By Kris Sayce, editor, Casey Daily Dispatch
We can only apologize…
On second thought…
Maybe an apology isn’t necessary.
You may even thank us for what we’ve done over the past two weeks.
Because odds are, you’ve developed “Frequency Bias.”
It’s when you notice something more often after learning or becoming aware of that thing for the first time.
And at Casey Research, we’ve been pounding the drum on one investment class for a while.
That’s why we think we’ve developed “Frequency Bias” – or some form of it, too.
Even though developing any sort of bias can be a negative, this instance of “Frequency Bias” could have a major positive impact on your wealth.
That’s because of the huge, potential gains it can bring. We’ll explain more below…
If this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from our in-house investing experts: Dave Forest and John Pangere. And from the founder of our business, Doug Casey.
Today, we look at how “Frequency Bias” and a specific investment class may have changed your investment outlook forever.
No Apology Necessary
For the past two weeks, we’ve served you a diet consisting almost exclusively of one subject – warrants.
Why? Because warrants are the type of investment tools that can change your life.
We’ve explained how these little-known and even less understood investment assets have the potential to deliver extraordinary gains.
And we’ve shown you previous examples of how investment experts Dave Forest and John Pangere have helped readers to big gains using this asset.
That includes one of Casey Research’s biggest success stories – Purple Innovation – where the warrants on that stock produced a 4,942% return for investors who bought and sold when instructed.
Or Blink Charging, where the warrants on that stock delivered Dave’s readers a 2,805% gain in less than two years.
Or his current best open position, Custom Truck One Source, which as we write is up 1,407%. (By the way, this last one is a hold, as the price is well above Dave’s recommended buy-up-to price.)
While Dave and his team have researched, analyzed, and recommended warrants, few in the general investing public have paid attention. That’s despite Dave’s and our best efforts to make people aware.
But that may be changing… And it’s possible that it may be changing for you, too. Because even though we’ve followed Dave’s work closely for the past two years, we’ve started to notice increased interest in warrants.
This is partly due to the development of SPACs (Special Purpose Acquisition Companies), which is an alternative and cheaper way for companies to list on an exchange. With every SPAC stock listing, there is a warrants listing associated with it.
In 2020, there were 254 SPAC listings. Through August this year, there were 419 SPAC listings. Although the rate at which SPACs have listed has slowed, the increased number of SPACs has meant an increased interest from investors in warrants.
And so, after tuning into the Dispatch for the past two weeks, you’ve probably started to notice them more, too… and to see their extraordinary wealth-building potential.
In yesterday’s Dispatch, we mentioned the “Trump warrant” and the company that’s planning to finance Donald Trump’s new social media platform. Between Wednesday and Friday last week, the stock gained 1,657%. The warrant gained 15,433%.
We also advised you to not go anywhere near the stock or the warrant, as the pricing was completely out of whack. We hope you paid attention. Both fell more than 10% yesterday.
But that wasn’t the only warrants story…
Double the Return From Warrants
As Yahoo! Finance reported yesterday:
Cryptocurrency exchange Bakkt stock soared on Monday, after announcing a partnership with Mastercard (MA) to offer crypto debit and credit cards, making it easier for consumers to pay using digital coins.
Via Mastercard and Bakkt (BKKT), businesses and banks will be able to issue their own branded crypto debit and credit cards to consumers who want them. Holders can use bitcoin purchased through Bakkt with the card, or link to a fiat-based funding source, and receive bitcoin rewards.
Bakkt is majority owned by Intercontinental Exchange (ICE), owner of the New York Stock Exchange.
That news on its own is a big deal. It provides more evidence that cryptocurrencies are moving deeper into the mainstream.
The reporting was right about the stock price. It gained 234%.
But the report omitted one fact… It didn’t mention how the warrant performed.
Based on everything you’ve read about warrants over the past two weeks, it shouldn’t surprise you to know the Bakkt warrants gained 472%, in contrast to the stock’s 234%.
That’s more than double the stock’s performance.
Look, “Frequency Bias” or not, it’s clear that warrants can be a great way to boost your returns.
Now, just as the “Trump warrants” weren’t a recommendation, neither are the Bakkt warrants.
We simply mention them to show you what’s possible with warrants. And hopefully, you may think about using them in your own investing. Next time you’re thinking of buying a stock… why not check to see if it has a warrant listed, too?
Just remember the risks involved – warrants tend to be more volatile. But they can also lower your risk by investing less money in the warrant than you would invest in the stock, while still giving you the chance to clock up a bigger gain.
Warrants may not be for every investor, but every investor should at least consider them before deciding on a course of action.
If you’re still on the fence, we suggest checking out the replay of Dave Forest’s recent webinar. He discussed warrants in detail – including an upcoming opportunity with Amazon that could result in 49 years of gains in one trade…
You can catch it here.
Editor, Casey Daily Dispatch