Imagine making 49 years’ worth of stock market gains in one year. Well, that’s what Dave Forest of Casey Research says is possible in his latest “Zero to Retirement Summit” presentation.
And according to Dave, it all has to do with something called warrants. Specifically, “Bezos-backed warrants” that he says Amazon is “forcing” up that could make regular investors who get in by “mid-November” up to 49X returns within a year.
Sounds interesting, but is it for real?
Well, I decided to dig further into Dave Forest’s prediction to find out. And in this post, I’ll show you precisely what I discovered and share the stock (and warrant) I think he’s teasing.
Breaking Down the Zero to Retirement Summit
I first found out about Dave Forest’s “Amazon warrants” presentation through an article on the Casey Research website where Dave was talking about Jeff Bezos and the success of Amazon.
In the article, Dave says that, even though Jeff Bezos retired in July, he’s still actively seeking out ways to grow his wealth. And according to Dave, Jeff Bezos’ “secret to the next trillion” is warrants which make up $3.6 billion out of $9.2 billion of Amazon’s investments.
What are warrants?
As Investopedia explains, warrants are similar to options because they give you the right, not the obligation, to buy the underlying asset at or before a set date, time, and quantity.
There are different types of warrants, but for the purpose of this article, the one that’s important to understand is a call warrant.
In short, you can purchase a call warrant through a regular brokerage account, and they give you the option to buy shares of a company at a set price before a set date in the future, typically for less than what the stock is currently trading for.
For example, let’s say “Company ABC” is currently trading at $25 per share, and the company has issued warrants that cost $7 and allow you to buy shares for $20 at any time before 2026.
In that case, you’d make a loss if you exercised your warrants right away because you’d end up paying a total of $27 per share when you factor in the $7 for the warrant and $20 for one share. However, if the stock goes up to $30, you’d be $3 in profit per share.
So, in other words, it’s a way to lock in a lower cost per share.
I’ll get more into detail about the pros and cons of warrants in a moment, but that’s how warrants work in a nutshell. And during a recent interview-style presentation with Chris Hurt, Dave Forest says Jeff Bezos has made billions of dollars using warrants.
Specifically, he says Bezos has “forced” his warrants to go up six times already, netting him as much as $2.5 billion in profits. Here are the specific warrants deals he says Bezos has made:
- Startek ($41 Million)
- Spartan Nash ($110 Million)
- Clean Energy Fuels ($340 Million)
- Air Transport Services Group ($371 Million)
- Cargojet ($492 Million)
- Plug Power ($1.42 Billion)
According to Dave Forest, all of those deals have been private, but with Amazon’s latest deal, “the little-guy investor can jump on Jeff Bezos’ coattails.”
And that’s because the company involved in Bezos’ seventh warrant deal has issued warrants that you can purchase through a regular brokerage account. All you need is the ticker symbol, and I’ll share my guess on what it is shortly.
But for now, I want to explain what Dave means when he says, Jeff Bezos/Amazon is “forcing” these warrants to go up in price. Because that was one of the main points he made in the presentation. And despite the hype, there is a logic behind this.
In short, my understanding is that Bezos finds a company Amazon needs for one reason or another and agrees to spend a substantial amount of money on their products or services in the years ahead – in exchange for warrants in the company.
This is a win-win for Bezos for at least two reasons I can think of.
First, he agrees to purchase stuff Amazon already needs/wants anyway, and most likely at a good price given the size of the deal. And second, he gets warrants that allow him to buy shares at a massive discount in the future. So in that way, it’s a win-win.
And according to Dave Forest, the reason this “forces” the warrants to go up in price has to do with Amazon’s clout.
In short, when word gets out Amazon is working with the company it bought warrants from, and injecting lots of money into it; he points out that this could cause the company’s share price to appreciate. And this, in turn, can make the warrant go up in price.
Of course, there’s no guarantee this will happen, but that’s the gist of what Dave is talking about when he says the warrant price can be forced to go up.
And Dave Forest says he can help you make 49 years’ worth of gains (or more) in a single year from Jeff Bezos’ seventh warrant deal, which he says is a “little electric truck company.”
It’s a bold claim, for sure.
And I don’t think it’s realistic to expect to make decades’ worth of gains in a year or less.
However, Dave Forest says he’s already recommended three warrant plays to his subscribers so far. He claims one made 4,942% gains, another 2,805%, and another 614%.
And apparently, the 4,942% warrant play he recommended was Purple Innovation (PRPL), which was all said and done in less than a year. So that’s where he’s getting the 49X gains in a year from, and he’s hoping his latest warrant recommendation could be as good or better.
What company is he teasing?
What “Little Electric Truck Company” Warrant Is Dave Forest Teasing?
Dave Forest reveals all the details of the company he’s teasing in the presentation in a research report that you can only get by joining Strategic Trader for $1,750.
So to be clear, I don’t know for sure what company he’s referring to. However, based on the clues he provides in the presentation, I believe I may know what company it is.
According to Dave Forest:
- It’s a “little electric truck company.”
- The company is “over 300 times smaller than Tesla.”
- It “brought in $17 million in revenue last quarter.”
- Amazon’s total contract with this company is $1.1 billion and “not one cent of that has hit the companies quarterly results yet.”
To figure out what this mystery company might be, I took to Google. Specifically, I Googled “electric truck company Amazon partner,” and this revealed a few main companies it could be. One was Rivian, another The Lion Electric Company, and a third was PlusAI.
These are all companies Amazon has done deals with. However, based on my research, the best fit seems to be the second one, The Lion Electric Company (LEV).
This company seems to tick all the boxes.
First, Lion Electric designs and builds electric trucks (and school buses) in Canada and the U.S., and they seem to lead this field. And this is what Dave Forest said the company does. He says Bezos has pledged to expand Amazon’s EVs to 100,000 by 2030 and has partnered with a “dominating electric vehicle company” to help Amazon meet its net-zero carbon by 2040 goal.
Second, the comment Dave made about the company being 300 times smaller than Tesla also checks out. It currently has a market cap of around $2.5 billion, and Tesla’s is over $1 trillion. That is much smaller than 300x, but when the presentation was released, Tesla’s market cap was closer to $750 billion, so that part fits.
Third, Lion Electric’s revenue for the June 2021 quarter was approximately $16.69 million.
And fourth, according to Yahoo Finance, Amazon’s warrant deal with Lion Electric requires them to spend “at least $1.1 billion annually.” And according to electrive.com, the agreement involves Amazon procuring “up to 2,500 all-electric Lion 6 and Lion 8 trucks” by 2025.
So it all seems to check out. And it makes sense that Amazon would want to purchase this many electric trucks since it makes a lot of deliveries, and its goal is to be net carbon neutral.
What about the warrant?
The warrant for Lion Electric is traded on Nasdaq as LEV.WS and according to that page, these warrants entitle the holder to purchase one Common Share for $11.50 per share.
At the time of writing, Lion Electric (LEV) is trading at $13.45 per share, and the warrant is trading at $4.45. This means you’d need LEV stock to be trading at $15.95 to break even ($4.45 + $11.50) if you plan on exercising your warrants to buy the shares.
However, based on what Dave Forest says in the presentation, his strategy doesn’t seem to involve purchasing the shares. Instead, it sounds like it centers around trading the warrants themselves. And as I’ll explain in the next section, there are some pros and cons to this.
Recommended: Go here to see my #1 rated stock advisory of 2022
Can You Really Make 49X Gains In One Year?
During the presentation, Dave Forest states several times that warrants are better, cheaper, and faster than trading regular shares. And he repeatedly says that it’s possible to make 49X gains within a year or less.
Whether or not warrants are “better” than shares is up for debate. And there’s no guarantee you’ll make 49X gains within any timeframe, let alone a year or less.
However, it is true that warrants can potentially provide higher returns in less time, thanks to something called leverage.
As I explained earlier, warrants are similar to options in that they give you the right (not the obligation) to purchase the underlying shares at a set price before a specific date.
So at the basic level, warrants can be a way to lock in a lower share price for a stock you’re bullish on. But there’s also a leverage aspect to warrants which is worth taking the time to understand.
How does it work?
I’m not an expert on warrant trading, so I recommend doing your own research on this topic. However, the Investopedia article I linked to earlier sums the leverage aspect up nicely:
While it’s common for share and warrant prices to move in tandem in absolute terms, the percentage gain or loss will vary significantly because of the initial price difference.Source: https://www.investopedia.com/trading/warrants-risky-but-high-return-investment-tool
As you can see, Investopedia points out that the warrant and share price often move together in absolute terms. And since the warrant price is usually much lower than the share price, when the share price moves, this can cause larger percentage gains or losses with the warrant itself.
For example, let’s say the share price for “Company ABC” is $10, and the warrant is $3. Assuming the share price and warrant price move in tandem, if the share price rises to $11, then the warrant price would move to $4. And when you do the math, this works out to a 10% gain for regular shareholders and a roughly 33% gain for the warrant itself.
So, in that way, warrants offer a form of leverage.
On the plus side, smaller moves in the share price can help you make larger gains with the warrant. On the other hand, it can also magnify your losses if the share price tanks.
And there are other factors to consider, too.
For example, while I was doing my research, I came across an article on Stock Gumshoe about Dave Forest’s “Amazon warrant” presentation, which explains that Lion Electric’s public warrants could be redeemed early if the stock trades over a specific price, for a certain period of time.
I don’t know all the details on that, so I recommend doing your own research. But either way, my point is that, as with any investment, it’s important to learn about the risks versus rewards before making any decisions. That way, you know what you’re getting yourself into.
In any case, to find out what company David Forest is teasing in the presentation and get all the details on why he’s so bullish on it, you’d need to read his research report. The one titled “No-Brainer Profits: How to Bag Up To 49X as Amazon FORCES these Warrants Up.”
And the only way to access that report is to join Strategic Trader. So in the next section, I’ll give you the heads up on how this service works to give you a better idea of what to expect.
What Is Strategic Trader?
Strategic Trader is a trading service run by John Pangere and Dave Forest of Casey Research, and according to the website, it’s “dedicated to finding 1,000% winners with the least amount of risk.”
Each month, subscribers receive at least one new recommendation and the research behind each, including the maximum price they suggest buying in at. You also get updates on the positions that are recommended, training, and some bonus research reports.
The training includes a guide on how Dave Forest’s strategy works and access to his 5-video Warrants Master Course which I’ve written about on this site.
And if you join through the presentation, you get the following bonus reports:
- No-Brainer Profits: How to Bag Up To 49X as Amazon FORCES these Warrants Up
- THREE Warrants Plays Set to Triple or More
- Gold Warrants: FAST Doubles With Tiny Gold Companies
How much does it cost?
Strategic Trader normally costs $4,000 per year, but Casey Research is running a special, so if you join through the presentation, it costs $1,750 per year.
Who Is Dave Forest?
Dave Forest is an entrepreneur, venture capitalist, and investment expert who heads up three services at Casey Research – Strategic Investor, Strategic Trader, and International Speculator.
According to his bio on the Casey Research website, Dave is a geologist who worked in the mining and petroleum industry for over 20 years.
When he joined Casey Research in 2004, his primary focus was on helping subscribers profit from opportunities in the natural resources sector through a service called Casey Energy Speculator.
However, now he’s probably best known for his work with Strategic Investor, which focuses on the natural resources space and seems to be the successor to that service.
How well have his recommendations performed?
According to Casey Research:
Dave has published Strategic Trader monthly since 2020. Dave’s recommendations in 2020 produced an annualized return of 250.5%.Source: https://secure.caseyresearch.com/?cid=MKT583832&eid=MKT583927&assetId=AST207868&page=7&referrerEffort=MKT583963&referrerAssetId=AST207871
That’s an impressive result because, from what I understand, it takes into account all of his recommendations. Of course, that doesn’t guarantee his future recommendations will perform that well, but it goes to show he knows what he’s doing.
The “Bezos-backed warrants” Dave Forest talks about in the presentation have to do with a deal Amazon has made with an electric truck company that Dave says could make investors 49 years worth of gains, or 49X returns, in one year or less.
It’s a bold claim, and I certainly wouldn’t expect to make such a high return.
However, Dave Forest says he has recommended a warrant opportunity that made subscribers 4,942% in less than one year. So if that’s true, which I assume it is, then it stands to reason that it’s at least possible his latest recommendation could do that well or better.
Either way, for $1,750, you get the complete details behind the company he talks about in the presentation and 12 months’ worth of his insight and recommendations. So it could be worthwhile, especially if you’re interested in learning more about warrants.
Just keep in mind that this is not a get-rich-quick thing. It might be possible to make 49X gains, but since all investments carry risk, it’s also possible you could lose money. Hopefully, that doesn’t happen, but I’ve learned the hard way through other services that anything is possible.