Warrants - The
Word Investors
Love to Hate
In this issue:
Warrants - The
Word Investors
Love to Hate
Just the word
'warrants' turns
off many
investors.
Warrants seems
to conjure up
images of attest
warrants and
many investor
just run away.
Hey we don't
really like the
word either but
this financial
term has been
around at least
since the 1920's
and at one time
even
AT&T had
warrants
trading. So
let's take a few
minutes and look
at some
definitions.
From
Investopedia:
What Does
Warrant Mean?
A derivative
security that
gives the holder
the right to
purchase
securities
(usually equity)
from the issuer
at a specific
price within a
certain time
frame. Warrants
are often
included in a
new debt issue
as a "sweetener"
to entice
investors.
Investopedia
explains Warrant
The main
difference
between warrants
and call options
is that warrants
are issued and
guaranteed by
the company,
whereas options
are exchange
instruments and
are not issued
by the company.
Also, the
lifetime of a
warrant is often
measured in
years, while the
lifetime of a
typical option
is measured in
months.
Definition
as a Noun
Authorization or
certification;
sanction, as
given by a
superior.
Justification
for an action or
a belief;
grounds: "He
almost gives his
failings as a
warrant for his
greatness"
(Garry Wills).
Something that
provides
assurance or
confirmation; a
guarantee or
proof: a warrant
of authenticity;
a warrant for
success.
http://en.wikipedia.org/wiki/Warrant_(finance)
In finance, a
warrant is a
security that
entitles the
holder to buy
the underlying
stock of the
issuing company
at a fixed
exercise price
until the expiry
date.
Warrants and
options are
similar in that
the two
contractual
financial
instruments
allow the holder
special rights
to buy
securities. Both
are
discretionary
and have
expiration
dates. The word
warrant simply
means to "endow
with the right",
which is only
slightly
different to the
meaning of an
option.
Warrants
are frequently
attached to
bonds or
preferred stock
as a sweetener,
allowing the
issuer to pay
lower interest
rates or
dividends. They
can be used to
enhance the
yield of the
bond, and make
them more
attractive to
potential
buyers. Warrants
can also be used
in private
equity deals.
Frequently,
these warrants
are detachable,
and can be sold
independently of
the bond or
stock.
In the case of
warrants issued
with preferred
stocks,
stockholders may
need to detach
and sell the
warrant before
they can receive
dividend
payments. Thus,
it is sometimes
beneficial to
detach and sell
a warrant as
soon as possible
so the investor
can earn
dividends.
Fast
forward to today
and hopefully
subscribers are
taking advantage
of the many
great long-term
warrants
included in our
Warrant
Database. Take
the
New Gold Wt A
as an example,
we mentioned
this to our Gold
Subscribers as
low as C$0.20
and it is
currently at
C$2.73 up a
staggering
1265%. Some of
the companies
with warrants
are still buy
candidates but
will not be for
long as we
anticipate
strong gains
into February
2011.
SIGN UP NOW
WHY WARRANTS -
WHY NOW
Over the years
we occasionally
use this title:
Why Warrants -
Why Now. Perhaps
the timing has
never been more
relevant than
today.
There are always
some interesting
situations on
specific
companies with
long-term
warrants trading
but we are now,
in our opinion,
at a time when
many of the
companies with
long-term
warrants will be
performing very
well with the
continuing
strength of
commodities,
gold and silver.
We continue to
discover that
investors want
to over
complicate their
analysis and
decision making
with respect to
warrants. This
is easy folks.
Remember, the
K.I.S.S.
Kept It Simple
Stupid.
THIS IS OUR
PERSONAL
CHECKLIST
-
The
Company -
this is ALWAYS the
important issue
for any investor
considering
buying warrants.
Do you like the
company? This
also takes into
account the
location of the
companies
properties which
we call the
geopolitical
risk. Our
Warrant Summary gives you a List of All Companies with Warrants
Trading and
in our Warrant Database. Now that you have one or more companies
that you like
which have warrants trading let's go to our second step.
-
What is
the remaining
life of the
warrants on your
selected
company's? We prefer and
suggest that
investors focus
on warrants with
a remaining life
of over
2 years of which
there are many
in our database.
Many warrants
today have lives
of 3, 4 and 5
years giving you
lots of TIME,
and the company
lots of TIME
to
execute on their
business plan.
Some companies
have more than
one warrant
trading, some
have three
warrants trading
and normally we
would go with
the
warrant with the
longest live. The more TIME,
the better
chance for
success.
-
Current
Ranking or
Leverage
The last
step is
considering the
current ranking
and/or leverage
of your chosen
warrants. We
provide
subscribers with
our Warrant
Summary which
gives you our
overall Rankings
on All Warrants.
In addition, in
our Warrant
Database we
provide you
with our
Leverage
Calculations on
each warrant.
This is very
important and
gives you
a strong
indication if a
warrant is Over Valued
or Under Valued.
We look for a
bottom line
leverage of
close to 2:1.
This means that
if the
underlying
common
shares rise by
100%, then the
warrants will
rise by 200%,
thus a 2:1
leverage.
If the leverage
on your chosen
company is less
than 1.5 this
would strongly suggest that the warrant is currently overpriced and we would
normally avoid
but yet continue to watch as this leverage can change within days or
weeks depending
on the price relationship of the common shares and warrant.
TO SUMMARIZE:
Pick a company
that you like
that has a
long-term
warrant of over
2 years of
remaining life
and currently
has a leverage
of 1.5 or better
(from our
leverage
calculations)
just buy the
warrant in lieu
of the common
shares for a
much better
potential return
on your
investment
dollars.
Remember
to Keep It
Simple.
We would
put our
investment performance
above that of
virtually any
other
newsletters or analysts and
don't forget
that I either
have reciprocal
agreements with
or subscriptions
to many of the
best newsletters
in the
investment
business,
including Casey,
Dines, The
Aden's, Morgan
Report and many,
many more. I
stay abreast of
what 'they' or
doing and
incorporate that
information into
my service and
to my personal
portfolio.
PRICE OF OUR
SERVICES
Some of you
that have
not
subscribed
as yet may
be
questioning
our pricing.
You must
remember
that our
services are
very unique.
Actually our
Gold
Subscribers
have access
to 3
different
services,
warrant
database, "A
Look Over My
Shoulder",
my portfolio
and our
Insider
Trading
data. When
you grasp
all of the
information
which you
have access
to we
believe you
will be
convinced
that our
services
offer
great value
for your
subscription
dollars.
As with any
investment
service, if
you don't
use the
service, it
has zero
value to
you. Once
you
understand
all that we
offer we are
confident
you will be
long term
subscribers
and of
course
making big
returns.
So, let's get
you started
again and
profiting along
with all of our
current
subscribers.
SIGN UP NOW
SIGN UP NOW
SIGN UP NOW
Listen to My
Audio for FREE
We will continue
to allow
visitors to
listen to a good
sample of my
Thursday
audio's. This is
part of the
service provided
to our Gold
Subscribers. I
speak to
subscribers as
though we are
side by side and
walk you through
my ideas and
reasoning as to
new positions,
sells and the
market
environment. I
know you will
like it and
encourage you to
listen to this
recent audio:
Audio Update
September 7,
2010
Education -
Investment Ideas
- Performance
Education
In our website
we have provided
a
Learning Center
for those of
you not yet
familiar with
warrants. You
will get the
history of
warrants going
back to the
1920's as well
as basic
information,
i.e.,
definition,
advantages and
disadvantages,
how to trade and
much much
more.... Whether
you are a
current
subscriber or
still trying to
decide whether
you want to
subscribe, I
encourage you to
visit the
Learning Center
from time to
time to stay
abreast of our
area of
expertise.
Investment Ideas
Subscribers have
access to many
great investment
ideas/choices
for you to
explore for
consideration
and/or purchase.
Silver
Subscribers
have unlimited
access to our
'one of a kind'
Warrant Database
which includes
all warrants
trading on the
natural resource
companies in the
U.S. and Canada.
Gold
Subscribers
have unlimited
access as well
to our Warrant
Database and
also access to
my total
personal
portfolio
and to our
Insider Trading
data with
Buy and Sell
recommendation.
My personal
portfolio now
includes over 80
different
positions. While
not all of my
positions are
worthy for your
consideration,
you will see my
Top 25
Holdings
as a good place
to start for new
subscribers.
Performance
Frankly, I am
very proud of
our performance
over the last 24
months or so as
we have been
very aggressive
in our buy
opinions. Yes,
in some cases we
have been early,
but we are in
and now doing
very well. In
some cases, we
have sold to
soon and left a
lot of money on
the table, but
made substantial
gains on
virtually all of
our closed out
positions.
As I said above
I have access
to many other
investment
services and
their
performance, I
am confident in
saying we would
rank at or very
near the top of
all services.
True, I do not
have all the
stats to do a
complete
comparison but
our feedback
from subscribers
is very
complimentary.
Check out our
homepage
for a sample of
our staggering
returns.
...."Get
yourself
positioned to
take advantage
of this once in
a lifetime
ride."
If you are not a
current
subscriber
SIGN UP NOW
If you don't
care for
warrants, fine,
but do not let
this stop you
from being a
subscriber. Only
24% of my
portfolio is
invested in
warrants, and
believe me, the
rest YOU NEED TO
KNOW ABOUT,
ASAP.
. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As you can see
Gold Subscribers
actually have
access to 3
different
services all of
which give you
many choices of
where to invest
your monies.
We
encourage you to
get on board
with us soon.
Dudley
Dudley Pierce Baker –
Owner/Editor –
Guadalajara/Ajijic,
Mexico
Bruce Ross –
Webmaster and
Administrative
Assistant –
Phoenix, USA
