[Editor’s Note: This is the third installment of our three-part series on how artificial intelligence can give you an investing “edge.”
In Part I, I explained how I started using AI principles and the power of data and analysis.
In Part II, we peeked under the hood and I gave you a glimpse of how it all comes together.
And here today, I bring it all together and show you my “proof points” – the real results that my system delivers.]
My talk this week about stocks, artificial intelligence (AI) and my Quantum Edge trading system spawned a slew of questions from you folks.
And one really jumped out.
In response to my discussion of a powerful stock signal from a well-known company: Meta Platforms (META), formerly Facebook…
One of you asked, “Jason, I’m intrigued, but can your system help find new stock plays I may NOT have on my radar yet?”
Let me cut right to the chase:
The answer is: Yes, absolutely…that’s the best part.
My daily scan of the markets with Quantum Edge turns up all kinds of great stocks you and I may not have thought of – or even heard of before.
But the Big Money players on Wall Street miss very little. They’re the folks that make stocks move. And when those “mystery stocks” turn up on their opportunity-seeking radar screens, they act. Immediately.
But here’s what’s so great for us. When their army of analysts turns up a great opportunity, it shows up in MY system, too – as a Big Money “buy” signal.
This happens for us with a big “assist” from AI.
So, let me share an example of the stocks my AI system turns up… How I narrow it down from there… And what kind of windfalls we can reap with this strategy.
The Absolute Best Buys Across The Stock Market
First of all, I only consider buying from among those stocks that earn a Quantum Score of 70 or higher in my AI system.
Go back to Jan. 27, the day my system picked up a big “buy” signal in META. That came a few days before Mark Zuckerberg announced he was restructuring the company and making 2023 its “year of efficiency”…
There were 440 out of 6,060 stocks that made the cut that day. The top 7%.
But we also want to know which of those top scorers were getting bought up in an “unusual” (extreme) way.
As it turned out on January 27, only 24 stocks had Quantum Scores of 70 or higher AND Big Money buy signals.
This is important to spot, because these are the stocks that tend to outperform.
In this case, the SPY since Feb. 27 returned 3.8%. Yet our artificial intelligence identified the following stocks which outperformed handsomely by May 9:
- META – 38%
- PHM – 26%
- NVDA – 24%
- LVS – 11%
- GOOS – 11%
- MELI – 9%
- V – 5%
- SBUX – 5%
- EXPI – 4%
Here’s the thing about regular intelligence: We all think and make conscious decisions each and every day. And the Quantum Edge method is no different. That system goes to work each day to identify individual stocks that have market-beating potential. Whether they’re tickers that tend to get a lot of attention or not.
So how does this AI help you make money? By picking the highest-quality stocks that are also being bought in unusual volume by the biggest investors on the planet – that gives a significant edge.
Well, both live data and back-tests confirm that my system wins more than it loses. And those wins are much larger than the losses.
Here are the results of one study which profiled the highest-ranked 20 stocks weekly with those buys signals going back to 1990. Every six months, the 20 most frequently occurring strongest stocks were bought and held for six months. Then the strategy repeated until last month.
TradeSmith used its powerful computers to test this and found that it returned 7x more than investing in just the S&P 500 Index:
And just for further perspective, let’s look at the peak returns for the 20-biggest winners identified by this method:
You’ll notice there are many stocks from the 1990s. What if we make a more reasonable cutoff date — like 2010?
That’s how AI can help you make money: there in black and white.
Some of that money was made in famous stocks like Tesla (TSLA) and Netflix (NFLX). Other times, my system turned up opportunities that you don’t tend to hear about on TV. Because AI will point out ANY result that checks all its boxes – it isn’t swayed by hype or popularity.
Look, like it or loathe it – AI is here to stay.
We can cheer it. Or we can fear it. Or we can use it to our advantage.
In the last three articles, I peeled back the curtain of my own AI-informed stock-picking system, which took the minds of Wall Street’s best and brightest, hundreds of thousands of dollars, and more than a decade to develop. But now it works – every single trading day.
In fact, it’s at work right now. And I’ll be sure to keep you posted here in Power Trends.
Editor, Jason Bodner’s Power Trends