By David Forest, editor, Strategic Investor
4,847% in 20 months.
That’s enough to turn every $10,000 grubstake into $484,700.
And it’s the gain readers of my Strategic Trader newsletter are sitting on right now. In fact, our average portfolio gain is 187% in under two years.
I’ll understand if you’re skeptical about getting these kinds of returns on stocks in such a short period of time.
But these are not stock returns.
They’re also not bets on cryptocurrencies, options, bonds, or exchange-traded funds, either. They’re an entirely different kind of security that most investors don’t know about.
That’s a shame. Because it’s not unusual to see double- and triple-digit gains in a short time span when investing in these securities.
They’re called warrants.
This strategy is used by some of the world’s most prominent investors – including Warren Buffett. In fact, we even like to call warrants Buffett’s “No. 1 Private Investment.”
I’ll tell you more about them below… and why they represent a great opportunity to rack up big gains – without using options or cryptos.
Making Money Hand-Over-Fist
The company tied to that 4,847% gain is called Purple Innovation (PRPL). It’s an online mattress retailer that’s making money hand-over-fist by shaking up the mattress business.
It began as a company that developed cushions for wheelchairs. Its founder, a rocket scientist, had developed a unique pressure-relieving polymer grid for this purpose. And in 2013, it started using this same material to make mattresses.
If you’ve ever shopped for a new mattress, you know how unpleasant it can be.
But every so often, some innovative folks figure out a better way to sell products that millions of people need. And investing in those innovations can turn a small grubstake into millions.
The weak link in the mattress business is the extra cost tacked on by retailers. Direct-to-consumer companies represent a huge threat to the multibillion-dollar traditional mattress sales channels.
You may have seen the company’s products advertised on TV or online. It sells the Purple Mattress directly to consumers, cutting out the middleman and a host of fees.
The Stock Is on a Tear… But Warrants Blew It Away
Thanks to its innovative business model, Purple Innovation’s shares have been on a tear.
Keep in mind, I’m not recommending that you buy Purple Innovation stock now. The time to buy was last year. But while I believe it’s too late to get into this company now, it’s a great example of the power of warrants…
Over the past 20 months, the stock has more than quadrupled. It went from $5.59 a share to over $30.
Not too shabby. For regular investors, a 443% gain in less than a year is pretty satisfying.
But you shouldn’t have to settle for “pretty satisfying” returns.
We can do better than that with Purple Innovation’s warrants.
Check out the next chart…
As you can see, Purple Innovation’s warrants have climbed over 4,800% since our recommendation. That’s more than ten times the regular stock’s gain.
And there’s another benefit to warrants that you need to know about…
Big Profits, Low Risk
You can buy them at a fraction of the price regular shares trade at. When we first recommended Purple Innovation warrants in Strategic Trader, they cost 19 cents, compared to the regular share price of $5.59.
So if you bought 100 regular shares of Purple Innovation, you were in the hole for $559.
But if you bought 100 warrants, that only cost you about $19 – a difference of $540.
So even though you’re laying down a smaller stake, you’re capturing the explosive upside – while limiting your risk at the same time.
If a company’s stock soars, its warrants will soar, too.
Except the warrants increase value at a greater rate than the equivalent shares…
Bottom Line for Explosive Profits
If the company does okay, warrants will still be worth quite a bit of money. And if the company flames out, you’ve only staked a small amount anyway, so no harm, no foul.
But if the company takes off, like we saw with Purple Innovation… the gains speak for themselves.
Most people have no idea about the simplest way to make money from warrants. But now, we’re cracking this strategy wide open for you in my Strategic Investor newsletter.
And we have an exciting recommendation that’ll allow us to profit alongside two of the world’s most prominent billionaire investors.
Keep walking the path,
Editor, Strategic Investor
Like what you’re reading? Send your thoughts to [email protected]