Great Lessons from the Greatest of All Time

I’m one of those weirdos who doesn’t watch much TV.

I have nothing against it. I just prefer other things, like obsessing over my algorithms or playing music.

I’m also one of those weirdos – okay, maybe a semi-weirdo – who isn’t a big sports fan. It’s just never been my thing.

With one big exception.

I love hockey. Specifically, the New York Rangers.

It’s an accidental fandom. We moved a lot when I was growing up, so I never got to develop long-lasting friendships. I spent a lot of time at home, and I’ve always loved music, so I decided to teach myself how to play guitar.

I spent hours in my room learning chords, figuring out the correct hand position on the fretboard, strumming and picking techniques, and anything else I could discover. Looking back, I can see that I was collecting data, analyzing it, throwing out what didn’t work, and keeping what did.

During all those hours researching and practicing guitar, I wanted something in the background, so I turned on the television with no sound. Many nights I tuned into Rangers games. It started as a mindless backdrop, but I soon got hooked. The speed, precision, teamwork, and out-of-this-world skill level – on ice, no less – was poetry in motion.

The Rangers and I started a relationship that endures to this day. They begin their first-round playoff series tomorrow night, and for the next few weeks at least, Rangers games will once again be must-see TV for me.

The Rangers helped me become a pretty good guitar player, and I was playing in bands during and after college, making a few bucks here and there. It was around that time that the greatest hockey player of all time joined the Rangers. Wayne Gretzky finished his career in New York in 1999, and even though he was in his late 30s at the time, it was easy to see that this guy was elite.

In fact, a case can be made that Gretzky was more dominant in his sport than any other athlete has ever been in their sport. When he retired, he had accumulated a staggering 2,857 points. (You get a point for each goal or assist.) He still holds the record to this day… with nearly 50% more points than the next closer player, Jaromir Jagr, at 1,921 points.

He was that much better than everyone else.

Standing six feet tall and weighing 185 pounds, Gretzky wasn’t a big player who bullied his way to success. He had phenomenal agility and coordination, but Gretzky’s greatest advantage was his mind. He was the athletic equivalent of a chess grandmaster. He saw the game and where it would progress like nobody else. He had a superhuman knack for being in the right place at the right time… nearly all the time.

If you want to improve your own life by studying the habits and strategies of world-class performers, Wayne Gretzky should be high on your list of teachers. That includes us as investors.

“You Miss 100% of the Shots You Don’t Take”

You’ve surely heard this most famous quote on strategy. It’s been repeated thousands of times. The late great Steve Jobs loved it and lived by it, and motivational speakers love to drop it into their talks.

As investors, it means we need to put at least some of our money in stocks. Stocks are the world’s biggest generator of wealth, and nothing else is even close.

The ups and downs along the way scare too many investors, so they don’t take as many “shots” as they could, or they don’t finish the shot if they get spooked. It’s like winding up and then changing your mind just as you’re about to whack the puck.

If you don’t invest in stocks, you won’t lose money in stocks. That’s true. But you won’t make any money either. You lose far more in opportunity cost than what you’d save by not investing at all.

If you invest in the right stocks, of course, and that gets us to The Great One’s other famous quote…

“Skate to Where the Puck Will Be, Not Where It’s Been”

Gretzky said the secret to his success was skating to where the puck would be, not to where it had been.

It makes so much sense, right? We invest in stocks because of where we think the price will be, not where it has been.

Of course, nobody can truly know the future, so we must base our thinking on the present and the past.

And yet, one of the most dreaded – and true – phrases in all of investing is the disclaimer: “Past performance does not guarantee future results.”

But what if past performance could predict future results with a high degree of accuracy?

It can.

That’s the basis for my Quantum Edge system.

The first step in designing the system was to find out which factors were most predictive of higher prices.

Through extensive research and backtesting, I was able to pinpoint multiple variables that did indeed reliably predict higher prices in stocks. I then powered up the computers and wrote algorithms to parse the daily data and highlight the stocks that met these roughly 30 fundamental and technical thresholds.

These criteria help us skate to where the “price” will be roughly 70% of the time. You don’t need to be a math whiz to see that kind of success rate can’t help but make money.

When I log on early every morning, my computers have already done more data retrieval and analysis than probably an entire brokerage firm. My system assigns a Quantum Score to roughly 6,000 stocks every single day, a single number that lets me know if each of those stocks is an opportunity, a danger, or just not going anywhere.

With a few additional clicks of the mouse or taps of the keypad, I am left with those handful of stocks with the critical ingredients to generate profits – outstanding fundamentals, strong technicals, and Big Money inflows spotted by our computers based on signals I observed in my years as a middleman matching up buyers and sellers on multimillion-dollar institutional trades.

Fundamentals help us see where the puck is heading. Technicals and Big Money inflows help us see how fast it’s moving.

I will never be able to replicate what Wayne Gretzky did on skates. I doubt anybody else will, either. But we can still have great success investing in stocks.

My rink is the stock market, and my skates and stick are the data and our algorithms that help us see both where the puck has been but where it is going.

And go Rangers!

Talk soon,

Jason Bodner
Editor, Jason Bodner’s Power Trends

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