Back in the late ‘70s, I really felt like a “boy genius.” I’d sailed through undergraduate school in two and a half years and enrolled directly into a finance MBA at Cal State Hayward right after graduating.
But when my final project rolled around, I had to sit there with my MBA advisor, looking through piles of market data I’d gathered, and tell him: “I think I just disproved my hypothesis.”
The discovery turned out to be a good thing – today, it’s the cornerstone of the quantitative stock analysis I’ll reveal in Wednesday’s free Breakthrough Stock Summit.
But at the time, it looked like two years of hard work was about to be flushed down the drain. I was the first person in my family to attend college, the son of a stone mason, as I mentioned in yesterday’s Market360. And when my professor had asked me to design an experiment proving that the Efficient Market Hypothesis is true…my results only showed the opposite.
If you’re not familiar with the Efficient Market Hypothesis, here’s the bottom line: Academics had concluded that it was impossible to beat the market long-term because of the way information flows in the market. Therefore, the best strategy is to just buy the major indices and hold them until you’re ready to retire.
Well, contrary to the opinions of my professors, my data indicated that the Efficient Market Hypothesis was false.
This was before personal computers (PCs), so instead I used my access to a few mainframe computers at Wells Fargo and Stanford to analyze years of data on thousands of stocks. And what I ultimately found was little hidden formulas that can be used to find the stocks that are most likely to go up… with the least amount of risk.
Fast forward to today, and we can use my Portfolio Grader tool to rate stocks on a variety of factors; one of them, called the Quantitative Score, reflects the discovery I made in those MBA days.
I found that the single most important factor in a stock’s long-term success is strong buying pressure from the “smart money” on Wall Street. Think of this as “following the money.” The more money that floods into a stock, the more momentum a stock has to rise.
For that reason, I designed my Quantitative Score to reflect a stock’s buying pressure, market sentiment and a few other important variables. I don’t buy based on that alone – I also want to see a company with good fundamentals. But if a stock doesn’t earn a high Quantitative Score, it’s not going to be a “buy” in my stock-picking system.
And next Wednesday, Feb. 26 at 7 p.m. ET, I’ll take the rare step of describing the factors that my Quantitative Score measures. This is not something I usually do outside of my paid newsletters…but I’m not hearing much elsewhere about the strategy we use at Breakthrough Stocks. And right now, it’s turning up much better opportunities than you’ll hear on TV. So, Wednesday’s Breakthrough Stocks Summit will be open to the public (free of charge) – click here to RSVP now.
To show you the kinds of gains we’re targeting now, here’s what my system has delivered in the past for Breakthrough Stocks:
• A 612% gain on Santarus
• A 220% gain on Bitauto Holdings
• A 347% gain on America Movil
• A 457% gain on Holly Corp
• A 477% gain in EMC Corp
• A 758% gain on Vipshop Holdings
• And a 1,125% gain on Hansen Natural.
And, because of how I designed my Quantitative Score, we did it all with less risk than an S&P 500 index fund!
If you know anything about those companies, that might surprise you because they were all small-cap stocks. Their index benchmark, the Russell 2000, is certainly known for wider swings than the S&P 500 or the Dow.
But these smaller up-and-comers are also where you can find the best growth prospects. And when you’ve got a small cap with great momentum on Wall Street – plus strong fundamentals – then that’s a recipe for superior gains like the ones I just mentioned. In fact, at Breakthrough Stocks, this system has delivered 1,092% in the total sum of winning gains over the past 15 years.
I don’t mean to brag, but I’m just trying to underscore how misguided it is to trust the Efficient Market Hypothesis – and how much better your performance can be with a stock-picking system like mine. It’s a crucial concept for investors right now, especially because we’re in the thick of earnings season.
Earnings might be winding down for some of the big large-cap stocks you hear about all the time on TV. But earnings season is just starting to heat up for my Breakthrough Stocks. And – because I only target stocks with superior sales, earnings and money flow – any one of these earnings reports can be a major catalyst to propel shares higher. Click here to RSVP for Wednesday’s Breakthrough Stocks Summit and be there to take part.
Note: In my February Issue of Breakthrough Stocks, I talk about the small-caps stocks I like best now – the ones with way better earnings prospects versus the S&P 500. I’ve narrowed it down to my Top 5 Breakthrough Stocks for February.