How to evaluate warrant ??!!!

Something to share from Uncle SAM, how to evaluate a warrant!! wow!! must read!

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Though mkt is never wrong but still I hv ways to deal with her ^_^ since i cannot beat her , i hv 2 join her ^_^ how 2 join her ? use kiddy TA ? of course NO ! d more u use TA d more u die !

D solution is simple :-

2 things

1) Fund allocation , monitor yr cash vs shares ratio

2) Sell n buy in stages.

U dun know where is d peak, hence sell in stages like what I did 2 pantech, alam n zelan .

Same goes 2 buy in stages.

U know very well, mkt will never goes below 900 liao..hence , u can allocate yr fund in 3 buying stages , 1,000 , 950 n 900.

K..come back 2 warrant

How 2 pick a good warrant ?

B4 i show u how 2 pick good warrant, i must oso show u my proven track records in warrants ( as per attached)

First , YTL-wb bot in year 2002 , cost 0.52 for 213 lots

sold all @ avg 1.60+ , Profit 200K+

Second Ijm-wb bot in year 2006 , cost 0.38 for 278 lots ,

sold all @ avg 1.20+- , Profit 220K +

Third , d latest one , YTLpwr-wb bot in 2008 , cost 0.49 for 100 lots.

sold all @ avg 0.76 , Profit 25K+

Total profit made from warrant = 450K+.. ^_^ how u like that ?


What is good warrant ?

3 criterias

1) Must be in money , what is in money warrant ? in money warrant is premium that u get after u minus out yr cost n conversion from its mom.

Example : Tgoff-wa

As at 8 May 09

Mom = 1.25

Tgoff-wa= 0.69

Conversion = 0.55

Hence, 0.69 + 0.55= 1.24

1.25 - 1.24 = 1cts , premium = 0.01/1.24 = 0.8%

Due 2 cost n time factor, any premium below 30% is still consider as in money warrant .what is premium 30% for Tgoff @1.25 ? d answer is 1.08 .

1.08 + 0.55 =1.63

1.63 - 1.25 /1.25 x 100%= premium 30%

In another word means d FV 4 tgoff-wa is 1.08 $$$$$$$


2) Future earning of its mom , take a look at my previous warrant purchase , all r bluechips , such as YTL n Ijm..d latest one is Tanjong offshore.. with its status of political link darling + orders in hand , I forsee its future earning shld be a good one.


3) Expiry date , expiry date must be at least 3 years n above , y ? simple.. cos u dun know what will happen 2molo , what if another 911 happen tonite ? once its mom dive from d sky, yr premium could gone with d wind oso, hence , longer expiry date is essential.

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For criteria 1, why <30% consider in-money?? let see what SAM says:

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May 12, 2009 9:36 AM

Samgoss said... 2 ccdev..u left out something here, sam is from "KINDER GARDEN" Fa school ^_^ , fyi.lots of TA experts has come 2 my kinder garden school seeking 4 guide. what if I am graduated from FA uni ? wow wow wow !

2 poker limit, y 30 % ?

simple !

Average FD is ard 6% , hence, 5 years due warrant = 5 x 6%= 30%.
still dun understnad ?

k... 4 example.

If d conversion is 1.00 n due date is 5 years later , u only need to come out with rm1,000 upon due date , so what u do with this rm1,000 b4 due date ? obviously u will put it in FD , hence..5 years x 6% lol ^_^

simple ??

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Haha.. now u know how to buy warrant d!! Thank to SAM

http://samgang.blogspot.com/2009/05/v-warrant-can-make-u-rich-how-2-pick.html