Hi.
I’ve read the information mentioned on the page titled “Why We’re Doubling the Price of Our Top Performing Advisory Service” where it’s mentioned “Alex’s Ultimate Indicator pinpointed Verifone on Wednesday May 27th and Six days later, on June 2nd, Alex sent an alert to close out for a 147% payday.”
I went back on the chart for PAY – Verifone to check and found the following:
Close on May 27th 2009 – 6.96
Close on June 2nd 2009 – 8.18
That’s just 17.53% and not the 147% as mentioned. How that number was achieved ?
Could you also illustrate for China Medical and Motorola, please ?
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Investment U Reply:
October 22nd, 2009 at 2:39 pm
Anderson,
From Alex: The percentage returns you reference apply to a recommended option play on the company not its common stock.
Thank you,
Investment U
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October 22nd, 2009 at 5:51 am
The red highlighting on this site is a mistake. The page is unsettling visually and is too reminiscent of, say, weather alerts or scam mail.
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October 23rd, 2009 at 11:11 am
Option spread – article by Karim Rahimtullah.
I tried to sell call options again the call options I was holding but the broker will not allow me this.
Why is that? Do I need a special account?
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Investment U Reply:
October 23rd, 2009 at 1:41 pm
Samiud,
You don’t need a special account, just permission from your broker. If he does not give it to you, find one that does. Call Greg Long, one of our Oxford Club Pillar One Partners at Gunn Allen Financial, his number is 800-329-1984.
Karim
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October 23rd, 2009 at 12:44 pm
Are you still recommending IMMR for purpose. You wrote something about this recently, but it didn’t really make your recommendations clear.
Thanks, I am enjoying my subscription to your service.
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Investment U Reply:
October 26th, 2009 at 4:28 pm
Suzanne,
Yes, we currently are. Having nearly hit $5 last week, the stock dipped below $4 on Tuesday and is now back to around $4.40.
This morning, the company announced the resignation of Clent Richardson, the CEO who joined them last year. Victor Viegas, the previous long-serving CEO has retaken the helm at Immersion. This leads me to believe that the company’s accounting issue (we’re still awaiting the result of the enquiry) occurred under Richardson’s watch.
Viegas led Immersion through its darkest days during the legal battles with Sony and Microsoft, and was in charge when shares topped $20. He has a reputation of a straight shooter and for the board to bring him back shows that either the accounting problem is more of a recent issue and not a long-standing one… or that Immersion could be readying itself for a sale. Recall last month, activist investor Ramius took a huge position in the company.
Either way, there seems to be something going on behind the scenes at Immersion, which makes it both exciting (as the company is still at the forefront of haptics technology), but also a little unnerving.
Karim
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October 23rd, 2009 at 12:56 pm
Hi Karim,
I thought your article on the “legging into a spread” was excellent.
My questions are – whether this strategy also works for a PUT option, is there any problem in using a shorter time line, and whether there are any downsides to this strategy. Thanks you.
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Investment U Reply:
October 23rd, 2009 at 1:39 pm
Dear Hal,
Yes, it works on put options as well. One must sell a lower strike put. Downsides are limited to what you have at risk. If executed properly, the risk is very, very low and sometimes non-existent. It can work on shorter term options as well, you just have less time in case it doesn’t go in your favor.
Karim
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October 25th, 2009 at 7:19 am
You produce an interesting and informative newsletter but is the ad that you are running for the Texas Oil company stealing oil from the French a bit bogus? The French have their own geologists and oil exploration companies and should be aware of the oil deposit, besides a Swedish company claims to be exploring the same basin.
Thnaks
Al
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October 25th, 2009 at 7:44 am
Interested in investing in silver coins. Your opinion on this topic.
Manny
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Investment U Reply:
October 29th, 2009 at 1:26 pm
Manny,
We believe the best choice for silver investing is through an EverBank Metals Select Account, in which you can buy silver (and gold) at just 1% above the market price. In “unallocated accounts”, your purchased metal is pooled with that of other investors like you, which eliminates storage and maintenance costs. “Allocated” accounts allow you to purchase your own silver and gold – bars and coins – with a custodial fee. Both types of accounts can be set up 24/7 online. We should point out that the publisher of Investment U has a marketing relationship with EverBank, but that’s because its products are best in show.
For more information on silver coins, you can also read http://www.investmentu.com/research/silver-investing.html and http://www.investmentu.com/IUEL/2009/March/the-best-ways-to-buy-gold-and-silver-now.html
Investment U Team
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October 26th, 2009 at 8:30 am
does the isieder investor do it with options or stock buys
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October 27th, 2009 at 4:20 pm
Dear Sir,
Who can I contact for a good broker for the gas
rebate? I hope that you will send me the answer to my email address. Thank you
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October 29th, 2009 at 12:19 pm
Do you have an investment U publication (bulletin or web) in spanish, for Latin american subscribers?
Thank you
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Investment U Reply:
October 29th, 2009 at 1:30 pm
Gabriela,
Unfortunately, we do not have an IU publication in Spanish. But I will send your suggestion to those who make the key decisions. Thank you for your input.
Investment U
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October 29th, 2009 at 2:14 pm
I am a proud Oxford Club Chairman Circle Member and truly appreciate the information I receive via this and other letters from your company. I do receive the vast majority of these communications via blackberry, and it is difficult to read the IU articles on the blackberry due to the formatting. Is there a way to get the article sent in a different format?
Thank you for your attention.
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Investment U Reply:
October 29th, 2009 at 2:33 pm
Justin,
We’ve checked with our web team and they have said to check back to IU in a week or two as they plan on adding a program/plugin that will allow easier reading of IU articles from mobile phones like your blackberry.
Thank you,
Investment U
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November 2nd, 2009 at 6:21 pm
I’m new to options and don’t know how to enter the “code” you sent to recieve the $750.00 payment. Some guidance would be appreciated. Thank you
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November 3rd, 2009 at 1:50 pm
A stock is ex-dividend. If you buy the day before it goes ex-dividend you will receive the dividend as long as you are a holder at the close of trading. The stock price goes down roughly the price of the dividend payed out. Exactly when does the company sell shares to pay for the dividends. Can this occur at any time? Are the market makers able to manipulate the stock the week or month before to raise cash?
Thanks.
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Investment U Reply:
November 4th, 2009 at 2:07 pm
Paul,
Per your question: Companies don’t sell shares to pay dividends. They use the cash on hand.
Thank you,
Investment U
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November 3rd, 2009 at 3:16 pm
While reading Mr. Williams article today regarding the amount of cash pouring into the markets, I found a mistake. He is writing that, in round numbers, 5 trillion has poured into the markets this year. As we started with more than 8 trillion in cash there is still 3 trillion sitting on the sidelines not the 3 billion that he mentions. Thanks.
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November 10th, 2009 at 4:23 pm
Louis Basanese recommended TRIDent selling for less than its cash. Now it appears NXP is buying 60% or $85MM for a mere $45MM cash contribution, diluting existing shareholders’ equity. It seems to me putting this company in liquidation would be a better option for stake holders, as the present cash is worth more than their share price. Any follow-up thoughts on this?
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November 13th, 2009 at 4:24 pm
11/13/09 Re: Dave Fessler’s Report “This Co. is obligated to send you a check….In by Dec 15/09
Is this strictly for Americans or is it/they on the stock exchanges for Canadians and other Countries to also fill in the form.
Love your “newsletters” but could you define when an opportunity is available, if it is strictly for Americans or not?
Thanks for the great articles. I enjoy following along. Learning plenty these days.
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