Lessons From Three of My Best Stock Picks

I’ve made some bold predictions before, and I made more Tuesday night during the Early Warning Summit 2020.

stock picks

Thousands of people tuned in as Matt McCall and I made some major predictions about the market direction for 2020 and debuted our Power Portfolio 2020.

Combining my quantitative approach, and Matt’s “big trend” approach, we developed a unique portfolio just for 2020 designed to make the most of this extended bull market. (You still have time to catch the replay here.)

I made some bold claims last night, but that’s nothing new. Even before last night I’ve been predicting a future run to Dow 40,000.

I know this prediction has raised some eyebrows, but I don’t say that lightly. I believe in running the numbers — and in being guided by them. That’s key to your long-term success, as it removes your personal biases from the equation.

And I’m proud of the results my quantitative approach delivers. This system not only informed my predictions at the Early Warning Summit — it was also responsible for the greatest wins of my career.

The system behind my Portfolio Grader tool made me “one of the very first to recognize Google’s long-term potential, within months of its 2004 IPO,” as cited in MarketWatch.

And in recent years, it helped me pick stocks that went on to be the top performers among S&P 500 stocks. All of them reflect the same pattern you can use today to help predict future gains.

In 2016, the best S&P stock was NVIDIA Corporation (NASDAQ:NVDA), a leading maker of graphic processing units (GPUs) for computer gaming and the like. In fact, it invested the GPU back in 1999!

I recommended NVDA in May 2016, and in the previous quarter, the company had grown earnings by 38%. At $0.46 per share, versus expectations for just $0.31, NVDA had “beat the Street” by a whopping 48%.

The company continued to grow earnings throughout 2016, and ended up +207% for the year, earning it the top spot as the best performer in the S&P 500 that year! Meanwhile, I continued to recommend that NVDA position for quite that time. When we cashed it out this January, we’d made even more: +274%.

Chart:NVIDIA Corporation (NVDA)

I also recommended the best-performing stock in 2014 and 2017, too!

In April 2013, I picked Southwest Airlines (NYSE:LUV). Southwest is a company that’s best known for cheap flights, thanks to policies like no baggage fees and no assigned seats, which reduces boarding times. (As we all know, time is money, and that’s especially true if you’re an airline.)

In 2014, LUV closed out the year up +125%. By that time I recommended selling it in February 2016, we’d made far more on our position: +194%.

And in 2017, Align Technology (NASDAQ:ALGN) was the number-one stock for the year. ALGN might sound like an obscure stock. But when I mention its brand name Invisalign, that might sound more familiar. Yes, this is the company that’s helping move orthodontics from the old, cumbersome model of metal braces.

I recommended ALGN in August 2016, and 2017 was even better to ALGN: the stock gained +132% that year. By the time we cashed out our ALGN position in November 2018, we’d made an even better gain of +157%.

How? Well, these profits on all three stocks simply resulted from my following the cues of my Portfolio Grader.

Below is its current Report Card for ALGN:

Align Technology (ALGN) Report Card

There you see the eight business fundamentals I assess for any stock; as you can see, profitability is key.

Best Stock of 2020: Still to Be Determined

If there’s one thing I’ve learned in my investing career, it’s that you can’t go wrong if you stick with companies that “deliver the goods” with regard to earnings.

Now, as I look ahead to 2020, I’ve done the hard research, run the numbers on key fundamental and quantitative factors, worked with my InvestorPlace colleague Matt McCall, and formed a view on what’s coming next.

Are investors becoming comfortable with more risk, and potentially greater returns, that can be found in small-cap stocks?

And what could happen if Republicans, or Democrats, win the 2020 elections?

In Tuesday’s Early Warning Summit, I laid out why I expect President Trump to win, and the related factors that will help the market maintain its strength. Click here to watch the replay and see why Matt and I both think stocks are a screaming buy now.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

Article printed from InvestorPlace Media, https://investorplace.com/2019/12/my-best-stock-picks-lessons/.

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