How I Discovered One of the Most Powerful Investment Systems on Earth

It might surprise some people, but I owe all my investing success to one college assignment. At Cal State Hayward, one of my professors tasked me with creating a model portfolio that would mimic the performance of the benchmark S&P 500 index.

It was a dream assignment for a numbers guy like me… but I failed at it spectacularly.

The problem? My model kept beating the S&P 500.

This was back in the late 1970s, when everyone believed it was virtually impossible to beat the market without taking on excessive risk. Conventional wisdom was that you might get lucky for a while, but no one could consistently beat the market.

Thankfully, my professors gave me unprecedented access to Wells Fargo’s expensive and powerful mainframe computers to continue to build my stock selection models. (Remember, this was more than 30 years ago, before laptops and PCs.)

Through hundreds of hours of research, I discovered how an elite type of stock consistently outperformed the broad market, year in and year out. Through extensive analysis, I isolated the eight key qualities that these super-performing stocks shared… and I developed a system for riding them. The research I did back then serves as the foundation of what is now an advanced, high-tech method of computerized market analysis.

If you’ve been investing in stocks for a while, many of the qualities I’ve identified probably won’t surprise you.

That’s because four of the eight qualities are related to earnings.

The Real Secret to Making Money in Stocks

On any given business day, millions of people pay attention to the blinking lights and flashing numbers they believe make up “the stock market.”

Unfortunately, just a tiny percentage of those people will ever understand the real secret to making money in stocks.

These folks forget that a stock isn’t just a flashing light on a screen or a trading hot potato. When you buy a stock, you buy a partial ownership stake in a real business.

You own a slice of that company’s equipment, inventory, patents, real estate, and brands. You become financially exposed to both the company’s upside and downside.

The major drivers of a stock’s prices are earnings (or the anticipation of them). The more a company grows its earnings, the more its shares will be worth.

That said, stock price trends can diverge from earnings trends for a while – but over the long term, if a company grows and grows the amount of cash it takes in, its share price is sure to head higher. That’s how the market works. It’s the “iron law” of the stock market.

And that’s why if you’re looking for stocks with massive upside potential, you should focus on the companies with massive revenue and earnings growth.

This is why my computer programs are constantly scanning the market for companies with outstanding quarterly earnings growth… outstanding annual earnings growth… and a tendency to surprise Wall Street analysts with better-than-expected earnings growth.

In addition to qualities related to superior earnings growth, my system screens for companies with increasing operating margins, increasing sales growth, high returns on equity, and strong cash flow.

Corporate America is not Lake Wobegon, where all the kids are above average. The brutal truth is that some companies are much, much better than others. They have better management, better products, bigger profit margins, stronger sales, stronger balance sheets, etc.

My system analyses over 4,000 stocks, grades them according to the individual qualities listed above, and also combines the individual metrics to create an overall composite grade for any stock.

These grades are just like the ones in school:

When I see a business with the highest growth and business quality ratings, the stock gets an “A.”

A stock with miserable ratings gets an “F.”

The result of all this work? My readers buy the world’s fastest-growing companies… and hold them through their most successful years of expansion.

Of course, all this information is constantly changing. That’s why my ratings are updated weekly. When an “A” stock starts to falter in these qualities, the rating changes too. That’s the signal that it’s time to claim some profits.

In tomorrow’s essay, I’ll dig deeper into how my system works… and we’ll cover the key attributes that the world’s biggest stock winners have. After tomorrow, you’ll never look at stocks the same way again.

P.S. Ultimately, spotting the right investment is simple. You buy when the company achieves a “Quantum A”…and you sell when it disappears.

You don’t fall in love. You certainly don’t fall for hype. You may return to that stock someday – but with my system, you know exactly when it’s time to take profits off the table.

That’s why I say there’s no luck and very little skill behind my own success. Just hard work…and the result: a proprietary system for picking the best investments of the day. It’s made it easy to nab market-beating returns – for double your money (or better).

I’m eager to show you what my system is picking up now. Click here to find out more.

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