Saturday, September 19, 2009

Priory, Part III


Like them, hate them, fear them, or regard the whole idea as preposterous, a fiction, a colleague of mine in The Priory sent me a long Platinum play in late May .

It generated over 30 responses, mostly calling the group “fake” and worse. Some even directly attacked me and my friend, whom I’ve known as a Priory member for over 20 years.

On June 5 Platinum closed at 1282.50 a rocket’s jump from the original post on May 23, 2009 when the first Priory post went up on this board when you would have bought in at 1175.

To refresh your memories, here are his comments on June 5:

"Post went up on May 23 but could not be traded until May 25, Platinum was trading at about 1175 for the metal. It closed today at 1293.

"Each future or option is for 50 troy ounces. 

"Average initial margin is $8,100/contract (Source MFA Global)

"Each full point represents $50.00 in gains, thus 1293-1175= 118 points * 50= $5,900 in profits since May 25 or 73%+ in 10 trading days or 7.3% per day or about $590/day."

Where does the metal stand today? At around 1348. So let us do some more math:

From the First Post: 1348-1175= 173 points:

At $50 per contract (margin $8,100) per point we made: $8,650 or 106% in approx 70 trading days or around 1.24% per day over about 85 trading days or about 300% per year annualized.

For the Second Post:

If you had added to your position on the second signal, the add-on would be worth 1348-1293=55 points *50/point= 2,750 on position number two over about 76 days or 33.9% or 0.45%/day. That is 107% per year annualized.

Overall if you had gone long on contract each time you would have made 7.3% for the first 10 days and 0.45% for all trading days after that. So you would have made 73% for the first ten days and 33.9% for the next trade. Or 73% for 10 trading days and 33.9% for 76 trading days. That’s 73% for 8.6% of the time frame and 33.9% for 91.4% of the time.

Assuming 240 trading days in a year that’s 73% *8.6%*240= 15.06 annualized. Plus 0.
0.45%*91.6%*240= 98.9% annualized. 98.9% + 15.06%= 113.96% per year or about 9.4% per month or just under $1,600/month with two contracts.

The Priory reinvests its gains so their annual return would be much higher. The above assumes you “take the money and run almost every day.”

I know this looks complex and we are estimating a few things but we now have almost 5 months of data to back The Priory’s trading methodologies up.

Why am I posting this?

1) You asked me to keep you informed so I am.

2) Although you cannot trade their methods it shows there are many ways to make big $$ out there and no single formula.

3) By their own claims, The Priory’s wealth is immense and its power unimaginable.

4) I know these guys, or at least a few of them, or at least what they claim to be.

5) Again, for whatever it is worth, the Platinum idea is but one of many ideas that these folks have brought to me over the years.

Some day I'll write up the first one. which was given to me in return for some legal work done in the late 1980's. It's a great story, but I'll save it for another time.



777 said...

Would love to see current thoughts, a new position etc. from this group.


Anonymous said...

OK lets do some are spinning a nice tail to show how awesome that call was but if we step back a tiny bit, that was less than a 15% gain. Lets look at some other well known trading vehicles in the same timeframes.

Goldman Sachs from 90 to 180...100% gain

IBM from 90 to 140...40+ % gain.

In fact I bet you could have thrown a dart at the stock pages and bought any symbol and beat your 14.7%

Please Alan, lets keep things in perspective here.

Anonymous said...

Also...since you also are spinning a tail (OK tale) of leverage I could have traded Single Stock Futures in GS and IBM to make the tail look even better.

Anonymous said...

Superb post. he Priory is real keep them coming.

Anonymous said...

The Goldman Sachs et al ideas are irrelevant. Those are merely picks AFTER THE FACT with the benefit of hindsight which has 20/20 vision.

Whereas the prediction of the rise of Platinum by The Priory on this board was IN ADVANCE of its massive rise and was ONLY one pick.

Thus we are not just comparing apples and oranges but apples and assholes.

JK in DC

Allan, please post this.


Anonymous said...

As someone who has "cleaned up" year after year as a minor investor in Allan's private hedge fund, I can attest to his use of unorthodox methods in his picks.

That is one of his strengths not his weaknesses.

Bottom line, I was worth a few hundred thousand a few years ago when the economy was booming. Now I am a multimillionaire.

All of this during a major recession/depression in which I lost my job, my home value got cut in half and I relied on Allan and his hedge fund and ideas.

If Allan sees fit to post something, I suggest you take it seriously.

Anonymous said...

Umm, what hedgefund?

Anonymous said...

Look forward to your 1980's tale!

- cramar