Kris’ note: In yesterday’s Dispatch, we looked at the incredible performance of a little-known investment called warrants. So few investors know about them that we’d guess fewer than one in 1,000 investors know they exist.
And yet, over the past two years, Dave Forest and his team have shown a select group of investors not only how they work… but how to collect multidigit-percentage gains. These have resulted in realized profits of as much as 4,942%, 2,805%, and 392%. And one of his current open positions is up 1,563%.
Anyway, we thought about writing to you again about these stunning trades. But instead of hearing from your editor, we thought it best if you heard directly from the investing expert himself: Dave Forest. So that’s what we have for you today. Read on to discover more about the power of investing in warrants…
By David Forest, editor, Strategic Trader
It was our top trade of 2020 at Strategic Trader. In fact, it’s one of the greatest calls of my career. And readers made those gains from a “boring” mattress company.
I’m talking about Purple Innovation (PRPL). Some of you may know Purple. It’s the company behind the Purple Mattress. You may have seen some of their humorous ads, like this one.
Purple happens to be one of the pioneers upending the decades-old mattress business by selling directly to consumers.
When we first recommended Purple in our Strategic Trader advisory, we told subscribers that the company was on the verge of breaking out. Sales were growing at double-digit rates, and it was only a matter of time before investors caught on.
But there was a catch: we didn’t invest in the stock… we didn’t buy options… and Purple didn’t release its own crypto coin.
Instead, we recommended a little-known way to speculate on all the upside… with less money at risk.
That’s because there’s a secret I’ve been using for years in my personal portfolio. It’s a way to supercharge your returns – without ever having to buy a stock.
It’s something called “warrants.”
My guess is 99% of you have never heard of warrants. That’s by design.
Warrants have been around for decades. But they’re usually reserved for the wealthiest and most connected investors… like Warren Buffett… George Soros… and John Paulson.
I’ve invested in some of those private deals personally. In fact, I rarely look at a private investment unless warrants are involved.
But almost two years ago, we decided to blow the doors off this little-known market. That’s because warrants don’t just change hands in private deals. Some of them trade on public markets.
So we thought, “Why should only connected speculators have access to these life-changing returns?”
Turning Dimes Into Dollars
For those of you who aren’t familiar, warrants are one of our favorite trading tools. As I said before, they give us all of the upside of a stock… but at a fraction of the price.
Warrants give holders the right – but not the obligation – to buy shares of a company at a specified price or better.
That may sound a lot like stock options. But they’re not.
The difference is, warrants are issued directly from the underlying company. And you don’t need any special permission in your brokerage account. All you need to do is click and buy, just like with any other stock. It’s that simple.
As I said above, warrants allow you to speculate on all the upside of a company… while putting less money at risk. Purple Innovation is a perfect example of that.
When we first recommended the warrants, shares were trading at $5.75.
But the warrants were trading for just 19 cents.
A $1,000 investment in Purple would give you 174 shares. That same amount could buy 5,263 warrants.
And take a look at the charts below…
After less than two years, Purple shares moved 431%. That’s a great trade by any standard. That’s enough to turn your original $1,000 into over $5,000.
But the warrants obliterated the stock, rising 4,942%. The warrants outperformed the stock by over 10 times.
That’s enough to turn that $1,000 into over $50,000… on the same company!
That’s life-changing for most investors. But that’s just the beginning.
The trick is to try to do this over and over again. And so far, we have…
Wash. Rinse. Repeat.
Some of you may be skeptical. Maybe we got lucky, just this once. But Purple isn’t a fluke.
Just one month after we closed out the Purple trade, we did it again on Blink Charging (BLNK).
Regular Dispatch readers know we believe electric vehicles (EVs) are the future of transportation. The problem is, the infrastructure to support mass adoption just isn’t there yet. It’s a massive problem.
Blink is one of the companies solving it, leading the way in EV charging stations.
That’s why we recommended the company’s warrants. And in November, we cashed out with a 29x gain in under two years.
Then, just one week later, we alerted our readers to take profits on another. This time, it was a warrant to play the 5G boom. We booked a 7x return… in six months!
And this wasn’t even a sexy tech company.
Nesco Holdings (NSCO) is a specialty equipment rental company. It rents things like cranes and boom trucks to install telecom equipment. And yet, readers still made multiples of their money in a short period of time.
Keep in mind, we’re not recommending these stocks or warrants today. But they illustrate the powerful profit potential of warrants.
I’ve seen this play out time and time again. I’ve personally made 10x-plus gains multiple times over the years with warrants.
That’s why my senior analyst John Pangere and I felt the need to share this secret with our readers.
At writing, we’re sitting on gains of 163%, 190%, even 1,563% with some of our other recommendations.
But we’re just getting started.
There’s a Warrant for That
The real magic is that whatever major trend is happening in the market, you don’t need to buy stocks. It’s almost certain you can play it with warrants.
Electric vehicles? We’ve done that.
5G? Play it with warrants.
Autonomous driving? Esports and sports betting? The gold bull market? Warrants have you covered.
Remember, even something as “boring” as a mattress company turned $1,000 into over $50,000. That’s a life-changing return.
Now, imagine what happens when we see the perfect storm: a massive trend… with major investor excitement. The potential to see 100x returns is there.
Sure, you can get a 100-bagger with stocks. But that could take decades. Just look at Amazon. It took 20 years to go 100x.
Warrants give us the chance to do the same in just a few short years… or even months. They’re truly a path to financial freedom – without risking your life savings.
For most people, stocks are for your serious money. That’s what will help you live comfortably into retirement.
But a speculative portfolio of warrants like John and I recommend in Strategic Trader can change your life. They can help you buy that Ferrari you’ve always wanted… or put a down payment on a house.
If you want to put this life-changing strategy to work in your portfolio… I urge you to check out my briefing here. I go over everything you need to know about what warrants are… their explosive profit potential… and reveal my top three picks to get you started.
We ended 2020 on a high note. Now, we’re looking to do even better in 2021 and beyond.
I hope you’ll join us along the way.
Keep walking the path,
Editor, Strategic Trader