1,333%… 2,805%… and even 4,942%.
These are some of the top gains colleague Dave Forest has been racking up in the model portfolio of our Strategic Trader advisory.
They’re not on crypto… or options… or private shares… or tiny biotech stocks.
They’re on a little-known type of speculation billionaires like Warren Buffett and Carl Icahn use to force massive gains out of the market.
But they’re not just for billionaires…
If you know where to look, you can access them through your regular brokerage account.
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What’s the secret behind these 1,000%+ wins?
And why don’t more people know about them?
It’s all in your Weekly Pulse update at the top of the page, with me and host Tom Beal.
Regards,
Chris Lowe
Editor, The Daily Cut and Legacy Inner Circle
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Transcript
Tom Beal: This little-known strategy that’s used by billionaires that we’re going to be discussing today has produced results above 1,000% return, upwards to close to 5,000% return. Imagine investing $1,000 and getting a return of $50,000… or investing $10,000 and getting a return of $500,000.
That’s what’s possible with this little-known, little-discussed strategy we’re going to be talking about today.
My name is Tom Beal, host of The Weekly Pulse, where we break down the biggest wealth-growth story of the week.
I’m here today with the editor of Legacy Inner Circle, Chris Lowe. Chris, how do we kick off today’s conversation?
Chris Lowe: Tom, today we’re going to be talking about a little-known type of investment folks watching this video can use right now to target gains of 1,000% and up on the megatrends we track for you here at The Weekly Pulse.
I want you to think of it as a way to supercharge the gains you can target in the regular stock market.
And this is not a prediction about these big gains. This is already happening…
One of the top speculators at Legacy Research, Dave Forest, has used this investment type to close out wins of 2,805%, and – wait for it – 4,942% in the model portfolio at our Strategic Trader advisory.
I almost did a double take when I did the calculation. That last gain is enough to turn every $10,000 grubstake into half a million dollars. So that gives you an idea of why we’re talking about it today and why I’m so excited about it.
And those aren’t just gains that Dave has closed out. The top open recommendation in the model portfolio at Strategic Trader is up 1,282%.
So how has Dave been giving his readers the chance to make these types of gains? It’s down to something billionaires like Warren Buffett, Jeff Bezos, and Carl Icahn use all the time to speculate in the markets. They’re called stock warrants.
Today, I want to do three things, Tom. First, I want to show folks watching this what stock warrants are. Number two, I want to talk a little bit about why they are such great speculations. And then, number three, we’re going to run a clip of a recent interview I did with Dave about why he’s so excited about stock warrants right now.
Tom: Well, you may have seen me smiling when you were mentioning those figures. Those are amazing figures. That has me excited. And just as a reminder for The Weekly Pulse viewers, I was late to the game of financial literacy. I know absolutely zero about stock warrants. So I’m excited to hear more about what you’re going to share with us here today, Chris.
But I got excited as you shared those figures. You mentioned $10,000 will get you half a million. Back it up a zero. $1,000 will get you $50,000. That’s a pretty darn good return. I am ears open and super excited to learn about this thing that I have zero knowledge of, to put it on the radar as to how it may helping me to build and grow my wealth. So I’m excited.
Chris: Yeah, Tom, and believe it or not, I’ve been in this game for 20 years – I’m a little bit surprised about that figure. I’d heard about warrants, but I didn’t really know what they were. I certainly had never seen anyone use them to the kind of effect that Dave has been using them. So it’s new for me, too.
I’ve been doing quite a bit of research. I’ve written about warrants in The Daily Cut. The thing to know about warrants is that they’re really a secret of the super-wealthy.
I mentioned Warren Buffett. He’s one of the greatest living investors. He used warrants back in 2008, during the global financial crisis? He actually bought warrants from Goldman Sachs when he bought regular shares from the bank. Those warrants netted Buffett $12 billion.
Now, that’s a huge amount of money. The reason these things are so profitable is that companies typically issue warrants to sweeten the pot for investors who buy their regular shares. So they are a kind of incentive that a company will issue to draw in someone like Buffett to buy those regular shares.
Dave finances a lot of natural resource projects. He’s a trained geologist and he’s traveled around the world. He has financed some of the big natural resource projects in the world today. And he’s seen the same thing. Billionaires get in the room, and the first thing they say when they’re discussing a deal is, “Show me the warrants.”
Basically, a warrant gives you the right, but not the obligation, to buy a company’s shares if they go above a certain price, called a strike price. So without getting too deep into the weeds, as long as a company’s shares go above that strike price, you can use those warrants to buy those shares at a fraction of the price that you’d pay ordinarily.
The main thing to understand is that warrants are incentives. They’re issued by companies to draw in big investors. And because they’re an incentive, if those shares go up above that price, you get to buy them at a fraction of the price that you would ordinarily be able to get them for.
Tom: Thank you for that description. That gives me a clear understanding. If you suspect that this company is looking for some massive growth, this is a way to secure that without actually getting the stocks at that price.
It’s speculative, like you said, “Hey, I think it’s going to go up,” and if it does reach that price, now you can secure those shares at that lower price.
Although I’m not a sports gambler, I’ve heard of the term over/under. So if there’s an American football or a soccer game, they pick a number. And if you bet over, and it goes over that number, you’re able to capitalize. It sounds like this is a similar type of wager.
When you see a company that has great growth potential, you can get the warrants, and if it goes over that number, you’re able to capitalize largely. Sounds pretty exciting.
Chris: Yeah, that’s right. Here at Legacy Research, we have a favorite type of speculation called asymmetric investments. An asymmetric investment is one where the potential upside greatly outweighs your potential downside risk. Of course, there’s risk in every type of investment we make. But with warrants, the dollar amount you’re speculating with is much less than you would pay to buy the shares outright. So you can control your risk.
I’ll give you a simple example. If shares in a company trade for $10 and its warrants trade for just $1, the warrants let you control the same number of shares for a tenth of the cost. So if you control 1,000 shares via warrants, the most you can lose is $1,000. That’s 1,000 times $1. That’s instead of the $10,000 you’d have to pay if you wanted to just buy those shares.
Now, of course, those shares have to go above that strike price before you can control them. But if they do, you get those shares very, very cheap. That’s why you get those explosive gains.
So I want to just dig in a little bit to that huge gain in the Strategic Trader model portfolio – 4,942%. Let’s call it 5,000%. It was on warrants issued by an online mattress retailer called Purple Innovation.
At the time of the recommendation, the regular shares in Purple Innovation were trading for $5.75. But get this – the warrants, at the same time, were trading for 19 cents. So that’s the difference you can see when you’re looking at warrants versus regular shares – $5.75 versus 19 cents.
And that translated into a huge difference between the regular shares and the warrants. So the warrants went up nearly 5,000% between February 2019 and October 2020. That was the duration of the recommended trade.
But the regular shares only went up 432% over that time. Here’s a chart of what that looks like.
The warrants outperformed the regular shares by 11.5 times. That’s it in a nutshell.
Warrants are extremely cheap to buy. If the company does well and the shares go above that strike price, no matter how high they go above that strike price, you still just pay that strike price.
So it’s just a very, very economic way to pick up shares. And as a result, if it pays off, the gains are absolutely massive. That’s why you’re seeing gains in the thousands of percent when warrants pay off, versus maybe the hundreds of percent when regular stocks pay off.
And the beauty of it is you don’t have to put as much money down to begin with. So at the same time as the payoff is bigger, the risk, in terms of the dollar amount you have to lay out to be able to get those returns, is much, much lower.
So that’s warrants in a nutshell. And that’s why Dave is so excited about them.
Tom: I loved how you said, “only 432%,” or something in that ballpark, that the chart showed. That’s a significant gain in and of itself, if you’ve got the stock. That’s 432%.
However, in the Legacy Research Group world, the thousands of percent is much better. Like you said, 11 times more than that huge return.
So my question – and I’m sure I’ll find out more about this as we learn from Dave and in upcoming discussions on this – is, my guess is if I think Purple’s stock is going to grow, I’ll probably get some stock. But I’d probably get some warrants as well.
So it’s not one or the other, is my guess. Many times, I’m guessing people take both. And yes, you’re going to get the 432%. But you’re also going to get the amazing returns if it breaks that point for the warrants. Is that a correct assumption?
Chris: That’s right, Tom. That’s what guys like Warren Buffett, Carl Icahn, and Jeff Bezos do. They will take shares, but they’ll take the warrants as that sweetener.
In the Strategic Trader portfolio, Dave’s explicit mission is to target gains of 1,000% and up. So he is just looking at those warrants.
Now, of course, not all the warrant recommendations Dave makes pay off. But if you’re getting 50-1 on one of those, and 20-1 on another, those gains outweigh the losses or the average returns you might get on the other warrants trades you make. That’s how it works.
So why don’t we watch that clip? I talked to Dave earlier about why warrants are so attractive, particularly at this moment in the stock market.
Chris: So how do you see warrants fitting into a regular portfolio of someone who’s trying to move the needle on their wealth, without putting everything on the line, and risking a very calamitous downside?
Dave Forest: You said something really important there, Chris: moving the needle on your wealth. I think a lot of us have the sense today that it’s getting really hard to do that. S&P 500 dividend yields are at or near all-time lows. Bond yields are basically nothing. They’re negative, in some cases.
Where do you go to grow your wealth in this? That’s a very important question.
People are looking at cryptos. They’re looking at alternative investments. They’re looking at SPACs. They’re looking at pre-IPO plays. All of these are great.
I would encourage everybody to look at those things because we’re in a time when you do have to think differently about how to grow your wealth. The strategies that worked in the last 50 years, probably in the last 500 years, just don’t work today. We’re in unprecedented territory.
The great thing about warrants as part of your alternative investment portfolio is that they don’t take much to get into. So you don’t need to put a huge portion of your wealth into this to have the potential to make a big difference to your portfolio.
You might be able to make enough on one or two plays to make a meaningful difference to your ability to retire, or your ability to travel, or your ability to do the things you want.
And the other thing about warrants, unlike a lot of those other types of alternative investments, is that they’re easy. So if you’re a little worried about, “What does it take to get into crypto? I have to open a wallet. I have to do a bunch of other things. Pre-IPO investing involves a lot… There are things you have to do with all of these”…
You do not have to do anything different to get involved in warrants. There’s no paperwork, there’s no special things. If you own a brokerage account, a regular online brokerage account, warrants are in there. You can point and click and be trading. You can get started today.
We’ve put together a whole course for anybody who wants the details. We have five videos that tell you exactly how to get started, what warrants are.
But you don’t even really need to watch those videos. You could read our primer, our guide to warrants, and you’ll be ready to go in a single day. You can point, click.
And it’s easy to get out, too. It’s easy to sell when you need to take profits. This is just like buying regular stocks, but better, cheaper, and faster.
Tom: That’s what I love about being a part of Legacy Research Group. And Chris, what you bring to the table through Legacy Inner Circle and the experts of Legacy Research Group, what Dave just shared, solidified it more for me.
Now, I get more excited about learning more and seeing how this can help me grow and protect my wealth in the upcoming future.
Chris: There’s an opportunity tonight at 8.00 p.m. to do exactly that. Dave is going live with his first ever webinar at Legacy Research. Dave hasn’t had a webinar. You’ve probably seen Teeka Tiwari and Jeff Brown host webinars, but Dave hasn’t yet. But this idea is so big that he is going to be talking all about it at 8.00 p.m. Here’s a link so folks watching can join Dave. It’s free to attend.
So if you’ve been watching this and you’re interested in targeting those gains of 1,000%+ on the different stock market sectors, click the link to register.
That’s another important point, Tom. You can play warrants in 5G. You can play warrants in self-driving cars. You can play warrants on precious metal stocks, energy stocks. It’s a way to, like we talked about earlier, juice those gains that you regularly target in the stock market and be in the running for gains of 50-1 and up.
So I hope folks who are watching this do sign up for Dave’s webinar, if they haven’t already, and that they head on over to Dave’s big event tonight at 8.00 p.m.
Tom: My hand was raised. “Do you want gains of 1,000%, 2,000%, 3,000%, 5,000%?” Yes please! Sign me up!
I’m excited to join in and learn more about these warrants and see how it might be a way to help me grow and protect my wealth in the upcoming weeks and months.
So thank you, as always, Chris, for bringing this knowledge to us here at The Weekly Pulse. Looking forward to the webinar this evening. Thank you.
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