Nailing the bottom in Apple...
Nailing the bottom in Apple... A new iPhone record... The fastest-selling entertainment property of all time... Utilities fighting back against solar energy... Your last chance to learn Jeff's trading secrets...
Shares of technology giant Apple hit a short-term low on September 16...
The company had recently revealed its two new iPhones – the 5c and 5s. We discussed the release in the September 11 Digest.
The market was disappointed. Apple shares fell as much as 6% that day – dropping to less than $470. Shares continued falling, eventually bottoming at $450.12 on September 16.
(INSERT APPLE CHART)
The following morning, DailyWealth Trader co-editors Brian Hunt and Amber Lee Mason sent a trade alert...
This recent pullback [in Apple] sets up an excellent put-selling opportunity: Right now, you can sell the November $450 puts for $20.80.
If Apple is trading below $450 come November, put-sellers will end up buying shares at a 5.5% discount to today's dirt-cheap price. At that point, you'll start collecting Apple's 2.7% dividend, and you can turn around and sell covered calls to generate even more income…
If Apple holds above $450 or rises higher, put-sellers will get to keep the $20.80 free and clear. That's a 4.6% yield on your purchase obligation in two months... 28.1% annualized.
Apple was oversold at $450... And we believed the stock had a floor at that price. Billionaire investor Carl Icahn initiated a $1 billion position in Apple around $460.
The new iPhones went on sale over the weekend... And the results were incredible...
Apple sold 9 million iPhones in the weekend debut – nearly doubling its previous iPhone record. Analysts were expecting sales between 5 million and 7.75 million units.
"While we've sold out of our initial supply of iPhone 5s, stores continue to receive new iPhone shipments regularly," Apple CEO Tim Cook said in a statement. "We appreciate everyone's patience and are working hard to build enough new iPhones for everyone."
The company also announced quarterly revenue would be at the high end of its forecast of $34 billion to $37 billion... And gross margins will be near the high end of a range of 36% to 37%.
Apple rose as much as 6.3% on the news, before settling at a 3.5% gain to $484. Subscribers who followed Brian and Amber's recommendation are on track for a 4.1% return in two months, which equates to an annualized gain of 25.2%.
In the September 19 Digest, we told you about the release of the latest installment Take-Two Interactive's latest blockbuster video game franchise – Grand Theft Auto V (GTA V).
The most financially successful video game of all time was Activision's Call of Duty: Black Ops 2, which sold $1 billion in its first 15 days. We reported GTA V sold $800 million on its debut.
Over the weekend, Take Two announced the game crossed $1 billion in sales in its first three days. "We believe this marks the fastest that any entertainment property, including video games and feature films, has reached this significant milestone," company representative said in a statement.
Shares of Take Two Interactive are up 0.5% to $17.07 today.
Digest readers know well… Porter has long been bearish on solar-energy technology and the companies that sell it…
This is as clear as I can be: Solar power, as a source of energy for the power grid, will simply never work. And by "work," I mean it will never even be even remotely economic. The reason why it will never work has nothing to do with technical hurdles or innovations that have yet to be made. The reason it will never work is because of the laws of nature, in particular, the Second Law of Thermodynamics. – Porter Stansberry, September 23, 2011 S&A Digest
And based on an article we found in Sunday Wall Street Journal, he's not the only one...
** Utilities are fighting back against calls that they accommodating solar power...
In most cases, solar panels don't generate 100% of the power residents use... As Porter has often said, the biggest problem for solar power is called "night." And at night (and other times when panels aren't drawing much power), solar-powered homes draw power from the same grid that serves utility's customers.
But when solar panels generate a surplus of power… it flows into the grid. And most utilities are required to pay customers for that power.
As Sunday's Wall Street Journal points out:
Under state rules known as net metering, customers are credited on their bills for any power that flows from their homes to the grid, usually at the same rate they pay when they draw power from the grid.
So customers with solar panels not only are buying less electricity from their utilities, but also are able to offset much of the cost of what they do buy.
In other words, solar customers are having it both ways. And major utilities in states like California and Arizona aren't happy.
Arizona utility Arizona Public Service Co. estimates its approximately 1 million residential nonsolar customers pay around $18 a year to subsidize its 18,000 solar customers.
"Everyone who's using the grid ought to pay their fair share of the grid," says Jim McDonald, a spokesman for the utility told the Journal.
Arizona Public Service Co. presented two alternatives to the current net metering laws... And both options would boost the average solar customer's monthly bill by $50 to $100.
"This was the best seminar that I have participated in. Very understandable."
Over the weekend, we broadcasted one of our most popular webinars ever, hosted by S&A Short Report editor Jeff Clark. Judging by the loads of positive feedback we received (including the note from an anonymous viewer above), our subscribers loved the presentation.
Jeff recently recorded a presentation to discuss his views on the gold market and share some of his top trading strategies.
For example, last week, Jeff went long gold stocks prior to the Federal Reserve's announcement... Gold stocks were cheap. And he liked the risk-reward setup for going long.
We all know what happened next... The Fed announced it would maintain its current pace of bond purchases ($85 billion a month). And assets across the board soared – gold stocks, as measured by the Market Vectors Gold Miners Fund (GDX), jumped more than 10% on the news.
And anyone who followed Jeff's advice made triple-digit gains in one day.
I bring this trade up not to pat ourselves on the back, but to demonstrate the types of gains you can make following Jeff's technical indicators.
And on this webinar, he shares many of his favorite indicators for trading...
Like the five technical setups to watch for in a crisis and how to profit from it.
If you've ever wanted to learn more about options trading – or simply hone your skills – now is your chance. We're letting you watch Jeff's webinar completely free... But we're taking the video down tonight at midnight. Click here to sign up...
New 52-week highs (as of 9/20/13): Enersys (ENS), Laredo Petroleum (LPI), Qlik Technologies (QLIK), Sturm, Ruger & Co. (RGR), and Triangle Petroleum (TPLM).
We've long preached the benefits of adding certain options trading strategies to your arsenal... And judging from today's mailbag, you're learning and profiting from our advice. How have you fared trading options? Let us know here... feedback@stansberryresearch.com
"Kudos to you for waiving your copyright restrictions to Friday's Digest. You have been Paul Revere for a long, long time now. Allowing your subscribers to distribute this message aids us in also sounding the alarm." – Paid-up subscriber Rick Barton
"One year ago, I knew nothing about the concept of options. Today, I am selling Apple put option contracts at a discount of 12% or more to Mr. Ferris' buy up to price...
"Mr. Ferris wants Apple to bring home that portion of the $147 billion dollars which are in accounts outside of the US, pay the tax and it will enhance shareholder value. On the other hand, one could say that $147 billion in cash especially that portion of it in foreign investments could be viewed as a hedge against the Bernanke printing machine. If any of this is true, then the Apple put trade could be considered to be one of the most conservative investments in the world. Whatever I have learned which make any sense has been from all of you at Stansberry and Palm Beach Letter." – Paid-up subscriber John Bertrand
"Jeff, I am an Alliance member, and have been reading your work for about a year. I began selling puts based on your recommendations about 6 months ago, and am very pleased with my results. I've made money on 7 of 9 trades that I have done so far.
"I believe that your presentation last night was the best, most informative one I have seen on the subject of options trading. Your explanations of the technical set ups cleared up the confusion I had reading the charts in your frequent emails. I now know enough to look for such patterns as the double bottom, bearish rising wedge, and bullish falling wedge. Like you, I believe that 2014 = 2008, and think that I now have the tools available to profit from what is to come.
"Oh yeah, thanks for the GDX calls recommendation. I didn't catch it at the top, but still made 92% net after commissions. Looking forward to seeing more such recommendations. Keep up the great work. Many thanks!" – Paid-up subscriber Andy Wallace
Regards,
Sean Goldsmith
Miami Beach, Florida
September 23, 2013
How to Build a Fortune, 2.3% at a Time…
In today's Digest Premium… we're giving you a "taste" of one of our most popular trading services -- DailyWealth Trader. Every day, co-editors Brian Hunt and Amber Lee Mason send market updates on big trends and trades to profit from them.
Today we're sharing their latest trade. It's a great opportunity to collect instant income and start generating safe double-digit returns in your portfolio…
How to Build a Fortune, 2.3% at a Time…
Editor's note: Following up on our discussion of Apple in today's Digest, we wanted to give you another "taste" of what has become one of our most popular trading services - DailyWealth Trader.
Every day, co-editors Brian Hunt and Amber Lee Mason send market updates on big trends and trades to profit from them. Today's Digest Premium features the latest trade from DailyWealth Trader, which we published this morning.
On Friday, we showed you how we've been able to generate safe, double-digit returns with our "trading for income" strategy of selling covered calls and naked puts. These trades are consistently bringing in hundreds of dollars… thousands of dollars… even tens of thousands of dollars per month for our readers. For example, we just received this note from reader T.G.:
Wanted to weigh in on DailyWealth Trader. The education I've received on put-selling is phenomenal… I've been able to amass quite a track record of success. For instance:
Year 1 (June 2012 to May 2013), I netted $17,500 on a cash position of $50,000.
Year 2 (June 2013 to Jul 2013 – August is still in play) I have so far netted $4,300 with another $3,500 for August due to expire next week. This is on a cash position that is now $100,000.
This is all done in an IRA, no margin trading. This is not a get rich quick idea. You do not hit home runs. You methodically hit single after single after single, with a few doubles thrown in there when Mr. Market is particularly generous.
As T.G. notes, when we sell naked puts and covered calls, we're not "swinging for the fences." We're looking to generate small amounts of income over and over and over. At the end of the year, those small income "hits" add up to big returns.
Take our trades on Coca-Cola (KO), for example. On August 21 and again on September 9, we recommended selling the October $39 covered calls on Coke. Including dividends, those trades generated 2.6% and 1.8% payouts. Annualized, those trades are on track to return 19.4% and 28.7%.
And you can generate another payout with Coke today.
As you can see in the chart below, shares of Coke fell 14% from mid-May through the beginning of September. And over the last three weeks, shares are up 4% off their lows.
Insert chart from DWT
Today, you can buy shares of Coke for $30.80 and "sell to open" the November $39 calls for $0.84.
If Coke is trading below $39 come November, the return on the trade comes out to 2.2% in eight weeks, or 14.6% annualized. You'll hold onto your shares and you can continue to sell calls to collect more income.
If shares move above $39 come November, you'll sell at $39 and close the trade. Including the $0.84 premium and $0.20 in capital gains, you're collecting 2.7% on your investment. That's 18.1% annualized.
As T.G. said, trading for income isn't a "get rich quick" idea. But if you're like many folks, you've tried "swinging for the fences" with risky strategies. That almost never works. Following conservative option strategies does work. Consider putting this safe strategy to work today with Coke.
– Amber Lee Mason and Brian Hunt
Editor's note: To learn more about the wealth of educational materials available to DailyWealth Trader subscribers and start receiving Amber and Brian's recommendations every day, click here...