be_ixf;ym_202211 d_28; ct_50

Select Page

We Found a Glitch in the Way Wall Street Hands Out These Shares

We Found a Glitch in the Way Wall Street Hands Out These Shares

Retail investors couldn’t buy them fast enough.

The calendar was filled with special-purpose acquisition companies (SPACs) for the past two years.

Also known as blank-check firms, SPACs go public without having a business.

Wall Street uses them to raise money, so they can buy a business to be chosen later.

It’s a shortcut to a stock market listing.

These shares were offered at $10 per share, and retail investors saw them as a way to gain access to promising startups.

But most SPACs didn’t turn out the way they’d hoped…

The Great Fall

Many of the SPACs Wall Street peddled were early-stage companies.

These companies were speculative and had a snowball’s chance in hell of making money.

The De-SPAC Index measures the performance of all SPACs since they went public.

And it’s off 62% over the past year…

e De-SPAC Index measures the performance of all SPACs since they went public.

That’s 3X greater than the loss of the S&P 500 in the same time.

And many SPACs are down even more.

DraftKings Inc. (Nasdaq: DKNG) started life as a SPAC back in July 2019, at $10 per share.

The stock ran up as high as $72 in March 2021.

Today, it currently trades for around $12 per share — down 80% from its all-time high.

The ways Wall Street figures how to separate investors from their money never ceases to amaze me.

SPACs turned out to be a bust.

That’s why if you think Wall Street is there to help you make money…

I have a bridge in Brooklyn I’d like to sell you.

Instead, the way to make money is to find areas where you have the edge over Wall Street…

Early Bird

And one of the biggest edges you can have is a glitch in the way that Wall Street does business.

When these glitches show up, we have a huge advantage.

I call these particular glitches “pre-market” shares.

They’re not like SPACs.

Anyone can reserve these shares before they go public.

Yet Wall Street often ignores them.

But the early bird gets the worm.

Investors who get in early usually see huge market-beating gains.

In fact, over a decade, pre-market stocks have outperformed the S&P 500 on average by almost triple!

pre-market stocks have outperformed the S&P 500 on average by almost triple!

And that’s through down periods like the 2008 financial crisis.

Plus, it’s just the average return.

The best opportunities can outperform the market by six, eight or ten times.

That’s why some of the most legendary investors have taken advantage of them to build their fortunes…

Astoundingly Lucrative

Peter Lynch used them to lead Fidelity’s Magellan Fund.

It averaged an annualized return of over 29% over 13 years.

But Lynch isn’t the only one calling them “astoundingly lucrative” investments.

Joel Greenblatt — co-founder of Gotham Asset Management — agrees that “you can make a pile of money” from pre-market shares.

And even Warren Buffett has made some of the best gains of his 70-year career by reserving some of these pre-market stocks.

All these great investors are saying that this area of the market is profitable.

So, why reinvent the wheel? It makes sense to follow what they’re doing.

And the good news is that these pre-market opportunities are available for investors to profit from — no matter what market conditions are like.

In fact, downturns like the ones we’re seeing now means we can buy companies offering these pre-market shares at a huge discount.

And one of these pre-market opportunities is about to happen again soon.

I’ve put together a special video to share all of my insights on it.

To find out how to get all the details about this company, click here to watch it now.

Regards,

Charles Mizrahi

Charles Mizrahi

Founder, Alpha Investor

Share This