How a numbers-based system can save you time, stress, and improve your investment results
The alarm goes off …
You kiss your significant other, pet the dog, then shuffle to the coffee machine as your brain slowly comes to life.
A few minutes later, you’re at the computer, scanning your portfolio, and that’s when you notice something different …
One of your stocks has jumped 15% … overnight.
That $25K you put in? It’s now tacked on nearly another $4K.
So, what now? Take the profits and enjoy a much-deserved vacation? Pay down some debt? Do nothing and let the gains ride?
That’s the question Louis Navellier’s Accelerated Profits subscribers are currently wrestling with, because this just happened to them.
Actually, that’s not true … this is what happened to anyone who attended Louis’ Project Mastermind event a few weeks ago, and acted on Louis’ free stock pick recommendation.
***25% revenue growth leads to a 34.5% earnings surprise
Louis’ free stock pick was Universal Display Company (OLED). The company uses emerging technologies to make thin, efficient, high-quality displays for things like your smart phone.
On Wednesday, OLED posted a 13.5% revenue surprise and an incredible 34.5% earnings surprise.
So, what was the result?
By the way, the other stock recommendation which Louis gave to new Accelerated Profits subscribers as a part of that same Project Mastermind event is already up 5%.
***How machines are leading to better investment performance
If you’re not seeing results like this in your own portfolio, there’s likely one fundamental reason …
People aren’t great investors.
This unfortunate reality is the takeaway of research done by Dalbar Inc., a company that studies investor behavior and their market returns.
Year-in-year-out, the results are the same — the average investor performs significantly worse than the market.
There are countless behavioral blunders we make that trip us up and result in poor investment returns. But that’s where Louis’ approach is different — and why its results are miles better than those of the average investor.
You see, Louis is smart enough to know that his own “hunches” aren’t a great investment strategy. Analyzing things from a gut feel point-of-view allows us to color situations with our own hopes, biases, dreams, and opinions.
So, what’s better?
How about powerful, impartial machines that crunch mass quantities of data to identify winning investments, as well as numbers-based entry and exits times?
It was pure numbers-based research that led Louis’ firm to sell tech highflyers Cisco and Sun Microsystems in 2000. Those who stubbornly held on to the tech story and stayed long after the party had ended lost big.
It was pure numbers-based research that had him buying homebuilders in 2002 just as they began a huge multi-year run higher.
And it was numbers that led to him recommending OLED a few weeks ago, which just popped 15% yesterday.
***How does a numbers-based approach really work?
Thanks to today’s cheap super computers, an analytical project that took one month to complete a few decades ago can be performed today in less than one minute … and at less than 1% of the cost.
The massive increase in computing power we’ve seen over the past few decades is allowing us to gather, record, and monitor trillions of data points, signs, and clues … and then determine exactly what they mean.
This is what Louis and his team have been working on for years, incrementally improving models, algorithms, and inputs. It’s something that came to be known as “Project Mastermind.”
With the help of incredibly-powerful computers, they conducted their Mastermind study with a simple goal …
Determine the attributes of stocks that are most likely to go up in the near future. Not based on hunches or gut-feel, but on cold, impartial numbers.
So, what kind of numbers? After all, it’s easy for investors like you and me to be swallowed up in mass quantities of data. As you know, every public company has hundreds of data points related to its business and its stock.
There are annual earnings, quarterly earnings, net profits, gross profits, sales, P/E, return on equity, tangible assets, stock price momentum, trading volume, and relative strength just to name a few.
So, which of those data points have real-world, profit-producing predictive power? Is a low P/E the best predictor of future stock returns?
Is blazing sales growth the best predictor of future stock returns?
Is positive stock price momentum the best predictor of future stock returns?
Is it a combination of factors?
Those were the type of questions that came up as Project Mastermind grew over the years. That’s what Louis and his team sought to answer.
They brought no preconceived notions to the project. No biases … no wishful thinking … no egos to defend … no past stances to justify.
They simply just let the numbers do the talking.
After extensive analysis, the Mastermind group isolated eight key qualities that are common to super-performing stocks. With this as the foundation, Louis then developed a number-based system for riding them.
Now, it’s one thing to take a system and backtest it — meaning ask “what if we’d used this in the past?” It’s an entirely different thing to take a new system and see how it works in real-time.
Yesterday was an illustration of what happens in real time with Project Mastermind. A 15% pop, based on a 35% earnings surprise.
***What’s your investment approach?
If you’re not getting the investment results you want, or you’re simply not sure of the best way to approach the markets, perhaps it’s time you let numbers and computers help. After all, technology has made our lives infinitely better in countless ways — why shouldn’t we let it help us with investing too?
Plus, the great thing about Louis’ system is it doesn’t just identify great stocks — it also points toward when to buy in, and when to get out.
For instance, just this past summer, Louis’ system picked up some red flags on investor-favorite, Netflix. So, Louis issued a “sell” recommendation.
Was this a hard call to make?
I don’t know, but my guess is “probably.” After all, Netflix is a tech market darling. On top of that, in the previous quarter, Netflix’s U.S. subscriptions had posted a gain of 1.7 million. Overall, subscriptions were up 26% year-over-year. And earnings per share were up, too, by 18.8%.
But Louis let the numbers make the decision. So, what happened?
The “sell” recommendation helped Louis’ subscribers lock in gains, and avoid a steep selloff that Netflix has suffered over the summer.
As we wrap up, if you’d like to see what Louis’ numbers-based, computer-driven system can do for your portfolio, click here to learn more. It’s a market approach that combines technology and data to identify the stocks poised to push higher – with the gains coming in months, not years. Or in some cases like OLED, just days.
Have a good evening,