Plenty of “quant” firms have popped up on Wall Street over the years. However, I’m proud to say, I’m one of the few that’s been able to use these strategies to long-term success, earning me the nickname “The King of the Quants” in Forbes.
The key is that a proven system helps you “stick to your guns” and avoid bubble stocks. In this coronavirus sell-off, the bubbles that are being pricked right now include a lot of alternative energy companies, such as First Solar (FSLR), which just hit a new 52-week low.
For one thing, there’s a battery shortage. It’s so acute that not only has Tesla (TSLA) warned about dwindling supplies of key components like lithium and nickel – but other companies have had to actually shut down the production of electric cars like the Jaguar I-Pace and the Audi e-tron!
And for companies like First Solar that also need these kinds of minerals, the shortages can be a big problem when it’s already having trouble meeting sales targets.
Now, don’t get me wrong: While FSLR was certainly a “Sell” in my Portfolio Grader even before its earnings miss on Feb. 20 – it’s not because it’s an alternative energy stock. Enphase (ENPH), for example, is a nice feather in our cap at Breakthrough Stocks. In the chart below, you see how this solar stock is up 80% in the past month while the broad market has sold off.
In fact, much of ENPH’s gain occurred just in the past week, post-earnings report, while market conditions have only gotten worse:
Using my Portfolio Grader, one of the things you’ll see with a stock like ENPH – and won’t see with FSLR – is a history of positive earnings surprises. While FSLR got an “F” there, ENPH got a “B,” and it was just as strong in terms of other important precursors. One of them was its Quantitative Score, which we’ll discuss soon, and another was upward revisions in Wall Street analysts’ estimates for the stock.
That’s the value of a good quant system to separate the wheat from the chaff. Just look back at ENPH’s chart above to see this in action.
So, what exactly is a “quant”? It’s just someone who uses a computer to scan the market looking for anomalies. In the hands of an investor, these translate into hidden profit opportunities that can be exploited for market-beating returns. That’s the subject of my Breakthrough Stocks Summit this Wednesday, Feb. 26 at 7 p.m. ET. Be sure to RSVP for the free online event simply by clicking here.
Basically, when you take a mathematical approach to the market and cut your human biases out of the equation, then the firm with the best formula wins.
And that’s where I have the advantage over the new hotshots out there. Because I’ve been developing my formula for much longer: 40 years’ worth of money, man-hours and computing power.
Today, I simply boot up my Portfolio Grader every Saturday (to get a week’s worth of market data) and analyze nearly 5,000 stocks.
A stock’s Quantitative Grade is among the most important factors it reads. In Wednesday’s Breakthrough Stocks Summit, I’ll take the rare step of discussing exactly what it’s designed to measure. But here’s the goal: to hunt for elephants.
By “elephants,” I mean big institutional investors, like hedge funds and mutual funds. Their managers have the resources to pour hundreds of millions into the stock. Most big, sustained price moves are driven by these elephants accumulating shares of a stock.
And my quantum scoring system is designed to target the stocks that are about to set off a stampede of these elephants!
Once a stock hits a quantum score of 90, it earns an “A” for its Quantitative Score — and I can be sure it’s about to make a big move.
Some of the best in this regard are small-cap stocks like ENPH that we discussed earlier. A couple of years ago, IntriCon Corp (IIN), a company that manufactures wearable medical devices, made a particularly big long-term move.
In September 2017, IIN hit a quantum score of 90 in my system. At the time, the stock was trading just under $9 a share. But look what happened next:
IntriCon’s share price soared all the way up to $65 over the next 11 months. Meaning anyone who followed my recommendation would be sitting on a 615% open gain in less than a year! A $10,000 investment would yield $61,500 in profits from just one trade.
Similarly, after Hansen Natural, now Monster Beverage (MNST), achieved a 90 for its Quantitative Score, shares went from $3.96 to $40 before we sold.
This is the single best precursor I know for such powerful stock gains.
Now, it doesn’t work out perfectly every time. (For one thing, you also want to see strong fundamentals, which I’ve also built my Portfolio Grader to detect.)
But here’s the thing: When you go hunting for elephants consistently, you don’t need to get it right every time.
That’s why, over the last 15 years this system has been able to deliver up 1,092% in the total sum of winning gains for Breakthrough Stocks.
Tomorrow, I’ll describe the market conditions that lead me to conclude we will be able to do even better over the next 12 months…
And on Wednesday at 7 p.m. ET, I will be putting everything together, so you can see exactly what my quantum system measures in a rare public presentation.
Which is why you should mark your calendars… and try to make it to my Breakthrough Stocks Summit. Simply click here to submit your RSVP for Wednesday’s live online event.
Note: If, for some reason, you can’t move your schedule around, don’t worry.
We will be sending out a recording sometime around 9 p.m. ET that night.
Either way, I hope you can check it out. Click here to get on the list now.