By E.B. Tucker, editor, Strategic Trader I don’t like the stock market right now. That doesn’t mean all stocks, of course. There are standouts, like gold stocks and the world-class, “recession-proof” companies that I recommend to my readers. But overall, this is not a time to be pouring money into the broad stock market. Worse yet, many older Americans have their life savings riding on the stocks that lifted the market for the last decade. Amazon, Facebook, Apple, and other household names make up a large part of index funds owned by the American investing masses. These stocks are fully valued. That means the days of huge growth are over. Sure, they’ll stick around. They’ll even grow. But that does not mean their share price will necessarily go higher. With what I see on the horizon, I’ll share with you my version of the perfect investment portfolio. As we approach the fall, a historically common time for market crashes, this is what I’d be most comfortable with: 90% cash, 10% warrants. | Recommended Link | Take a Look at This Brand New 5G Device Jeff Brown’s found a new 5G device. It’s about to be put in every smartphone in America, and he’s unveiling it for the first time. (He says it’s even more valuable than the device he revealed in his presentation at the Shubert Theatre earlier this year.) The best part? The company behind it is a micro-cap. | | | -- | How Warrants Work Warrants give the holder the right to buy a newly issued share of stock directly from a company at a fixed price at any time before they expire. In simpler terms, it’s a better way to make more money than just buying a stock outright… and it’s also a much cheaper way to get in. Warrants are as easy to trade as common stock. But they offer far better returns because they essentially offer leverage to a rising stock price.
I get into more details on warrants here… but this is an easy way to see how they work… If a stock trades for $10 today, you might pay $0.50 for a warrant, giving you the right to buy a share for $15 at any time in the next five years. Owning that warrant means if the stock doubles to $20, the value of your warrant goes up 1,000%. (Exercise the warrant for a $15 share, sell the stock for $20, and keep the $4.50 difference as profit on the $0.50 paid for the warrant.) Holding a portfolio of warrants means you keep exposure to continued stock market gains. And warrants trade for a fraction of the share price. 1,000 shares might cost $10,000, while 1,000 warrants might cost $500. Since warrants give you the right to buy stock at a fixed price, you’ve got skin in the game. You can hold the rest of your portfolio in cash. This way, if the market takes a big dive, you’re standing by with cash ready to sweep up the best companies. | Recommended Link | Is this the end for America’s #1 tech company? George Gilder has been called “The Technology Prophet.” He predicted the iPhone technology 13 years BEFORE its release. And now he’s calling for the fall of probably the most powerful tech company in America. | | | -- | Surviving the Coming Storm In September 2008, I sold a portion of my largest stock holding at the time, Lincoln National (LNC). I knew something was wrong at the time. But I didn’t know LNC stock would fall 90% over the next 60 days. If I did, I would have sold all of it, not just a portion. However, the sale I made at $55 per share gave me what later felt like a lot of cash to go shopping during the worst market rout of my lifetime. At $9 per share, I bought back more LNC shares than I sold two months earlier. I also bought gold for $700 an ounce, silver for $9 an ounce, and several other holdings. Cash is king during a market rout. You’re standing by ready to pick up the deal of a lifetime. Having a portfolio of cash and warrants is even better. If storm clouds dissipate and stocks keep running higher, warrants keep you in the game. If stocks tumble, the cash turns you into a king. These are unique times. The Federal Reserve seems dead set on supporting the stock market at all costs. Economists urge the Fed to buy stocks if necessary. That amounts to a permanent government subsidy for retirees selling stocks to the Fed. We can’t imagine it working. But it might. If what’s brewing now ends in a crash, Fed support, or something in-between, a cash-and-warrant portfolio seems like the best way to survive. Regards, ![[signature]](https://d1w116sruyx1mf.cloudfront.net/ee-assets/channels/article_default/eb_sig.jpg) E.B. Tucker
Editor, Strategic Trader Chris’ note: In E.B.’s Strategic Trader letter, he’s already pinpointed some of the most explosive warrants available today. One is already up an astonishing 227% in four months. Another is up 82% in less than two months. Two more have both soared 90%-plus since E.B. recommended them earlier this year. Simply put, his strategy works. And he just recommended his latest warrant play yesterday. This one could be the biggest winner of them all… and now’s the time to get in. You can learn how to access all of these names, by watching this urgent video presentation. 
Reader Mailbag Today in the mailbag, a reader makes a bold prediction for silver’s future… after our own Nick Giambruno explained why the metal is on the verge of a huge rally: I own thousands of silver dollars and yes, I took possession. I am just waiting for the right moment to sell. The public is already heavily in debt and living paycheck-to-paycheck, so the government admitting to higher inflation is unlikely. It can barely service the debt at these levels. Printing money will inflate an already strapped consumer with higher prices and lead to more violence. Anyone with a degree in economics should know that the real disposable income for the U.S. consumer has been declining since 1971 – about the time Nixon took us off the gold standard. In spite of government reports, the job market is horrible for professionals and small business owners. I am a practical economist. I talk to people to get the real news. I peg silver at over $200 an ounce in the next few years. – Julianna Meanwhile, another reader praises Nick’s recent essay on China’s secret weapon in the trade war: Hi. Thank you for the excellent article on rare earth elements (REEs). – David And finally, one reader has found another safe haven for their wealth… with some help from Disruptive Profits senior analyst Marco Wutzer: I have been buying silver and gold since 2001 and just stopped a few years ago because I think I have enough. I have started buying some cryptos, thanks to my subscription to Marco. I just bought a lifetime investment, due to his knowledge at Casey Research. Have a great day, people. I always read your articles daily. – Nick As always, send any questions, comments, or concerns to feedback@caseyresearch.com.
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