Investments That Inform SPAC Warrant Patterns

Within the first few paragraphs of Reminiscences of a Stock Operator, Larry Livingston (or Jesse Livermore in real life) lays out one of his most important stock rules.

He would use it throughout his trading career to amass millions.

I noticed that in advances as well as declines, stock prices were apt to show certain habits, so to speak. There was no end of parallel cases and these made precedents to guide me.

-Larry Livingston (or Jesse Livermore)

Right off the bat, when he was 14, and working as a quote boy (so he had to write down changing stock prices for the actual traders to see), Livermore started seeing patterns.

But, it wasn’t until he got older, that he started looking at what was behind the patterns.

What caused stocks to move higher in a World War?

Why did coffee not move higher during the war, when EVERY other commodity that was traded did?

Why did a market he knew should be going lower, move higher (at least near term)? Sounds a little like where we are today.

Livermore first saw there WERE patterns, and then went in search of the why to round out his trading.

A friend of mine sent me a link late last week, to a great interview.

If you’ve been on my email list for a while, (or if you’re new to my ramblings, you’ll quickly figure out) you know SPAC warrants have been a major new contributor to warrant trading, and have offered up a great deal of opportunity in the warrant market.

There are definite PATTERNS that occur in SPAC (special purpose acquisition company) trading, and we’ve been able to profit from them time after time.

While I’ve written many blog posts about why these patterns occur, it never hurts to have someone on the other side of the curtain weigh in as well.

So, I’m sharing this interview with you guys so you can see how, and why, certain SPAC investors invest the way they do in SPACs. And how this might influence the trading pattern that SPACs follow.

If I told you I’m going to be selling a million shares of a relatively thinly traded stock tomorrow, what would you do? What if I were the opposing coach of the baseball, (football, ping pong team…could we get some sports back please) you were about to play and I shared my playbook with you?

Puts you in a pretty good position to win, right?

Well, this guy does exactly that. And, by doing so sheds some light on patterns you can expect in SPACs and SPAC warrants.

The entire video is over 2 hours, but only the first hour is about SPACs and warrants…and only the first 30-35 minutes is the really good stuff.

If you’re going to be trading warrants, this is a must listen too. No affiliation with me, this isn’t a sales pitch, and they’re not selling anything on the video. Had never heard of the guys before my friend forwarded the video.

Here’s the video.