Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance Did Washington Declare WAR on Your Savings? Back in March of last year, I spotted an unmistakable profit opportunity. The company was the steelmaker Cleveland-Cliffs (NYSE: CLF). I had been following Cleveland-Cliffs for years, so it's no surprise that it was on my screen. But on March 10, 2020, something special happened. A trade lined up that, frankly, was one of the best setups I've ever seen. In fact, it was so good that one of our War Room members, George L., is up $181,000 on a $7,512 investment since March 2020 from this one pick alone. He's not some superstar investor, either. In fact, it was one of his FIRST options trades!!! More on that in a minute. First, a little detail on how I spotted this trade... because the signal I saw here is one you, too, can use to see big success in your trading. What I saw was massive amounts of insider cluster buying... That's when more than two executives or directors buy shares within a short period of time. In Cleveland-Cliff's case, over the months before I recommended the trade, director John Baldwin had bought up 346,181 shares... director Robert Fisher had picked up 353,626 shares... and chairman Lourenco Goncalves had loaded up with 3,565,597 shares! When this many insiders are buying all at once, it's one of the strongest signals that a big stock move is coming. Keep in mind, Cleveland-Cliffs was coming off a couple of tough years. But it was turning things around, and the insiders knew it. Add in the pandemic - which pushed prices lower - and there was no question the stock was undervalued... really undervalued. These insiders were primed to profit and so were we. But instead of buying the shares outright, I told War Room members to enter the play using very cheap LEAP (long-term equity anticipation) options that expired in January 2022 - yes, almost a full two years from the time I made the pick. The stock was trading below $5 and the LEAP options were well below $1. Here's what I wrote: Karim R. 3/10/2020 at 11:36 a.m. Open CLF: It's time to add the second half of your position to CLF. BUY TO OPEN the CLF Jan 2022 $7 (CLF JAN 2022 $7C) calls at a LIMIT price of $0.88 or lower. The spread is $0.81 by $0.91 - don't fall for it. Work your way up from the bid and use the market weakness to your advantage. New members - if you want in on this trade, please do a search and read up on the rationale before acting and then decide if you want in or not. Members like George bought in. And then Cleveland-Cliffs, as we expected, started moving. It went up... and up... and up some more. At first, we didn't know how much George was making - just that he was a happy camper!! We followed his posts over the next few months as he updated us on his results. Below is one from December 2020 when Cleveland-Cliffs had just broken above $12... Here's what George told our War Room members: George L. 12/2/2020 at 10:23 a.m. CLF has cleared 12$! My LEAPS from March are up 809%. Wow, 809% - but no dollar figure! But what a gain!! |
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