Special Purpose Acquisition Companies, or SPACs as they’re most often referred to, have been all the rage in the investing community.
In fact, 2020 was a record year for them, as more than 200 SPAC sponsors issued initial public offerings — four times as many as 2019. So I get asked all the time what I look for in a SPAC investment.
There are more details in my video below, but a SPAC is basically a pool of money in search of an acquisition deal.
SPACs allow ordinary investors to get access to small, high-growth companies. But like everything else in the stock market, there are big risks… and the potential for big rewards!
There are two important factors in what I look for in a SPAC investment that can potentially put the odds in our favor…
There are dozens upon dozens of SPACs out there that you can invest in. Some go on to become huge winners… and some are total flops — oftentimes there’s a huge amount of volatility either way.
So how do you know what to look for in a SPAC investment?
Now, this may sound strange, but more often than not, SPAC sponsors don’t even say what company they’re going to acquire… or even where they’re shopping. Like everything else, this can work out to be a good or bad thing. A lot of it depends on the SPAC sponsor, be it some big investment banker, a celebrity, a political type, a business person of high stature — or low stature.
In fact, the No. 1 thing I look for in a SPAC investment is the credibility of the dealmaker sponsoring it.
Check out my short video and let’s go into further detail on what I look for in a SPAC investment. Have you bought into a SPAC before? Maybe you’ve considered it but haven’t taken the plunge yet? Let us know in the comments.
P.S. Create a Kingdom with Your Potential 2021 Profits
Just in case you haven’t noticed yet, the markets can be heavily influenced by the richest people in the world.
They can pour millions of dollars into seemingly random stocks, sending share prices to the moon.
Take Peloton for example… A lot of people wanted nothing to do with this stock when it dropped to $18…
But then investor extraordinaire George Soros came swooping in and bought 2.7 million shares — and it shot to almost $140 per share!
These billionaire Kingmakers can completely change the outlook of a stock…
And those who manage to get in before the billionaires drive the price up could cash in BIG.
Luckily, trading genius Adam Sarhan seems to have figured out how to make that happen.