That’s how much paid-up Strategic Trader subscribers could have earned on a single trade if they acted on colleague John Pangere’s recommendation in June 2021.
That’s a market-smashing gain at any time.
And it’s especially welcome in a year when investors in stocks, bonds, and crypto are all taking hits.
But this gain didn’t come from stocks, bonds, or even crypto.
Strategic Trader launched in February 2019. Since then, John has been pounding the table on an often-ignored speculative tool for amping up the gains on stocks.
And he’s used it to give his subscribers the chance to close out trades for gains of 131%… 161%… 269%… 392%… 2,805%… even 4,942%.
And as he reminds them regularly, with gains like that, you don’t need large stakes to make potentially life-changing gains.
That last one turns every $1,000 into about $50,000. And it turns $10,000 into more than $500,000.
Instead, like Teeka, Jeff, Nomi, and the other experts here at Legacy Research, he had a successful business career before coming onboard.
He started out managing multimillion-dollar construction projects at his family’s business. Then he switched to finance and investing.
John worked as an investment banker for six years. And he helped raise millions of dollars in venture capital for start-ups (including Twitter) before they went public.
He’s traded stocks, currencies, futures, stocks, and options. But his preferred trading vehicle is something else entirely.
And if you didn’t work on private-funding deals, you may not have heard about them.
When Warren Buffett or Carl Icahn finances a company, they get shares in return like normal investors.
But because of their wealth and power, they can demand something extra to sweeten the deal.
And that something extra is the trading tool John uses to score these triple-and quadruple-digit returns.
It’s called a stock warrant.
Warrants allow you to pick up newly issued shares in the company at steep discounts if one condition is met. The share price must rise above a pre-agreed “strike” price before the warrant expires.
Often, investors sell their warrants. So, they trade on major exchanges after companies issue them. When you buy warrants on an exchange, you’re buying them from another investor.
Right now, you can trade roughly 1,100 warrants through your regular broker, on just about every kind of company you can imagine.
It’s something we talk about a lot here at the Cut. You want to speculate only when a trade is tilted in your favor.
You want a setup where the upside potential of trade greatly outweighs the downside risk. And one of the best ways to keep your downside risk low is to put only a small amount of money at risk.
And that’s the beauty of warrants.
You can usually control the same number of shares for less than you’d pay to own the shares directly.
If a stock is trading for $10, and its warrants trade for $1, you can control your shares for a tenth of the cost. If you have 100 shares, your downside is $100 instead of $1,000.
If the company is a dud, and its shares don’t rise above the strike price, you don’t lose much because they’re so cheap. If it does well, on the other hand, the warrants will shoot exponentially higher. And you win big.
That’s why Legacy Research cofounder and storied speculator Doug Casey says, “Symmetry is for suckers.”
Try all you like… But you won’t make a 1,725% gain in 18 months unless you have asymmetry in your favor.
Target Hospitality (TH) provides workforce lodging and catering services to oil, gas, and mining companies, as well as governments and non-profits.
Say an oil company wants to drill a new well. And it needs a crew on site for a matter of weeks or months.
Target Hospitality sets up temporary units for the crew. It also provides catering services in remote areas that may not have a town for miles around.
John recommended Target Hospitably warrants in June 2021 to play the oil boom. But as he reminded his readers in an alert last week, that’s not what’s been sending these warrants skyrocketing.
The company is helping manage facilities for migrants at the southern U.S. border. And due to the record number of migrants, these contracts now account for most of the company revenues.
Shares are not as asymmetric as the warrants. So, they don’t give you the “leverage” – or extra oomph – warrants do. Take a look…
At the time of John’s recommendation, TH shares were trading for $3.62. Yesterday, they closed at $15.01.
That’s about a 314% gain. And it would have turned a $1,000 stake into $4,140.
Not bad for an 18-month trade…
But the warrants John recommended were trading for $0.31. Today, they’re trading for $5.66.
That turns a $1,000 stake into $18,250.
Had this trade gone the other way, the warrants would have lost more than the shares.
That’s why John spends so much time making sure his subscribers are prudent risk managers, not wild-eyed speculators.
For instance, in July – after the Target Hospitality warrants exploded higher – he told his subscribers to take a “Free Ride.”
He recommended they sell enough of their position to earn back their original stake… and let the rest ride for free.
Any gains after this point are all upside. You’ve recouped your original stake. So, you have zero downside risk.
And that discipline has paid off…
Since we launched Strategic Trader, the average return across all the recommendations (open and closed) in the model portfolio is 124.4%.
You don’t need to be billionaire… or have a special brokerage account… to profit. But warrants can take a little getting used to.
That’s why John and his team have put together a special report… and a series of five training videos.
They’ll show you how warrants work… how to trade them… why they’re so profitable… and more.
To learn more, check out this presentation from colleague Nomi Prins. She recently teamed up with John and his team to bring more attention to this often-overlooked trading strategy.
Like with crypto, private shares, or any other speculation, you should never bet more on a warrant than you can afford to lose.
They belong in the speculative bucket. They shouldn’t be your plan A.
And just like stocks, not every warrant is a good deal.
That’s why John uses a three-step system to sift through the thousands of tradeable warrants for the handful that hold at least 10x potential.
Just one big winner – like a 50x return – can really move the needle on your wealth. Even if you risk only a small amount to start.
Editor, The Daily Cut