Today I want to talk about a compelling pairs trade. And it includes two of the hottest names in the internet space.
LinkedIn (Symbol: LNKD) has been one of the most profitable IPO’s of the past couple of years. It’s up more than 300% from its original IPO price of $45 and is up 65% year-to-date.
Facebook (Symbol: FB) on the other hand, hasn’t fared quite as well. After opening with a bang last year, the stock was quickly cut in half. For shareholders, it’s gone from a scary ride to relatively boring one.
Now, first let’s talk about the LinkedIn side of this trade. The amazing thing about LinkedIn’s performance is its valuation. The company is obnoxiously expensive. It currently sells for a mere 1,287 times earnings – that’s a P/E ratio of 1,287. Each dollar of sales for the company is valued at $22.62 by the public market. And its price-to-cash flow is a whopping 160 (no decimal place there).
These are some of the highest multiples I have ever seen. But as you can see investors have completely ignored it.
Now, the only reason LinkedIn is gone up more than 300% since its IPO, and amassed a $20 billion market cap, is due to its massive membership base. LinkedIn has more than 220 million members. And this number has been growing steadily every quarter. With that, the market is valuing each member on LinkedIn at about a $90 per member (220 million X $90 = $19.8 Billion).
But here’s the thing. Less than 2% of LinkedIn’s members ever buy anything!
So in that respect, LinkedIn is not any different than Facebook.
But, let’s consider how the market is valuing the Facebook following …
Facebook has 1.1 billon members and currently has a $67 Billion dollar market cap. So that values each member at about $61.
So let’s recap: LinkedIn members are being valued at $90. Facebook members are being valued at $61.
I’m willing to bet this gap will narrow. In both cases, these companies are showing little aptitude toward monetizing their audience. Yet their followers are being valued at wildly differently levels.
So the best way to take advantage of this valuation gap is pairs trade. A pairs trade is market neutral trade, where you buy one stock and at the same sell short another stock in the same sector (same dollar amounts).
Since they operate in a very similar business environment, there should be little market risk associated with this trade. I win if this valuation gap narrows. I lose it if it widens. I like my chances.
For those of you that don’t know, billionairesportfolio.com is the only website in the world that sends out free real-time text alerts whenever a billionaire investor buys 5% or more of a stock.
Today I’d like to share a new text alert we just sent to our members. Billionaire hedge fund, Jana Partners, a legendary activist hedge fund, just disclosed a 9.2% stake in Oil States International, symbol (OIS).
This is a huge stake in a large cap oil and gas equipment company. My belief is that Barry Rosenstein, the Wharton MBA and head of Jana, will try and break up the company or sell it to the highest bidder. I think the market shares this view. The stock is up more than 4% today.
Jana Partners is just one of the many top performing hedge funds and billionaire investors we follow in my research service, TheBillionaires Portfolio. It’s the only investing service of its kind that allows the everyday investor to participate in the same stock picks as the world’s richest, most powerful investors.
Every week, I scan hundreds of stocks that these exclusive investors are buying, and I only select the ones that have the biggest home-run potential. I define these as stocks that can go up 100% to 200% in a few months, or 500% to 1000% in a year.
Our current portfolio is loaded up with stocks that have the ability to produce these returns. We’ve taken one double off of the table this year, we have two doubles on the books, and I think we’ll have at least one three or four-bagger in the coming months.
Consider this: We currently own a stock that sells for around $2. It has more cash on its balance sheet than the entire company’s market value. And it is owned by one of the world’s best hedge funds. This hedge fund owns 15% of this company, and has been pushing on management to cut costs and increase their profit margins.
Put simply, this fund is imposing its will on the company, to make it profitable. With that, I truly believe since the stock is so undervalued that it could go back to its 2011 high of $10.50. That would be a 400% plus return from this stock’s current share price. That’s 400% upside on a stock that is selling for less than the cash on its balance sheet.
To find out the name of this stock, the symbol, and the hedge fund who owns it, subscribe here.
Also, an update from my previous blog post on Apple …
For those of you that frequently read this blog, you’ll know I’ve been quite bearish on Apple. But I now think Apple has turned the corner. Remember though, Apple is a buy if it closes over $445 to$450 – not trades above that price, but closes above it.
I told you on Friday to sell gold. In fact, my partner, who called the biggest breakdown in the history of gold, told you that the rally back toward 1500 over the past two weeks, gave you a “second chance … a gift, to sell it now!”
Let me repeat: My partner CALLED the crash in gold – ON THIS BLOG (read it here). And he told you on Friday that this bounce was a gift to sell it for the next leg down.
I hope you did. And if you own the gold ETF (GLD), please take my advice: Get out while you can!
Given the extent of disasters and blow-ups we’ve seen in the past five years, even if I did like gold, I wouldn’t want to be holding the gold ETF, wondering if it can withstand a collapse in spot gold and all that comes with it (margin calls, forced liquidations, etc.). So, again, here’s my ultimate warning: Get out while you can.
My partner’s note here on April 26th addresses the fundamental flaws with the gold trade very succinctly. From a performance standpoint, it’s down more than 11% year-to-date and is down more than 13% in the last six months. This may not sound terrible to some, but in comparison to the stock market its devastating, and its the reason you will never be able to retire.
Here’s why …
People who are invested in stocks are up 14% over the last 6 months — up 13% this year alone. If you have followed Wall Street’s guidance, you have bought gold and are likely well underweight stocks. What they don’t tell you is, there is a bigger cost associated with holding gold, other than just the losses you are enduring. It’s called opportunity cost. In short, the money you have in gold is money you could have in stocks. With that, your not just losing 13% in the last six months on your gold investment. Your losing 13% plus the 14% S&P return that your missing. That’s 27% in six months. All just to have an inflation “hedge?” Boy, your expecting a lot of inflation.
Think about it, gold does not pay dividend and its long term annual return over the last 50 years is less than 2%. That’s less than a CD or savings account.
But, listen, I am here to save you again. We’ve told you to get out of gold if your long. And I wanted to help you make you some money. Gold and silver have given us beautiful setups to buy downside options.
However, the horse is out of the barn. The options I was looking at late yesterday afternoon, to share with you in this blog, have already doubled – up more than 100%.
If you want to make money, stick with me. Our advisory service, The Billionaires Portfolio only buys stocks that can go up 2x, 3x … even 10x or more. And we only buy stocks owned by powerful billionaire investors. Why? They impose their will on the companies they buy. They control their own destiny. They control outcomes. We go along for the ride. And I’ve just added a new feature. From time to time, I will be using options to juice the portfolio for bigger gains.
Here in my free blog, I think it’s important to educate you about the markets. I’ve told you to stay away from people that will take your money.
Frankly, I’m tired of watching used car salesman skim money from the masses (that includes brokers, the mutual fund industry and Wall Street). So consider me your broker’s worst enemy.
Also, I’ve told you plenty of ways to make money.
That’s another thing your broker won’t like. He likes to tell you how hard things are, “how dangerous the markets are right now.” That couldn’t be further from the truth.
In my latest posts:
1) I told you to sell Apple until it closes over $445. Apple is down more than 20% year-to-date, and has still has not closed above $445 — even though broader stocks have been making new record highs.
2) I told you to sell gold and silver, and gold an silver stocks. Obviously, this has been a huge home run trade. Many of the leveraged inverse ETFs (ETFs that profit when gold and silver stocks go down) are up more than 100%.
3) I told you to use my secret stock replacement strategy to buy options in some cases instead of stocks. I bought Sprint call options that made over 560% in less than a month and I laid the trade out right in front of you here, from entry to exit.
4) I told you to buy a few juicy small cap stocks (tickers: EGLE, TSL, YGE). Eagle Bulk and Shipping is up almost 100% in two months. This is a stock not an option! Who else has given you a stock that doubles in two months? Seriously!
5) I told you that you should be making 50% a year on your portfolio. If you’re not, you should fire your broker, mutual fund, financial advisor, Wall Street Journal. etc. In fact, it wasn’t me saying it, that was straight from the mouth of Warren Buffett.
6) I told you to buy The Billionaire’s Portfolio. This is my weekly research and advisory service. My members are average investors, just like you.
Listen, my fee to advise institutional investors on hedge fund portfolios is over $50k a year. The minimum investment to invest with a top performing multi-billion dollar financial titan is typically $10 million. That obviously locks the average guy out. Why? There is no reason. The SEC claims they are protecting you. What they are really protecting is Wall Street. Because if you could access real investment strategies that make people rich, you would never buy a crappy mutual fund again. You would never speculate on crappy stocks that newsrags are writing about, or that brokers are pitching.
The Billionaire’s Portfolio is your access to these rich, sophisticated investors. I’ve designed a service, where I give you all of the best stocks that are making billionaires richer every day — for $297 a quarter.
What more can I do for you?
I tell you exactly how the richest, smartest investors on the planet make money for less than what you pay for your cell phone every month.
Plus, my members consistently beat the S&P with less risk. And we don’t invest in boring stocks. We only buy stocks that can be huge winners! That’s the billionaire’s secret. They don’t get rich buying GE.
I’m leading you to water here. It’s up to you to take a drink. To get on board click here.
A couple of weeks ago I posted a note from my partner, one of the best macro traders I know, warning you that a “messy unwind” was in-store for gold. He told you that 1522 in gold was the big breakdown level. Indeed, that was the level that started the purge in the massive gold trade.
He’s telling me today, this unwind is far from over. And he says gold is giving you the “gift of a lifetime!”
He says, “It’s a second chance … a gift, to sell it now!” I couldn’t agree more.
Below is more of his analysis. You should read this carefully …
“You can see in this chart below the ugly breakdown in gold. And you can see the beautiful 61.8% retracement of the breakdown. The sheep-herders (Wall Street, Bill Gross types, financial advisors, mindless financial journalists) have all been working overtime to keep the sheep (mom-and-pop, the average guy, the mindless institutional investor drones) content and optimistic, while riding the sinking gold ship. And they’ve convinced plenty to gobble up more gold here.
With that, we get a text book technical pattern to sell, as you can see in the chart below.
Again, this is the gift. If you have been sucked into this gold trade, get out, while you can. The entire logic behind this gold/hyper-inflation hedge was flawed to begin with and has been proven dead wrong. Five years into the global economic crisis, and trillions of dollars worth of emergency policies extended (from all global central banks) and yet we still teeter on the edge of a deflationary spiral. Why? Because you can’t print your way to demand in a massive global debt crisis. Without demand, there’s no jobs. Without jobs, there’s no wage inflation. Without wage inflation, there’s no credit demand. No credit demand, no inflation. No inflation = Don’t get stuck with gold.”
Bingo.
So why are you holding the bag (of gold), with a massive premium that has been priced-in for a scenario that is proven to be flawed?
Believe me: My friends, some of the smartest hedge fund traders in the business, are laying into this trade (i.e. adding to shorts). Don’t be on the wrong side.
You don’t get rich buying gold. If you want a way to get rich, follow our Billionaire’s Portfolio service.
To become a millionaire, you want to mimic people who have already made millions or billions. And that’s exactly what we do in our advisory service, The Billionaires Portfolio.
We follow the world’s richest, best billionaire investors, and their stock picks. Did you broker or mutual fund buy Blackberry, RIMM, at $8 or better? We did.
Do you ever think your crowd following broker or mutual fund would ever have the guts to buy a stock near its 52 week low, that Wall Street had forgotten about? Of course not. But we did.
As an old hedge fund friend of mine said, a man who is in his 60′s and worth over a $100 million dollars (all self-made), there is no greater scam upon the public then the mutual fund industry or the brokerage industry. It’s the only business where you get paid even if you lose your customers money.
Our advisory service, The Billionaires Portfolio only buys stocks that can go up 2x, 3x … even 10x or more. And we only buy stocks owned by powerful billionaire investors. Why? They impose their will on the companies they buy. They control their own destiny. They control outcomes. We go along for the ride.
Okay, I did this yesterday. And I’m offering it again today. Because I know you need my service, and because I know when people join my service, they don’t leave, I’m happy to give it to you today with zero risk. If for some reason it doesn’t suit you, email me within the first month and we will refund your money in full. So go ahead and get on-board.
Yes I just said that. And you can quote me! If you want to get rich, do not buy Tesla, Facebook or even Gold. Instead buy stocks with no earnings if you want to make 50% a year.
Why would I say something so crazy, so diametrically opposed to broadly accepted theory?
Well, I like to keep things simple, and there is very simple logic behind my statement.
Here it is: The world richest man, Warren Buffett, followed that rule and did so for over 12-years when he ran his hedge fund, becoming one of the richest men in the world.
Don’t take my word for it. Read Buffett’s own words.
This excerpt from an old Businessweek article I’ve had filed away since living in my dorm room says it clearly. Here it is … Warren said, “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance, is selling.
The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million even $10 million. No, I know I could. I guarantee that.”
That is probably my favorite quote in the history of investing. Warren Buffett is saying that if you have less than $10 million to invest, then you should be earning 50% a year in the stock market.
How can Warren Buffett guarantee that he could make 50% a year, if he was investing less than $10 million dollars?
I’m going to tell you.
You may not know this, but Buffett ran a hedge fund in the 1950’s and 1960’s that was hugely successful. He beat the S&P 500 every single year for 12 straight years, and never had a losing year. He averaged around 50% a year in his hedge fund. But It was the size of the assets he was managing that ultimately suppressed his returns (which at 20% annualized are still among the best in history).
So how did Buffett hang a 50% number consistently when he was small. First, when he started investing, he used the classic deep value investing approach he was taught by Ben Graham. I am not going to go into Graham and his deep value investing strategy, there are 100’s of books on it and articles on the internet about it.
But what I will tell you is the way Buffett invested when he ran a small hedge fund, is a lot different than the way he invests today. Buffett, back in his early days, purchased deep value stocks that had asymmetrical risk-reward return scenarios. Let me say that again. He only bought stocks that had asymmetrical risk-reward.
What this means is that he purchased stocks that were so undervalued that they could easily go up 100%, 200% even 1000%. Yet the risk the downside to the stock was minimal or almost nothing.
How is that? The companies he invested in had tons of cash, zero debt, traded below book value, and a lot of times traded below their net cash level (meaning the company had more cash than its entire market cap).
This is the precisely same investing strategy I use in my advisory service, The Billionaire’s Portfolio, and for my own account. In our portfolio, right now, we own at least five stocks that are trading below book value, and have more cash on their balance sheet than the company’s entire market cap. Many of these stocks trade for as little as $2, but once sold for as high as $20.
I know the downside very clearly in these stocks. If they spend much time trading below their liquidation value or book value, or trade much below the cash they have on their balance sheet, a company or investor will step-in, acquire the company, sell all of the assets and pocket the proceeds.
In comparison, Google, Apple and Amazon have huge downside potential – big risk. We have seen how quickly Apple can shed 30% (in 7 months). Google and Amazon in 2007 and 2008 lost 40%. But here’s the big difference. Google, Apple and Amazon have very limited upside. Instead of getting 2x, 3x, even 10x of what you risk (like Buffet says) these blue chip tech stocks could pay you 25% or lose you 50%. I don’t know about you but that’s a bad trade to me.
Consider this: In The Billionaire’s Portfolio, we have a stock that sells $2.06, yet has $2.10 in cash per share and zero debt. The stock is selling for less than its net cash. Remember, net cash means cash minus all debt. So this stock is like buying a CD. It’s all cash. While this stock has NO earnings, it’s been selling assets, which unlocks value in the company. Let me be clear: I don’t care about the company. I just want the stock to go up. And selling assets can make the stock go up. In fact, in this case, with the game-plan that one of my favorite billionaire investors is executing with this company, I expect him to strong-arm this stock right back up to $10, where it was trading just a little over a year ago.
Remember not only do we follow Warren Buffett’s original hedge fund strategy, but we also follow many other Billionaire Hedge Fund Managers with track records just as good or better (50% annualized plus returns) who practice the same assymetrical risk reward type investing strategy.
So think about that risk reward, we own a stock in The Billionaires Portfolio, that has little or no downside but the upside is gives us a chance to make multiples of our money. That’s an investment that can make you rich. But I don’t just do it once. I do it over and over again.
Now, would you rather own a stock like that or Google, Amazon or Apple which you might make 30% on in a year best case, but you could lose 40% if you’re wrong, or the market sells off.
Let me tell you a story about a stock that my boss at the hedge fund I worked at purchased back in 2002. This stock which had no earnings but had $7 in cash and zero debt and sold for around $8, was a little company named Apple. As we all know Apple went on during the next 10 years to be the hottest stock of its generation. My boss by the way who purchased 1 million shares of Apple around $8, well he sold a little early, he sold back in 2007 when Apple hit $200, so he only made a profit of $192 million or 2400% (24 times his money).
So don’t take my word for it, believe my boss who made $100 plus million dollars buying a stock with no earnings, or better yet believe one of the world’s greatest investor, Warren Buffett, who told you that you should be making 50% a year if you have less than $10 million dollars — and the way to do this is to buy deeply undervalued stocks with no earnings.
Now, if you are not making at least 50% a year, and you have less than a $10 million dollar account, Warren Buffett and me, are telling you to fire your Stock Broker, Mutual Fund or any other person who is charging you money and not making you 50% a year.
By the way The Billionaires Portfolio is on pace to put up nearly 50% annualized this year. You need to own only stocks that can go up 2x, 3x … even 10x or more. Because I know you need this service, and because I know when people join this service, they don’t leave, I’m happy to give it to you today with zero risk. If for some reason it doesn’t suit you, email me within the first month and we will refund your money in full. I’ll make this offer today only, for newbies. Right now. So go ahead and get on-board.
You can sign up here… and if you are not satisfied with the service in the first 30 days just email us, call us and we will instantly give you a 100% money back, guaranteed, no questions asked.
As I told you yesterday, Apple is not a buy yet, this stock need to close above $446 to reverse its downtrend, and that’s my friendly reminder for today.
Lesson 2 on becoming a Millionaire
Leverage… That’s right you need to use some sort of leverage in your investing. Every single Billionaire Investor I have studied has used leverage to juice his returns, even the Great Warren Buffett.
Warren Buffett has historically leveraged his portfolio at 160% or 1.6X times his initial investment, I know this sounds complicated, but all this means is if Buffett invests $1 million dollars with leverage it becomes $1.6 Million dollars. I personally invest a $100,000 like $150,000 dollars, using 1.5 times leverage giving me 50% more buying power, and also juicing my returns by more than 50%. Leverage is what I call the real Billionaires Secret.
The recent news that Warren Buffett used leverage shocked a lot of people in the industry, (by the way if you want to read the articles on Buffett using leverage in his stock portfolio (just type in to google Warren Buffett and Leverage and it will pull up many articles including the Economist.com’s).
But I think a lot of people are shocked when they hear that the supposed conservative value investor, Warren Buffett uses leverage, but he does and thats why he beats the pants off mutual funds stock broker and the like.
Why is leverage so important in trading stocks because, if your just average, and you make 10% a year trading stocks in your portfolio, if you leverage your portfolio like Buffett at 1.6 times, you will then actually make 16% a year. And trust me that’s a huge difference when compounded over time.
The one problem with leverage is that most online brokerage firms charge you a very high rate, as high as 8% to trade on margin or use leverage, so at that borrowing rate its very expensive to leverage and probably not worth it. But there is one publicly traded online brokerage firm that only charges you 1.5% to borrow or leverage your stock account. This is the one I use and let me tell you its like getting free money, remember 1.5% is the interest rate they charge you to borrow for one year (its 1.5% for one year0. So if you buy and hold a stock for just 3 months you will only pay 50 basis points one half of one percent, that is virtually nothing. If you want to know the name of this online brokerage firm email me at wmeade@purealpharesearch.com.
Now another Billionaire who is a huge leverage buff is Steve Cohen of SAC Capital, Steve Cohen uses huge leverage up to 8 times or 800%. Again this means if you have a $100,000 account at 8 times leverage you now have an $800,000 account, and obviously your returns go up by 8 times, and you can now see why Mr. Cohen has been able to put up 80% gross annualized returns in his hedge fund for years. Remember even a small account, lets say $10,000 dollars, that returns 80% a year like Mr. Cohen’s hedge fund, would be worth $11 million dollars 12 years, you could basically retire on the beach in 12 years with $11 million dollars.. But here is the catch, Mr. Cohen is a big hedge fund and he can borrow tons of money for little or no cost.
So how does a small or retail investor leverage his stock account up to 8X and potentially return 80% a year well its easy, and I will tell you if you write me at wmeade@purealpharesearch.com
So in summary: Lesson 2, Leverage is the Billionaires and Millionaires Secret, you will never be a Millionaire or Billionaire if you do not use some type of leverage or margin.
I told you yesterday, that Apple will beat earnings and they did. I told you Apple would put their cash to work buy increasing their dividend and increasing their stock buyback they did. I told you the stock would get an initial pop, it did 6%. I told you not to buy the stock unless it went up 10% or more which it hasn’t yet. I told you not to buy the options, because if you did you would have lost all your money, because the options were too expensive and the stock did not move enough to move the options.
Now I am going to make you even more money by telling you to only buy Apple if the stock closes above $446, again do not buy Apple until the stock closes above $446. At a close above $446 we will know that the downward trend in Apple has been broken, and then only then is is safe to dip your toes in the water.
Next I want to tell you a couple of secrets that will make you a millionaire and heck possibly a Billionaire if your patient enough. so here they are get a pen and paper and jot these down I am only going to say these once:
1) You will never ever get rich investing in mutual funds, I promise you the only people who get rich in the mutual fund business are the people who run the funds, Fidelity, American Century, Pimco etc. Why because they don”t care about performance, all they care about is raising as much money as possible for their fund and collecting fees. If you don’t believe me just go to Morningstar.com or any other mutual fund website and look at the long term performance of the average mutual fund heck even the the top performing mutual funds they all stink… Over the last 15 years the average mutual fund has returned 5% a year. yes that’s right a paltry 5% a year.. You want to a free tip you can make 5% a year risk free by investing in treasury bonds, and you can sleep at night never having to worry about the stock market.. Also at 5% a year it would take you over 100 years for you to be able to retire as a millionaire. So please be wary of mutual funds, its probably the oldest and biggest pyramid scheme going.
2) To become a millionaire you must be invested in stocks for the long term. Warren Buffett and Carl Icahn two of the richest men in the world with net worth’s over $20 and $50 billion put almost their entire nest egg into stocks, and both men are well over 75 years old, these men are already extremely wealthy and should be playing it safe but they don’t they invest in stocks only. A good lesson right there.
3) To become a millionaire you want to mimic people who have already made millions or billions. and that’s exactly what we do in the Billionaires Portfolio we follow the world’s richest hedge funds and their stock picks. Did you broker or mutual fund buy Blackberry, RIMM, at $8 or better?, no but we did. Do you ever think your crowd following broker or mutual fund would ever have the guts to buy a stock near its 52 week low, that wall street had forgotten about? Of course not, but we did. As an old hedge fund friend of mine a man who is in his 60’s and worth over a $100 million dollars, all self made, once told me there is no greater scam put upon the public then the Mutual Fund Industry or the Brokerage industry. Its the only business where you get paid even if you lose your customer money, think about, I bet your broker and mutual fund took their full fees and commissions in 2008 when you lost half your retirement account, didn’t they!!!
Previously, on this blog, I told you to buy Coach May $50 call options before they reported earnings. Again, this is my secret stock replacement strategy. Well, I am happy to announce Coach blew out earnings this morning and the stock is up more than 12% already today. If you bought the May $50 Coach call options, you are up 200% today alone. And the options I talked about more than a week ago here at the bilionairesportfolio.com, those options are up 410%.
Now, I tell you this not to gloat, but to show you the power of information and great chart set ups. Here is how I developed this trade idea:
1) I tap into my network of contacts and did my research on some of the world’s best billionaire hedge funds. The latter is the most important step, and the basis of my service The Billionaires Portfolio.
2) After my initial due diligence, I look for great chart patterns. Remember from my previous blog post on Coach, I told you that I do a chart review every day to look for great trading setups. And I told you that I had found an unbelievable chart on Coach.
If you want to learn how to find these great trading setups and make some money along the way check out my website and service at billionairesportfolio.com.
Now, on to everyone’s favorite stock Apple ($AAPL) …
This is the same stock I have been telling you for the last two months to SELL! And I was dead right! Apple has declined by more than 20%, wiping out most of the day traders and option traders in this stock.
Here is a secret that most of you wont believe: I actually like Apple.
I use Apple products and I like the stock, but guess what … I hate the options. Why? Because the number one rule in options trading is this: Only buy cheap options.
And Apple’s options are always expensive. The volatility is always pumped up. So guess what? Even if your right about Apple, and you buy Apple call options, and Apple beats earnings, you still won’t make much if any money. Again, because the options are just too expensive. That is the secret/the tip you need to learn.
Apple’s options are too popular, too expensive even if you know the stock is going up or down. Trust me. Stay away from Apple options.
Now, on to Apple’s earnings …
I DO think Apple will beat earning expectations today. And Apple will also increase its dividend.
This should give the stock a nice one to three day pop of 10% or more. If this occurs, and only if this occurs, would I be a buyer of its stock, but not its options.
So in summary: Apple will beat earnings, will increase its dividend, and the stock will move up by more than 10% or more. If it does, Apple is a buy! And please don’t get burned trading Apple’s options. Just buy the stock instead.
As everyone knows who reads this blog, I use my exclusive database, research and network of contacts to find out what stocks these top billionaire investors and hedge funds are buying and selling.
I have received a lot of emails lately asking me why this is so important. And secondly, I’m asked how I built this extensive network of contacts at the top of the world’s investment industry?
Okay, so first … Why is this information important/why should you follow the lead of some the world’s top hedge funds? It’s a simple answer: they are almost always right and they have long records of generating huge returns. That’s good enough for me.
To put this in perspective, the top 1% of all hedge funds, in terms of performance, have averaged 43% a year over the last 13 years. Let me say that again … my database of the top 1% of all hedge funds in the world, show returns that have averaged a combined 43% a year over the last 13 years. A $20,000 account at 43% a year would be worth over $2 million dollars today!
Next … so how did I build up this extensive database, research process, and network of contacts, to know the holdings at the world’s top hedge funds? Through my 10 years of experience working for one of the top ranked billion dollar hedge funds (founded by a former Goldman Sachs Partner and Harvard MBA). Add to that, during my time in academia, I studied economics and did deep statistical studies on hedge fund returns at some of the most prestigious schools in the world, Johns Hopkins University and The University of Chicago.
So with that being said, here’s the takeaway:
First, the information on what the best, richest investors are buying and selling will make you money. And it will make you money when the stock market is going up and down.
Secondly, you know who I am. You know the source of this information. I started in the hedge fund industry almost 14 years ago, before most people knew what a hedge fund was. I’m not some journalist who has written articles his whole life or some kid out of college or grad school giving you his opinion without any real world experience. If that’s what your looking for you, back your way out of this website. It’s not for you. You can find that all over the web and your favorite financial TV show or rag.
So this is my friendly reminder about the power of my niche investing specialty. My subscription service, The Billionaire’s Portfolio, is the only service of its kind that gives the everyday retail investor access to the trading secrets and stock picks of the world’s best billionaire investors and hedge funds.
There is no other service out there which allows the everyday retail investor to participate in the stock picks of the world’s best billionaire hedge funds. Why? Because you typically need a minimum of $10 million to invest with a top billion dollar hedge fund, and hedge funds by law are not allowed to market or give out performance to the public. You have to be an accredited investor (which means you have to be rich).
My company, Pure Alpha Research, recommends hedge funds to family offices, funds of funds, endowments and super high net worth people.
If you’re worth more than $5 million, give me a call. If you’re NOT, check out my service for the average guy at billionairesportfolio.com.
