Buy low…
It’s a surefire strategy for building wealth in the stock market.
As long as the company doesn’t go bust, it’s a mathematical certainty that the lower the price you pay for its shares… the higher your profits will be when you sell.
But when financial elites stack the odds against you, that’s easier said than done.
It’s why Teeka Tiwari, Jeff Brown, Dave Forest, and the rest of the Legacy Research team have made it their mission to level the playing field between Wall Street and Main Street investors.
And it’s why they’ve been so focused this year on how to buy shares in promising companies at the lowest prices possible.
For instance, in January, our tech expert, Jeff Brown, launched Blank Check Speculator.
As regular readers will know, Jeff is a Silicon Valley insider and an angel investor in early-stage tech companies.
He’s personally invested in over 260 of these deals… including crypto exchange Coinbase (COIN)… enterprise software company JumpCloud… and one-click checkout company Bolt Financial.
In Blank Check Speculator, Jeff recommends special purpose acquisition companies, or SPACS.
Also known as blank check companies, they’re backdoor ways to access pre-IPO (initial public offering) shares.
On a basic level, SPACs are simple to understand. They raise billions of dollars from investors. Then they use the money to buy private companies – aka target companies – and take them public by way of something called a reverse merger.
But there are several quirks of the SPAC market that take some time to get used to.
For instance, when you buy a SPAC ahead of its reverse merger, you don’t know what company it’s going to acquire. All you know is how much it’s raised… who’s on the management team (known as sponsors)… and what they’ve said about what they want to acquire.
That can be hard to get your head around. And it’s prompted this question for Jeff…
Reader question: Hi, Jeff. You are very knowledgeable about the SPACs you recommend, the industries they are in, and their management teams.
If a reverse merger was announced, and the target company was not on your list of potential targets or left you with less than full confidence in the merger, would you ask us subscribers to sell?
I know you trust the leadership. Otherwise you wouldn’t have recommended the SPAC. But your instincts may not always feel that a merger with whatever company was selected would gel with the SPAC.
– John S.
Jeff’s response: Hi, John. Absolutely. If I didn’t like the target company, or I didn’t believe in the target company’s forecasts, or I felt like the valuation was way off, I would recommend closing out that position.
When it comes to any of my recommendations, I would never rely on blind trust as an investment thesis.
SPACs have large shareholders who influence sponsors. It’s possible the sponsors merge with a less attractive company to get a deal done. That doesn’t mean it’s a bad deal or a bad company. But it could mean other investors sour on the deal.
Many new SPACs aren’t worth your money. I launched Blank Check Speculator to help folks find the best SPAC opportunities. We do this by choosing SPACs led by the best teams.
We look for teams with proven track records of making winning investments and with operating experience… or some other firsthand knowledge of the industry they’re targeting.
Often, we can predict the kind of company a SPAC will choose based on its team’s previous successes.
Several of the SPACs in the portfolio that haven’t yet merged are down from when I recommended them. That’s to be expected with so much uncertainty over what companies they’ll take public.
But we just got an example of the profit potential of SPACs. I issued a sell alert to Blank Check Speculator subscribers for a SPAC called Reinvent Technology Partners Y that merged with a private self-driving-tech company called Aurora Innovation. That locked in a 67% gain on shares. And at writing, the warrants associated with the deal are up 236% in the model portfolio.
The best part… These kinds of outsized gains are possible with almost no downside. If a SPAC doesn’t find a merger target, it returns its funds to investors, minus a small management fee.
If any readers are interested in joining us as we invest in this unique asset class, please go here for more information.
Switching gears, in last week’s mailbag, I brought you details of a little-known strategy for buying bitcoin at a discount.
Now, a reader wants to know whether a new type of investment product is about to increase the range of options for crypto investors.
Standing by with an answer is colleague and world-renowned crypto investing expert Teeka Tiwari.
Reader question: Is there any info regarding an ether ETF [exchange-traded fund]?
– Mara T.
Teeka’s response: Thanks for your message, Mara. After the successful launch of the bitcoin futures ETF in October – the second-largest ETF launch – folks are wondering about the possibility of an ether ETF. [Catch up on BITO, the bitcoin futures ETF, here.]
Since ether (ETH), the crypto associated with the Ethereum blockchain, and bitcoin (BTC) are the only two crypto assets the SEC [Securities and Exchange Commission, the main U.S. stock market regulator] doesn’t classify as securities, I imagine it will regulate the two assets similarly.
Considering the massive volume and institutional buying we’ve seen around bitcoin ETFs, an ether ETF could send ether beyond a $1 trillion market cap. That means ether could more than double from here.
We wrap up today by spotlighting renowned speculator Dave Forest.
He’s been on a hot streak this year at our International Speculator advisory. It’s where he targets junior mineral exploration companies with the potential to double or triple in 12 to 24 months.
In January, he closed out three winners in the model portfolio: a 104% gain on rare-earth-metals miner Lynas Rare Earths (LYSDY)… a 187% gain on prospect generator Azimut Exploration (AZMTF)… and a 326% gain on gold miner Pure Gold Mining (LRTNF).
Then in March, he closed out an 85% gain on uranium miner Blue Sky Uranium (BKUCF).
And he was only getting started…
In May, he recommended his readers sell shares in nickel and copper miner Ivanhoe Mines (IVPAF) for a 247% gain.
And in June, he closed out another triple-digit winner in the model portfolio: cobalt miner Jervois Mining (JRVMF) for a 241% gain.
Dave spent the past two weeks doing boots-on-the-ground research in Uzbekistan, Central Asia.
But he found time on his way back to answer this question about Path to Profits, his roundup of natural resource investing news.
It goes out once a week – for free – to subscribers of our Casey Daily Dispatch e-letter.
Reader question: Hello, I’m trying to discover how to deal with the advice you give in your Path to Profits emails. Sometimes, I do invest in stocks that are not officially recommended yet, and it works out fine. Is that the goal of Path to Profits?
I enjoy the articles in Path to Profits very much. But I wonder if they are there to offer ideas for our own personal investing, even though they are not formal recommendations.
Do you have suggestions on how I might use the information, even though I have not researched the sectors/industries on my own?
I wonder if other subscribers who are more advanced just invest without further guidance. I don’t want to waste all this valuable information. Thanks so much. I really appreciate your research.
– Suzanne M.
Dave’s response: Great question, Suzanne. I felt the same way… I had a lot of great info and didn’t want to waste it.
A little background… For years, I’ve subscribed to multiple news feeds on commodities and beyond. I get 50 emails every day updating me with the latest on copper, gold, nickel, and more.
I also track places I’m interested in. Right now, for example, I’ve got feeds on Uzbekistan, Colombia, and Indonesia.
It’s a lot of work screening all this data. But it pays off… In several cases, it’s alerted me to important trends well before the mainstream media caught on.
Path to Profits is meant to do the same for you – alert you to potentially important investment trends.
Some readers almost certainly use this to invest on their own. But you don’t have to.
These themes are the backbone of my research for our paid advisories. The trends I find will likely show up in formal recommendations.
Think of Path to Profits as a “sneak peek.” It’s fast and entertaining. And it gives you a heads-up on new ideas likely to come down the pike.
That’s all for this week’s mailbag.
Remember, if you have a question for anyone on the Legacy team, be sure to send it to feedback@legacyresearch.com.
Have a great weekend.
Regards,
Chris Lowe
December 17, 2021
Dublin, Ireland