By John Pangere, CFA, senior analyst, Strategic Investor
After a rough start, 2020 was a breakout year for investors.
Tech companies led the way in stocks. We saw the tech-heavy Nasdaq up 43%. Names like Zoom, Tesla, and Teladoc made gains of 396%, 743%, and 139%, respectively.
Bitcoin was up 301% in 2020. That’s good enough to make it the best-performing asset of last year.
Even “boring” gold had double-digit returns in 2020 – going up 25%. It was the biggest rise in gold prices since 2010.
Now, if you invested in any of these assets – you should pat yourself on the back. You’re probably sitting pretty right now.
But I’m not here to tell you about what did well last year…
I’m here to tell you which asset is going to outperform all the others this year.
And the star asset in 2021 won’t be tech stocks… gold… or even crypto. I believe it will come from another, off-the-radar asset…
One that can turn $19 into $958… in less than 18 months.
That’s nearly a 5,000% gain. I’ll tell you more about it below…
An Asset That Will Blow Away 2020’s Biggest Stars
It’s easy to see why some people think the breakout star of 2021 will be assets like bitcoin.
Toward the end of the year, bitcoin started hitting its stride. It’s largely been a one-way trade.
As I write, one bitcoin is worth $35,000. That’s a 550% gain since its March 2020 low.
And major institutional investors are starting to pile in.
For instance, tech firm MicroStrategy bought $1 billion of bitcoin last year, worth about $2.5 billion as I write.
Others, like insurance giant MassMutual, are just getting their feet wet. The company invested $100 million into bitcoin late last year.
But that’s not the only focus for investors. For instance, special purpose acquisition company (SPAC) deals reached an all-time high of 248 in 2020. SPACs give companies another option to go public…
And they provide another, easier way for investors to make money. Instead of waiting for a traditional IPO – in which early, accredited investors reap most of the rewards – a company can go public by merging with an SPAC.
For instance, online sports betting company DraftKings (DKNG) went public through an SPAC last April. It was one of the largest SPAC deals ever at the time. Investors piled in, and are sitting on 238% gains in nine months.
Now, I’m not saying bitcoin and SPACs won’t continue to see record growth in 2021… and make money for those invested. They’ve got a lot of momentum and excitement.
But I believe there’s another asset that could blow away the returns we saw in bitcoin and SPACs – combined.
With much less risk.
The Breakout Star of 2021
In our premium service, Strategic Trader, my colleague Dave Forest and I have been recommending a little-known type of security that gives us massive upside with limited downside. We look for bets with a chance at a 10-to-1 or more return-to-risk ratio.
That’s like turning dimes into dollars.
I’m talking about stock warrants. A stock warrant is a security that gives the holder the right (but not the obligation) to buy a share of stock at a fixed price at any time during a predetermined period.
Anyone with a brokerage account can buy them. No options agreement, no margin account, and no special accredited status. And the best part is, you’re not on the hook for any shares.
You can buy them and sell them just like a stock. And they often produce far greater returns, offering leverage to a rising stock price.
The Explosive Potential of Warrants
For instance, readers of Strategic Trader already cashed in on multiple major winners using warrants. That includes a 4,942% return in warrants of Purple Innovation (PRPL). It’s the company behind the Purple mattress.
The best part: investors didn’t have a chance to earn those same types of gains owning the stock. Not even close.
In fact, the Purple Innovation warrants outperformed its stock by over 11x!
Readers also had a chance at a 29x gain in the warrants of electric vehicle charging company Blink Charging (BLNK). Blink Charging warrants outpaced the stock by about 4x.
Keep in mind, I’m not recommending Purple Innovation or Blink Charging warrants today. I’m just using them as an example.
The point is, warrants offer massive profits without breaking the bank. It only takes a little bit of money to capitalize.
When we first recommended the Purple Innovation warrants, shares were trading at $5.75. But the warrants were trading for just 19 cents. And readers could have gotten Blink Charging warrants for just $1.
This means you could have bought 100 Purple Innovation warrants for $19… and sold them later for $958.
And the best part? You can play just about any emerging trend with warrants.
How to Put Warrants to Work in Your Portfolio
Electric vehicles, cannabis, sports betting… they’re all emerging trends. Sure, you can buy stocks of companies in those sectors. But you don’t need to because there’s a warrant for that.
2021 is shaping up to be an interesting year. Investors are looking for the next big breakout star. As we said above, some think it could be bitcoin. Others are saying SPACs.
But for our money, it’s warrants.
We’ve been recommending warrants to readers of Strategic Trader for nearly two years. But we don’t want anyone to miss out on their explosive potential in 2021.
That’s why we decided to bring warrants to our Strategic Investor advisory, too. Because while warrants are easy to trade… they’re hard to find and research on your own. That’s because it’s one of the best-kept secrets of billionaire investors. In fact, we often call them Warren Buffett’s No. 1 private investment.
That’s why Dave and I spend hours scouring company filings with the most expensive research tools there are. That’s the only way to find the best warrants with triple- and quadruple-digit gains potential.
We even put together the first-of-its-kind, five-video Warrants Master Course to help you get into warrants with ease. (Current Strategic Investor subscribers can review that here.) It’ll walk you through everything you need to know before trading warrants… and reveal our top pick to get you started.
If you’re interested in accessing it… and learning more about the explosive potential of warrants… go right here.
John Pangere, CFA
Senior Analyst, Strategic Investor