They say necessity is the mother of invention.
I can attest to that.
I started my investing career more than two decades ago as a trader, and I stunk at it.
In my first three weeks, I made every mistake in the book.
Greedily chasing a stock that was ripping higher? I did that.
Buying a falling stock because I had a “gut feeling” it would turn around? Did that, too.
Following the herd into a crowded trade? Add that to the list as well.
I was so bad that my boss openly took the opposite position for every trade I made. He didn’t even bother looking at the stock or doing any research. All he needed to know was that I made a trade, so he bet the other way.
While I was losing thousands of dollars, my boss made a ton of money taking the other side.
It wasn’t good for the old confidence.
All of my intuitions, gut instincts, and emotional swings took me in the wrong direction… and cost me money.
I almost quit. I couldn’t bear the thought of trading ever again, so I went back to being a broker. I took orders by phone, and I placed trades for other people.
Then one day, a big client requested that I track “unusual activity” in all 2,800 European stocks that traded across all of the exchanges.
Track nearly 3,000 stocks?! Are you kidding?
It was impossible to look at that many stocks all day long, every day, let alone try to spot unusual activity.
I knew I needed help, or I was going to fail at that assignment, too. So, I turned to computers and designed a quantitative system that did a lot of the work a heck of a lot faster than I ever could.
Tech to the Rescue
To be honest, I didn’t even know how to code back then, but I was more than happy to figure it out if it would help.
Did it ever.
With a machine handling the bulk of data retrieval and analysis, I could research more stocks and variables than ever before.
I realized that the human brain, as amazing as it is in so many ways, is no match for massive data analytical firepower.
And… I didn’t have to get my emotions involved with trading anymore. I didn’t have to rely on “gut instinct” that steered me wrong more often than not.
The early results were outstanding, especially after my early failures. I didn’t know it at the time, but it was the beginning of a life-changing journey and a dramatic shift in my success as an investor.
By that point, I was hooked. I sharpened the tool more and more. I poured more money into it. I beefed up the algorithms.
All the while, I was in effect building an artificial intelligence stock-picking system before AI was cool.
You see, computers aren’t born with intelligence. They need to be programmed to get “smart.”
If you’re going to provide instructions for a computer to do a job, wouldn’t you want to provide the best possible instructions?
Of course. And I uploaded some of the smartest investing minds into my algorithms.
Over the course of my career, I’ve had the pleasure of working with and learning about some of the most brilliant investors. I’m talking about folks who wrote dissertations on Sallie Mae before it went bankrupt. I studied turtle trader Richard Dennis, who helped 23 ordinary people become millionaires. I was huge into William O’Neil, the investor who founded Investor’s Business Daily.
Then there were the people I worked with every day and the institutional clients I spoke to on the phone. I picked their brains and bought them more than a few pints of ale, studying their philosophies and successes.
I broke down all of their models and rules, did my own research and numbers crunching to find out which ones worked best, and I took the best of the best to build the rules that govern my Quantum Edge system.
Fishing In a Small Pond
Ongoing technological advancements mean we now have far superior technology and algorithms than a couple of decades ago. ChatGPT, which started the AI craze last October, just today announced a new line of products with new capabilities.
For me as an investor, this translated into a better and more reliable way to find the absolute best-of-the-best stocks to own. When I log on early each 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.
I make a few additional clicks of the mouse or taps of the keypad. Then I’m left with those handful of stocks with the critical ingredients to generate profits, based on all my years of research, testing, and signals I observed firsthand as a middleman matching up buyers and sellers on multimillion-dollar institutional trades:
- Outstanding fundamentals
- Strong technicals
- Big Money inflows spotted by our computers
In short, I don’t fish in a massive ocean and hope to get a bite. I narrow it down to a small pond full of exotic fish where I’m likely to snag the best of the best.
By utilizing technology, you can spot key activity across a universe of stocks, all the while avoiding the emotional turmoil of investing decisions and the sometimes dangerous media noise, too.
I remember very well in the summer of 2018 how the market was throwing a temper tantrum as we were in the middle of a trade war. The news had investors in a panic saying we were looking at a mirror of the 1987 Black Monday crash. Investors had pulled $30 billion out of the markets in the prior month alone. But when I got the alert for The Trade Desk (TTD) in July, I was better able to look past all that noise and focus on the data.
And it was worth it…
Over the next few years, The Trade Desk exploded for as much as 1,100%.
Anyone not using software to collect and analyze information in our world today is hopelessly outpaced by those who do. You probably already use technology in most areas of year life, and so why not leverage its power in investing as well?
Huge investment banks now run technology 24/7/365. Firms invested billions of dollars creating systems that give them critical market information first. And they have the analytical firepower to act on that information in a fraction of a second – before most people can even turn a computer on. Wall Street uses this edge to win out against individual investors, but we can level the playing field. We can give ourselves a similar edge with data analytics, supercomputers, and proven analysis.
That’s the whole goal of my investing services like Quantum Edge Pro. We can meet and even beat Wall Street at its own game, using technology-enabled superpowers to make big, reliable, and safe stock market gains — over and over again.
Jason Bodner’s Power Trends