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The Best Game in Asia

Here’s why Korean online game developer Webzen (WZEN) is the best way you can reap profits in this red-hot sector.

With more than 56 million registered users, Webzen’s three-dimensional multiplayer online role-playing game “MU” has developed a cult following among gamers throughout Korea, China, Japan, and the rest of Asia. A whopping 70,000 players in Korea and 320,000 in China are playing the game online as you read this. That’s more than the population of Miami.

Webzen has recently announced a licensing deal to distribute its games into China, with Chinese publishing firm The 9 to release Webzen’s new title Soul of the Ultimate Nation in China. After receiving $13 million, Webzen will receive an additional 22% of the royalty from revenues in the Chinese distribution of the game for the first three years of the game’s operation.

And unlike many one-hit wonders in this industry, Webzen is focused on becoming a truly global online entertainment leader. As part of this effort, Webzen recently unveiled plans to set up nine new development studios throughout the world. The studios will employ 450 development staff to work on PC online game and client/server technologies as well as games for next-generation consoles.

Webzen also recently announced plans enter the US market with a new subsidiary, Webzen America, based in LA. So you may be seeing Webzen products on US store shelves before too long.

Let’s buy Webzen (WZEN) at market this week, and place your initial stop at $6.70. As this is a volatile stock, you may want to limit your position size. To shoot for even higher profits, buy the June $10 call options (QZEFB.X).

Portfolio Update

To make room for Webzen, let’s take our profits on China Mobile (CHL) stock.

Last week’s pick, Woori Financial (WF), is off to a flying start, and up almost 5% last week, after an upgrade to “outperform” by Bear Stearns.

America Movil (AMX) hit new highs last week. The stock is up 24% and our (second round of) AMX options are up another 56%. Move your stop to $27.80.

NII Holdings (NIHD) is also close to hitting record highs, so move your stop to $42.50.

Both Elan (ELN) and Sify (SIFY) are up almost 35% since we recommended them, and we’ve already booked triple-digit profits on the options of both these stocks.

Overall, 2006 is off to a strong start with seven out of eight positions showing profits.

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.