How to Find Unfair Deals in the Stock Market
By Dr. Steve Sjuggerud
May 2, 2007

"Steve, when it comes to investments, I'm not looking for a fair deal. I want an unfair one."

I've heard this twice in my investment career...

The first time I heard it, I didn't really understand it… I thought the guy who said it – an incredibly successful investor from the southern U.S. – must have meant that he was a shyster... and that he only wanted deals where he was taking other people's money.

The second time I heard it, I understood what it meant...

This time, it came from an incredibly successful New York investor. He didn't mean that he wanted to take people's money... He meant that he only wanted to invest when the cards were so unbelievably stacked in his favor that he couldn't go wrong.

I've come to learn that's what the first guy meant, too. These two are scouting unfair deals. This is what super-successful investors do.

You and I have a tough time competing with the big money at times. But when it comes to unfair deals, we actually have a big advantage. You see, many of the unfair deals I find are simply too small for the big investors to buy.

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For example, nearly two years ago, I recommended in my letter Sjuggerud Confidential a few unfair stock market deals. I'll share those ideas with you now and explain how to find more.

To me, the ultimate unfair deals offer you infinite upside potential and absolutely no downside risk.

Nearly two years ago, I recommended two plays on the overall stock market. These were even better than what I just described as unfair deals – in these two deals, your upside potential was unlimited, and your worst-case return was actually positive!

Specifically, I recommended MITTS – the short name for "market index target-term securities" – with the symbols MTSP and MTDB on the American Stock Exchange. One of them was on the S&P 500, and the other was on the Dow. These two investments entitled us to all of the upside and none of the downside of the stock market.

If the market went up, we kept all the gains. And if the market fell, these two plays guaranteed you $10 a share back when they matured – which is set to occur in the next 12 to 20 months.

These plays were fantastic when I originally recommended them. They were both trading for less than $9.50 per share. Since they're guaranteed to be worth $10 when they mature, your worst-case outcome was better than a 50-cents-per-share gain.

Today, they're both trading around $11, for gains of between 15% and 20%. We made these gains – and we took on absolutely no downside risk. In my initial recommendation, I suggested readers sell once these shares hit $13… as we simply get too far away from our $10-per-share downside risk protection.

Products like these are being issued every day. But information about them is hard to come by. One place to find them for free is at the American Stock Exchange website… Go to www.amex.com, and then click on "Structured Products" on the left.

To get the specifics for each deal at AMEX for free, you can go to www.quantumonline.com and type the symbol in. Then, you can get the prospectus and the description. It's cumbersome, but it's the best free way to get this information.

Another business that offers "unfair deals" is Everbank.com. Everbank has created no-downside, unlimited-upside MarketSafe CDs for my subscribers in things like gold and Japanese real estate. Visit everbank.com, then click on "Products" and "Certificates of Deposit." You’ll find the details there.

Unfair deals are my favorite way to invest. It's a bit of work to uncover them… but it's completely worth it…

Good investing,

Steve