By David Forest, editor, Strategic Investor
4,942% in 20 months.
That’s enough to turn every $1,000 grubstake into over $50,000.
And it’s the gain readers of my Strategic Trader newsletter saw in October.
You might be thinking that sounds too good to be true… or that I’m cherry-picking an exceptional case.
But another of our Strategic Trader recommendations, Blink Charging warrants, returned 2,805% in under two years. That’s enough to turn a $1,000 investment into $29,050.
Four other warrants in our current portfolio are up between 130% and 669% as I write. And I believe they could see explosive growth like Purple Innovation and Blink Charging
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 cryptocurrencies, options, bonds, or exchange-traded funds, either. They’re an entirely different kind of security that most investors have never heard of.
That’s a shame. Because it’s not unusual to see double-, triple-, even quadruple-digit gains in a short time span…
Making Money Hand-Over-Fist
These investments are called warrants.
Now, if you’ve never heard of warrants, that’s by design. It’s not a strategy most everyday investors are aware of.
But warrants are used by some of the world’s most prominent investors – including Warren Buffett. We even like to call warrants Buffett’s “No. 1 Private Investment.”
That’s because they offer a great opportunity to rack up big gains – without using higher-risk investments like options or cryptos. In fact, one of my favorite things about warrants is you can use them for outsized returns… even in “boring,” everyday, easy-to-understand sectors.
Take the company tied to that 4,942% gain, Purple Innovation (PRPL). It’s a very basic business. You may have seen the company’s products advertised on TV or online. It’s making money hand-over-fist by shaking up the mattress business.
The weak link in the mattress business is the extra cost tacked on by retailers. Purple is an online mattress retailer that sells its Purple Mattress directly to consumers, cutting out the middleman and a host of fees.
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. But while I believe it’s too late to get into this company, it’s a great example of the power of warrants…
The Stock Was on a Tear… But Warrants Blew It Away
Over the 20 months that we owned the warrants, the stock 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 two years is pretty satisfying.
But you shouldn’t have to settle for “pretty satisfying” returns.
We can do better than that with warrants.
Check out the next chart…
As you can see, Purple Innovation’s warrants climbed over 4,900% over the time we held them. That’s more than ten times the regular stock’s gain.
But there’s another benefit to warrants that you need to know about…
Big Profits, Low Risk
You can buy warrants at a fraction of the price regular shares trade at.
When we first recommended Purple Innovation warrants in Strategic Trader, they cost just 19 cents. The regular share price of the stock? $5.59. That’s 30 times more expensive.
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 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. No harm, no foul.
But if the company takes off… like we saw with Purple Innovation… the gains speak for themselves.
As I said above, most people have no idea about the simplest way to make money from warrants. But I don’t want any of our readers to miss out on the explosive potential…
That’s why I’m cracking this strategy wide open for you in my Strategic Investor newsletter.
I put together the first of its kind, five-video Warrants Master Course to help you get into these life-changing picks with ease. Just go right here for all the details. It’ll explain, step by step, exactly how to trade these warrants right from a regular brokerage account. And reveal my top pick to get you started.
Keep walking the path,
Editor, Strategic Investor