By David Forest, editor, Strategic Investor
Before I joined Casey Research, I traveled the world looking for new mines, oil fields, or renewable energy sites. I am a geologist, after all.
Whenever I found a promising project, I’d arrange financing and take it public.
One of those projects was a large gold mine in Colombia.
This was a big project – more than 10 million ounces of gold, worth over $1.6 billion at today’s prices. So it needed major financing.
I ended up securing initial investments from two prominent billionaires: Lukas Lundin and Robert Friedland.
Over time, three other billionaires became shareholders of my company – Thomas Kaplan, John Paulson, and Seth Klarman – through their Wall Street investment companies.
I was directly involved in negotiating these financing deals. And it taught me something incredibly valuable… a billionaire’s secret unknown to most regular investors.
No Warrants, No Deal
While discussing financing with these major investors, warrants were one of the first things to come up. They demanded warrants in return for putting their money in.
No warrants, no deal with these billionaire financiers.
Without getting too far into the weeds, the reason is this: Warrants reward big investors for the risk they’re taking by investing in a smaller company. If or when the small company goes public… warrants are the first thing big investors sell to reduce their total risk.
If you’ve been reading the Dispatch… you might be familiar with how this benefits everyday investors. (Hint – it’s because when the big investors sell their warrants, they hit the markets and that’s how we can buy into them, too.)
But most investors aren’t familiar with warrants… and that’s by design.
For example… check out Warren Buffett. The Oracle of Omaha used warrants to grab $12 billion in profits on a boring stock: Bank of America. But Buffett barely mentions warrants in his numerous public appearances, shareholder letters, and Berkshire Hathaway investor events.
He and other billionaires, like Carl Icahn… Richard Branson… and even Jeff Bezos have used warrants over and over again for enormous gains.
Now look… I won’t say there’s a conspiracy to keep this incredible profit tool secret. But think about it… if you were a billionaire with access to warrants, wouldn’t you be tempted to keep it all for yourself?
The potential gains are just too attractive to share.
And now… by adding one simple step to my readers’ repertoire, I’m here to help level the playing field…
Adding a “W” for Massive Gains
Here’s a chart of a regular stock: Virgin Galactic. This is one company nearly every investor on Earth knows of. It’s billionaire Richard Branson’s space travel company. The trading symbol is SPCE.
The stock went public in October 2019 and did pretty well. Early investors grabbed 200% returns.
But here’s what few people know. If you added a “WS” to the end of Virgin Galactic’s stock symbol, you could have bought the company’s warrants…
Virgin Galactic’s warrants delivered over 600% gains at peak. They tripled the performance of the regular stock.
This isn’t a one-off. In fact, it’s a pattern you find often – if you know where to look.
Here’s another stock, oil drilling company U.S. Well Services. You’ve undoubtedly heard about the oil sector getting hot…
U.S. Well Services’ stock rode that wave higher. Early in 2021, shares gained nearly 400%.
This company’s stock ticker is USWS. Look at what happens if we add a “W” to the end of that code.
The U.S. Well Services’ warrants delivered over 900% gains. That turns a $2,500 investment into over $25,000.
That extra profit potential is why billionaires love warrants. It’s like filling up with premium high-octane gasoline at the same price everyone else paid for the cheap stuff.
Let me show you one more example of the power of warrants.
This is an investment we recommended to members of my Strategic Trader advisory. It’s called Purple Innovation, stock symbol PRPL.
Purple Innovation is a leader in online mattress sales. When stock markets bounced back after the April 2020 crash, its shares soared. Regular investors who tapped PRPL gained nearly 500%.
But my subscribers didn’t buy the regular stock. Instead, they added a W.
Purple Innovation’s warrants delivered absolutely astonishing gains. By the time we advised members to take profits, they booked a life-changing 4,942% win.
That turns $2,500 invested into $123,550 – enough to pay off a mortgage… put your kid through college… or put a chunky down payment on a vacation home.
Most investors will never see a 4,942% gain. Not in a lifetime. Even if you buy and sell stocks every week.
The profit power of warrants is obvious.
That brings us back to the question: why haven’t you heard about this before?
The Wealthy’s Interest in Keeping Warrants Quiet
The problem is this: there are no major services that provide information on warrants for free… or even for reasonable prices… that are easy to follow. That’s in contrast to the countless directories and services that cover regular stocks.
The only way to get solid information on warrants is with a Bloomberg Terminal – a tool that costs over $25,000 a year just to operate – and requires lots and lots of time sifting through company press releases… numbers… and earnings reports.
Mainstream investors just don’t have that kind of time or money. Essentially… big investors are pricing you out of this market.
And if they are… doesn’t that mean you should do your best to get a cut of this pie?
That’s what I’m doing. I’m going public with Jeff Bezos’ seventh warrants deal… to show how main street investors like you can profit right alongside him.
The Profit Power of Warrants
Ask yourself… if billionaires are actively working to hide this tool from you, don’t you owe it to yourself and your family to at least be informed?
In my experience, warrants are better, cheaper, and faster than stocks. That’s why the world’s most successful investors love them – even demand them.
Remember the examples I showed above. Warrants multiplied the profits from regular stocks, in some cases by several times.
That adds thousands – or tens of thousands – of dollars in additional gains, just by unlocking that extra letter (or two) on your next trade.
So check out my briefing on how to crack into this space right here. You have nothing to lose and everything to gain.
Keep walking the path,
Editor, Strategic Investor