Editor’s Note: As Chief Investment Strategist of Total Wealth, Shah believes in making his track record of recommendations easily accessible to all readers within seconds – and that’s why he’s compiled an Archives page.
Mar 31, 2021
In the first of my three-part series on SPACs, I outlined exactly what Special Purpose Acquisition Companies (SPACs) are, how they work, and the 400%, 500%, or more in gains they can yield investors.
Unless you’ve been hiding from the market, and heaven help you if you have been, you know SPACs are the hottest sector out there right now, and with good reason. There are new SPAC IPOs being minted literally daily, sometimes two or three a day. Traders are playing them, and investors are plowing into them. And there are going to be spectacular winners. And there are going to be lots of losers.
What you need to know, because there are so many SPACs coming out, is which ones are going to be the winners and which ones are going flounder or fail. Because, needless to say, not all SPACs are created equal, and any advice you’ve heard about skimming the cream of the SPAC crop is probably very wrong.
While the likes of QuantumScape Corp. (NYSE:QS) can hit a whopping 1,200% peak during their run, other enticing-looking SPACs can be snakes in the grass. The difference between knockout winners and bottom-of-the-barrel slugs isn’t always obvious.
That’s because there are lots of nuances, lots of details that matter when it comes to SPAC sponsors and founders, the teams they convene to look for acquisition targets, the price they pay for operating companies, how those acquisition targets are valued before a deal is reached, who invests in target companies under what deal and valuation terms before they are acquired, who are the investors providing PIPE (private equity in public companies) financing for the acquisition/merger deal and what are their incentives and deal terms, how much operating capital will be injected into the new company, what are its real prospects?
Those aren’t hard questions to answer. In fact, the answers are simple, you just have to know where to look for all those details, because they’re out there. They’re in deal documents, in disclosures, in regulatory filings, in proxy materials.
They’re everywhere I look. And I look everywhere.
But you may not be looking everywhere, so to consistently cash in on the winners while dodging the losers that could drain away your profits, you need a powerful but simple strategy to follow.
You can’t go anywhere these days without hearing about “SPACs,” and there’s a good reason for that.
Wall Street refers to these by their technical name, “Special Purpose Acquisition Companies,” but I see them for what they are: “New Age IPOs” that can give retail investors a way to cash in on newly minted companies.
Wall Street and retail investors alike had a stellar run with SPACs last year, and now SPACs are outdoing themselves this quarter, becoming one of the hottest trading opportunities on the market right now, yet so few people know about SPACs.
This is a major trading opportunity I don’t want you to miss. So, here’s what’s in store for you this week:
I’ve got three special reports on SPACs – what they are, how to play them, and a recommendation to round off the whole series – heading to your inbox over the next few days.
You’re going to get the all-inclusive, grand tour of SPACs. Ins and outs, nooks and crannies… my team has researched it all so you don’t have to.
Today, you’re going to get to know SPACs, get friendly with them, so you know what you’re trading and why before we launch into how to buy and how to profit.
Mar 29, 2021
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Investor Peter Lynch achieved “legend” status during the 1980s – and it wasn’t just because of his best-selling book One Up on Wall Street.
It was the fact that he made a lot of mutual fund investors rich.
While helming the Fidelity Magellan fund from 1977 to 1990, Lynch delivered an average annual total return of more than 29% – a performance that would have turned a mere $10,000 investment into $280,000 at the time he decided to leave.
But I’m going to let you in on a stunning secret: Most of the huge gains Lynch made for investors was due to a strategy that almost nobody ever talked about.
And Lynch wasn’t alone.
Legendary hedge fund manager and value player Seth Klarman has used this strategy throughout his career. Edward Thorp, one of the best arbitrage and quantitative investors of all time, continues to use it.
And this is why, in Tuesday’s article, I told you to hang on to your bank stocks. There’s still money to be made on banks – and it’s with the same strategy that made these men filthy rich.
The strategy itself is as simple as it is powerful, yet virtually no retail investor uses it.
Heck, most investors don’t even know about it.
Mar 24, 2021
Click here to download the PDF version The way capital markets operate has changed and continues to change, and it’s further altering how we trade and invest. Amidst all those changes, the one constant thing is what subscribers ask me: …
Mar 23, 2021
Bank stocks have had a really good run higher lately, but last week and early this week, they’ve been hit hard as investors seem to be fleeing the country’s biggest and most profitable bank names.
Those investors are making a huge mistake – and I hope you’re not one of them.
In fact, now’s the best time to buy bank stocks.
Mar 18, 2021
Yesterday’s official U.S. Federal Reserve “statement” on the economy, unemployment, inflation, and interest rates was simple, straightforward and unsurprising – in short, just what the markets needed.
The few upgraded projections in the central bank’s commentary – which might have scared investors – were tempered with coddling commentary about staying-the-low-interest-rate course until the Fed’s dual mandates are met.
And if that wasn’t clear and comforting enough, Fed Chairman Jerome Powell in his follow-up press conference, handled some tough questions with temperate answers, assuaging our fears with a tacit promise that no surprises would jump out anytime soon.
The markets could be rocked tomorrow by something called a Quadruple Witching Day, a day in which single-stock options, single-stock futures, and stock-index options and stock-index futures… the works are coming up for expiration. And depending on how the market closes today, we could see some major waves going into next week.
The One Thing I’m Watching Now – The FOMC and How to Protect Your Investments from a Worst-Case Scenario
As broad as the markets are, as vast as the economy is, as much data as there is to key in on out there, there’s one thing I’m watching now that matters more than everything else.
It’s what the Federal Reserve’s going to do, or not do, to interest rates.
Because based on what Fed members on the Federal Open Market Committee (FOMC) decided in their two-day meeting, which gets released as their official “statement” today at 2:00 pm, will either calm markets or could knock them off their recent all-time highs, down maybe 10%-15%, or more.
All that stimulus money you’ve gotten, all the new stimulus money you’re going to get, don’t spend it. You’re going to need it when the inevitable Biden-Harris wealth wipeout hits you and the country.
Remember what I always say – it’s all good, until it isn’t.
You remember the Affordable Care Act and how good that was going to be, don’t you? Now politicians of the same ilk are making promises about how good life’s going to be with all the free money they’re showering on you.
But just like with Obamacare, which cost Americans dearly, this “free money” parlor game is more like a three-card monte. It’s sleight-of-hand; the money you’re getting isn’t free. Nothing’s ever free.
The truth is this brazen political coup is going to bankrupt you and America.
Here’s what one-sided, one-party, ramrodded legislation is really about, how it’s going to wipeout our democracy and your wealth.
On Tuesday I warned you the bond bogeyman was coming (click here to read that article), and he threatened the life of the “everything rally” we’ve been enjoying recently.
Now he’s here to stay, and he’s bringing a new normal with him. The question now is, with bond investors feeling the pain of rapidly rising rates on the long end of the curve and stock investors feeling their pain and even more of their own, how long will this new normal last?
And the truth is, you don’t want to hear this. So, if you’re sensitive or risk-averse, close out this article now.
But for those of you brave enough to handle what’s coming – and take advantage of the profit opportunities the bogeyman’s brought along with him…
Just when you thought it was safe to invest in anything and ride the “everything rally” to the moon, the bond bogeyman raised his scary head last week and sent shivers down every market’s spine.
The yield on the Treasury 10-year note had been ticking up, from an average of 0.65% through last summer, to 0.85% by late November, to 1.11% at the end of January, to last week when it shot up to 1.61% on Thursday.
Where did this bogeyman come from? And what does he want?
I don’t want to burst anyone’s bubble, especially not the everything rally’s party, but the benchmark 10-year Treasury rate is starting to look like the head of a pin.
Bubbling stocks and other inflated asset classes are in danger of popping if rates keep rising, and they sure look like they’re going to keep climbing. But even if the bubble pops, we can still turn a profit, and I’m going to tell you how.
Maybe you haven’t noticed, but everything’s rallying.
Every asset class, every tradable instrument is stampeding higher in its own bull market. There are many reasons for this, but that’s not what I want to talk about today.
Instead, today, I want to talk about cryptocurrencies, specifically Bitcoin, or bitcoin with a small “b.” Bitcoin’s been all over the news lately, and before you hop on its train to buy it, you have to know the facts.
It’s finally happened. Someone’s created the ultimate trading contract.
It’s something so simple; it’s a binary contract that you either bet “yes” or “no” on. It’s expansive, meaning you can bet on almost anything. It’s something that’s going to be insanely successful, meaning billions of contracts will trade every day. It’s something so cheap, meaning a contract will at most only ever cost $1.00. It’s something you’re going to trade.
What is it? Well… it’s Kalshi, a platform for anything and everything. And it’s going to revolutionize the game in more ways than one.