It’s a harrowing time to be an investor…
The fear… The uncertainty… The doubt… They’ve hammered away at every corner of our personal and professional lives.
Since the start of the year, the market is down 15%. And last month, the CBOE Volatility Index (VIX) – Wall Street’s fear gauge – closed at an all-time high above 80. Currently, it sits around 45.
Anything below 20 means investors are calm and complacent. While a reading above 20 means investors are fearful and nervous about the market… So investors are still on edge.
But at PBRG, we don’t cower from the volatility. Instead, we greet it with eager anticipation. Because, while other investors let fear rule their actions, we recognize the volatility for what it is: An opportunity.
And we’ve used this opportunity to position our subscribers to rack up win after win – without taking a ton of risk.
For example, in our elite Alpha Edge trading service, editor Teeka Tiwari and I have closed 18 profitable trades in a row since the beginning of the year – despite the market crash in February.
This adds on to a winning streak stretching back more than four years to January 2016.
So what’s the secret to our success?
While the market was falling during the pandemic outbreak, we sold “insurance” (put options) for high premiums… and collected cash from the best companies in the market. These are elite firms that’ll survive the current crisis and rebound soon after.
And during the recent rally, we cashed out more profits.
The point is: Whether the market is rising or falling, we have a strategy to take advantage.
And we expect the volatility – and gains – to continue.
So today, I’ll share with you one of the conservative strategies we’ve used to net 47.9% average annualized gains with a typical holding period of about five months. And the best part? Anyone can use it…
Buyouts Hand Us Easy Profits
As a shareholder, there’s nothing better than a good, old-fashioned bidding war over a stock you own.
Think about it… As bidders one-up each other, shares of the company you own rise higher. You can just sit back and reap the benefits without lifting a finger.
For decades, Wall Street has used buyout announcements to rake in billions in profits. That’s one of its favorite low-risk/high-reward setups.
It’s also one of the strategies Big T and I use in Alpha Edge. We call them “Skim Trades.”
With these trades, we analyze major buyout deals as they’re announced. And when we find a deal we like, we buy the targeted company’s stock. Then we sit back and capture the difference between the market price and the buyout price.
Let me give you an example of how powerful this strategy can be…
On March 16, we recommended multinational insurance broker Willis Towers as a play on our Brexit theme and its corresponding rise in volatility.
Our simple yet profitable take on Brexit has been playing out exactly as we predicted. We foresaw uncertainty around Brexit would cause well-run, elite British firms to trade at bargain valuations. But these firms do most of their business outside the U.K., so they’d be able to continue functioning as usual once the dust settled.
Now, there’s one thing we couldn’t predict…
The coronavirus-induced massive sell-off in global stocks made companies with even solid buyout offers drop in price. And this handed us the opportunity to strike on Willis Towers.
Thanks to the combined volatility of Brexit and the coronavirus, shares fell as low as $148. That’s despite insurance brokerage giant Aon making a binding buyout offer of $232 per share.
We entered our position at $164 per share. And we exited at $197. That banked us $33 per share in less than a month. Annualized, that’s a 258% return.
For a low-risk trade, that’s a fantastic return… and the largest Skim Trade profit we’ve generated at Alpha Edge.
This shows the powerful things that can happen when you keep a cool head and deploy our elite strategies in this market.
Today is an especially good time to make money with this strategy. That’s because brutal market sell-offs sweep up even the best buyout targets. Like Willis Towers, their share prices fall despite firm buyout offers.
Now, the recent rally has brought some positive price action to the market. But we’re already preparing our shopping list for the next market sell-off.
And when it happens, we’ll strike on a fresh batch of Skim Trades.
In the meantime, one way to gain exposure to merger deals like the ones we target is through the IQ Merger Arbitrage ETF (MNA).
This exchange-traded fund (ETF) uses a systematic approach to invest in buyout deals. It also has the longest track record and one of the largest asset bases of any merger-related ETF in the marketplace.
Wall Street would have you believe that Skim Trades are too complex for everyday investors. We disagree… and hope you decide to add this simple, valuable strategy to your investing arsenal.
Analyst, Palm Beach Daily
P.S. Skim Trades are just one of the elite strategies Big T and I use. Another strategy we’re using to take advantage of the current market conditions is what we call “sweetheart deals.”
These are private companies that can withstand volatility. While other companies get swept up in sell-offs, their prices remain stable.
And right now, you can still get into three of our favorite private deals for as low as 75 cents per share. But you must act now. These companies will be closing their doors to new investors soon…
To learn more about these sweetheart deals, click here.