EFAM | Escape From America Magazine

Unique Investment Strategies Used by Rich and Famous Investors

Warren Buffet

Global Opportunities for Those Interested in Building Wealth

Hello,

This is Dudley Pierce Baker and I welcome you to take a serious look at two unique websites and investment services which I have assembled for investors around the world.

My newest service, www.InsidersInsights.com is so simple. We track for you the insider’s transactions basically on the Canadian resource shares. When I determine it is time to buy I issue a BUY ALERT and perhaps even more importantly, I issue a SELL ALERT when I believe the time is right to exit the trade.

This service was started in April 2009 and you can see all of our closed out positions on our homepage of which we are currently averaging over 120%.

Again, what subscribers love is the simplicity of the service; you just follow my lead and my alerts. We all know the power of following the smart money of corporate insiders and we are on top of the filings each day.

In my first service, www.PreciousMetalsWarrants.com launched in March 2005, we present a detailed database of all warrants trading in the United States and Canada on companies in the natural resource sector. I have consistently added new features to the service over the years and it is now a site envied by many in the business. Everything to need to assist you in deciding which warrants, if any, to include in your portfolio. We provide a Warrant Summary, Ranking of Warrants and our proprietary leverage calculations for each warrant. As I like to say,

“We’ve Done The Math – You Pick The Company”

Let’s first remember that warrants are merely one investment vehicle, albeit, an important piece that can greatly increase your overall investment gains in the years ahead. Even for myself, the value of warrants in my personal portfolio has rarely exceeded 25% and currently my warrant holdings represent 24% of my portfolio leading many subscribers to ask me what else I own?

This was the incentive for me to introduce in April 2008 what I call,
“A Look Over My Shoulder” which is my entire portfolio (over 80 positions), well organized, weekly audio comments, tracking of all Insiders Transactions and Charting of all companies. You may sign up for this service and it includes our great Warrant Database as well. See the Gold Subscription.

Also our Gold and Platinum Subscribers receive access to all of the Insiders Insights data and alerts as part of their subscription.

I realize many of you are asking, ‘what the heck is a warrant?’

On our website, we have a complete Learning Center but let’s just cover a few basics to get you started.

If I told you, that you could buy up to a 5 year call on perhaps one or more of your favorite mining companies or energy companies, would you be interested?  Of course you would.  Who wouldn’t?

Can you imagine having the right, but not the obligation, to purchase the common shares of one of your favorite mining or energy companies with up to 5 years before expiration?

As with options and LEAPS, we would suggest an allocation of no more than 10% to 20% of your portfolio in long-term warrants.

This investment vehicle has been around literally for decades and has been overlooked by the investment community. Most of the analysts today do not even understand or take the time to understand the benefits of this investment.

As the owner and editor of this unique investment service I have been referred to as the “Commodities-Stock Warrants Guru by Adam Hamilton, owner of the popular Zeal Intelligence investment service.

“Public-traded warrants have been around for decades, maybe centuries, yet few traders are aware of them.  I have to admit I had not thought about them since I learned about them in college finance classes.  Then in early 2005, Dudley Baker came along….In early 2005 he decided to share his awesome database and ongoing research in a fantastic service that I highly recommend if you are interested in warrants.  It is www.PreciousMetalsWarrants.comMr. Baker is now the world’s premier commodities-stock warrants guru.  As far as I am concerned, he has achieved near omniscience in this fascinating realm.  Over the last couple years, he has taught me much about warrants and greatly expanded my perceptions of the great array of warrants available for traders….”
Adam Hamilton – July 2007

This did not happen by accident as my extensive knowledge of warrants goes back to the 1970’s and my fascination with the writings of Sidney Fried and The R.H.M. Warrant Survey, a hardcopy newsletter and a popular read at the time. Sidney Fried’s first book, ‘The Speculative Merits of Common Stock Warrants’ (1949) is a rare and timeless educational tool for warrants and is the core of knowledge used by me in this service.

Sidney Fried passed away in 1991 at the age of 72 and since 2005 I have used my cumulative knowledge of warrants which I learned from the ‘master’ to educate and assist investors around the world.

I not only write about warrants but I put my money where my mouth is and currently have 24% of my portfolio invested in warrants.

Your Best Option Is A WARRANT

Would you be interested in an investment vehicle that offers:

  • Increased Leverage
  • Decrease your Investment at Risk (yes, that’s correct)
  • Time (much more time than options or leaps – up to 7 years
  • No margin
  • Trades like a stock thru your brokerage account
  • Incredible opportunities and choices
  • Often overlooked by 90% of investors and analysts

Of course you would be interested, who wouldn’t?

So, what is a warrant and why should you be interested?

A Warrant is a security issued by a company which gives the holder the right, but not the obligation, to purchase the underlying stock at a specific price, within a specified time period. In essence, a Warrant is a long-term call option.

Warrants are usually issued by a company in connection with a private placement or financing arrangement. Many of these Warrants remain privately held and do not trade in the open marketplace.

Our service only covers Warrants which are traded on the exchanges and which can be purchased by you and me.

As individual investors, our objective is usually to only trade the Warrant, not to exercise the Warrant. The Warrants trade, freely, just like the common stock.

Currently there are many Warrants trading with expiration dates out to the year 2012-2014 and two which expire in 2017. Warrants expiring within, say, 2 years, while they may possess great upside leverage, also pose a greater risk. It is widely recommended for most investors to focus on Warrants with at least 2 years left before expiration date giving you more time to play this bull market. Remember, warrants, like options and LEAPS can expire worthless, so we are looking for warrants on our favorite companies with the longest remaining life possible.  We want Time to be on our side.

Why should I be interested?

Increase your Leverage & Decrease your Risk

Incredibly, warrants offer the investor the best of both worlds: increased leverage and a means to decrease your risk.

Leverage:
The reason most investors acquire Warrants is to increase their Leverage.

Most investors are looking for at least a 2:1 ratio. In other words, if the common stock doubles (100%), we are looking for a minimum 200% move in the price of the Warrant.

Risk:
Another primary reason for buying Warrants, in lieu of the common stock, is to decrease your investment dollars and thus your risk all the while maintaining the same equity position.

Allow me to share with you some of my personal trades in warrants:

Some Examples of Past Performance
Average Percentage
Company Cost Basis Sales Price Profit Return
Desert Sun Mining Wt $0.36 $4.48 $4.12 1144%
Breakwater Resources Wt $0.19 $2.21 $2.02 1063%
Metallica Resources Wt $0.26 $2.95 $2.69 1035%
Yamana Gold Wt $0.396 $4.25 $3.85 973%
Silver Wheaton Wt A $0.26 $2.10 $1.84 708%
Rio Narcea Gold Wt $0.267 $0.91 $0.64 241%

All of these trades had one common denominator working in my favor: TIME

The first decision always is selecting the underlying company and second, if there are warrants available, how much TIME is remaining on the warrants until expiration. When I purchased these warrants all of them had well over 3 years until expiry date. TIME was on my side, TIME was my friend, and TIME allowed the markets to ebb and flow while I maintained my positions and picked the right TIME to sell my positions for excellent profits.

An incredible amount of money is being spent by the investment community in the promotion of options. It’s almost impossible to visit any investment website and not see advertisements by brokerage firms and analysts encouraging the use of options.  Why? They are making a lot of money off of commissions and selling you ‘systems’ or investment strategies. The fact is ‘investing’ is not the correct word as statistically we know that 80% to 90% of the time, individuals lose their ‘investment dollars’.

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The investing public and professionals of today are, for the most part, not aware of the enormous profit potential of warrants and thus absolutely nothing has changed since Sidney Fried’s comments in 1949. By providing this website and learning center on warrants, we also are trying to educate the investment public and professionals to wake up to this greatly overlooked investment vehicle.

Recently I was asked to write an article for Futures Magazine on warrants. Below is the link to the article on their website and we encourage you to consider being a regular visitor and subscriber to their magazine.

How To Trade With Warrants

Perhaps you are saying; Dudley I see the upside potential and increased leverage, but what about my downside risk?

Good question, and the easy answer is that you can not lose more that the amount you decide to invest in warrants and you can ‘control’ the same number of shares of one of your favorite companies with a much smaller investment. Let me show you this in an example (not a recommendation):

Say, you like Goldcorp and the common shares are selling around $39 and you discover (of course through our warrants database) that Goldcorp has a warrant trading for around $4.50. If you are comfortable with the terms of the warrant, i.e., the exercise price and the length of time remaining until the expiry date, then perhaps you should purchase the warrant. If you purchased 1,000 shares of the common, it would cost you $39,000. Where as if you purchased 1,000 warrants at $4.50 for a total of $4,500, you still ‘control’ the same position in Goldcorp saving yourself $34,500 in cash and limiting any loss to a maximum of $4,500.

There are numerous advantages to owning this vehicle and virtually no disadvantages. So, why is there a disconnect?

Personally, I have to sum up the lack of interest in warrants as merely a lack of knowledge and information. So many investors and professionals just do not take the time to investigate the incredible opportunities which warrants can provide.

Precious Metals Warrants
“The Authority on Warrants”

But now, let me ask you a question.

Where do you see the price of oil, uranium, gold, silver, copper, zinc, etc. in the next few years?

If you follow many of the popular analysts/newsletter letters, i.e., Jim Dines, Doug Casey, The Aden’s, then you are already bullish on the commodity sector, particularly, gold, silver, oil and uranium.  Most of these analysts are expecting gold to ‘greatly’ exceed $1,500 per oz, possibly up to $3,000 to $5,000 per oz.

We are also big believers in this continuing bull market in the commodity sector and are looking to achieve maximum gains by selectively purchasing long-term warrants on some of our favorite resource shares.

Some investors will make a killing, if correctly positioned to profit from the rise in gold, silver, uranium, etc., the sky is the limit.  This is not just my personal opinion but that of many analysts.

These analysts believe ‘this bull’ can be bigger than the technology and internet bubble.  Can you imagine?

You cannot afford to be left out in the cold.

But today, the important thing is to get invested – NOW

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A Different Approach

What if instead of buying the common shares of mining and energy companies, I could educate you in a few minutes on a different investment vehicle as I referred to earlier which will give you not only increased leverage but up to a 5 year ‘call’ on many individual mining and energy companies.  Would you be interested?

So, allow me to share with you how I once again became interested in this exciting and extremely profitable and leveraged investment vehicle; warrants.

In September 2004, while attending one of the Gold Shows in Las Vegas, I heard the highly respected Frank Holmes, Chairman of U.S. Global Investors (A family of Mutual Funds) make a brief mention of warrants.  Well, that was the spark I needed to get interested in warrants once again.

Upon returning home from the conference, I began researching for an investment service providing me the complete details on all mining and energy companies. Yes, there are warrants trading on companies other than mining and energy companies, but for me, my hot button and my belief in the current bull market was my only area of interest for warrants.

“Well, I could not find any company providing this service”.

As an investor I wanted to know ‘ALL’ of the mining and energy companies with warrants. I enjoy making my own decisions but I needed the detail list of ‘ALL’ companies with warrants. Sure, I knew a few of the companies with warrants, like Bema Gold, but I wanted to know ‘ALL’ of them, from the biggest of the companies to the smallest. I would have paid any price to get this information but it did not exist in any form acceptable to me, if at all.

It was obvious that if I was to have the information needed to make my investment decisions; then I was going to have to accumulate the information myself….
and so I did.

In March 2005, with the encouragement of several good friends, I launched Precious Metals Warrants providing not only myself but all investors interested in learning about warrants the opportunity to do so.  To my knowledge, we are the only comprehensive source of this valuable information.

Who Is This Guy?

If you are wondering about my skills and background please visit my bio on our website.

We are “The Authority on Warrants” and the leading source for information on warrants.

In Conclusion
Remember that some of the most savvy and respected professionals in the business, Warren Buffett, Frank Holmes, Martin Weiss, David Morgan, James Turk and Adam Hamilton, among others, agree that warrants have a place in an investor’s portfolio. This fact alone should peak your interest.

Warrants

  • Offer Great Leverage and Time (up to 7 Years)
  • Decrease your investment dollars at Risk
  • Trade like a stock
  • Purchased thru your brokerage firm
  • Most overlooked investment vehicle even by the pros

You pretty much have our entire story of what we do and what we provide at Precious Metals Warrants with the opportunity for incredible gains, so why not subscribe NOW.  Don’t be left out!

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