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Delivering
warrant education to expand
THE
KNOWLEDGE OF INVESTORS
Overview
Before an investor considers
purchasing a warrant, he must like the company.
An investor
who is interested in purchasing warrants must initially analyze
the company. For a warrant to be interesting, the results of
the analysis of the company must indicate that the company
offers potential growth in earnings and is financially sound.
If the investor likes the company and is convinced that the
company offers potential, then the investor should consider the
warrants.
The investor
should then analyze the warrant. If the warrant has 2 or more
years before it expires (our personal suggestion) and offers the
investor potential leverage, then the warrant offers the
investor more potential capital gains than the common stock.
The investor should then purchase the warrant in preference to
purchasing the common stock.
It is
essential for the investor to realize that when he considers a
warrant for purchase, he must analyze (select) the company. If
the investor does not believe that the company offers potential
growth and/or that we are not in a bull market in the natural
resource sector, then there is no reason to be interested in a
company’s warrant.
There is no
reason to believe to that the price of a warrant is going to
rise without an increase in the price of the common stock that
the warrant is an option to buy. The investor purchases the
warrant instead of the company stock of the company because he
anticipates that the price of the warrant will rise more rapidly
than the price of the common stock. The warrant then offers the
investor a greater return than the common stock, that is, the
warrant offers leverage. But such potential leverage requires
that the price of the common stock will rise, and hence the
company itself must have potential for growth.
Footnote:
Much of our
information presented on our website comes from our collective
knowledge of over 30 years of investing. However, we want to
acknowledge some of the professionals whose writings back in the
1960’s and 1970’s are timeless and are as relevant in today’s
markets as they were back then. We have taken the liberty in
some cases to utilize their information for the purpose of
explaining warrants to our readers.
Sidney
Fried, RHM Associates and Herbert B. Mayo, Ph.D.
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Disclosure/Disclaimer Statement
PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.
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