It’s the “of the year” time… when we look back and crown certain people, places, and things as tops of 2023.
Like Time’s Person of the Year – Taylor Swift, of course.
Or word of the year, which I found especially interesting.
Dictionary.com’s word of the year is hallucinate.
Merriam-Webster chose authentic.
What ties them together is the story of the year – at least for investors…
Artificial intelligence.
Dictionary.com chose hallucinate specifically because of a specific definition related to AI – “to produce false information contrary to the intent of the user and present it as if true and factual.”
Yikes.
Merriam-Webster also referred to AI – and social media – saying the word “authentic” received a lot more attention this year because of “stories and conversations about AI, celebrity culture, identity, and social media.”
But in the corporate and investing worlds, AI was one of the hottest topics around because it’s clearly a transformative technology. That’s why companies fell all over themselves working AI-related announcements into their quarterly reports.
It’s why investors bought up all things AI… and many stocks soared.
And it’s why AI will remain a critical story and investing theme in 2024 and beyond.
A Quantum Leap
Over the past 30 years, software in general has massively improved our ability to collect, analyze, and act on information.
A great software program can help you make smart business decisions, sign digital contracts, move money around, shop anywhere in the world, connect with friends, find travel deals, get directions, share pictures, talk to loved ones, and hail a cheap ride home.
Health care, education, transportation, manufacturing, energy production, food manufacturing, retail, banking, you name it… software innovations mean we can do any of these things with much greater efficiency.
Software has given us quantum leaps in prosperity and efficiency.
Just take Microsoft Excel, which at 38 years old, is ancient in the software realm. One person running an Excel spreadsheet can do the work of a million accountants from days past.
AI raises our capabilities to a new level. For example, AI helped doctors analyze more than 20 million oncology studies in just 10 minutes to save a patient’s life.
No wonder everyone is racing to incorporate AI, from tech giants to tiny startups.
But when everybody is doing it, how do you identify the winners?
This brings us back to technology. Thanks to today’s speed and processing power – which is better than ever as AI emerges – computers can analyze the thousands of publicly traded stocks almost instantly. We can use this data and analysis to spotlight those rare “needle in a haystack” plays that can deliver hefty profits.
Only a Few Stocks Actually Make You Money
According to research done by a renowned professor – Hendrik Bessembinder – out of 26,000 stocks ever listed in the history of the stock market, only 4% of them generated all of the market returns above treasury bills.
In other words, investors have a 96% chance of failing to beat government bonds.
Until recently, we all relied on the human brain to process and analyze the mountain of stock and financial data that now exists in our digital world. The human brain is a wonderful thing – it’s why we still exist – but when it comes to processing and analyzing millions of data points, our brains are laughably feeble compared to supercomputers.
Despite this, the vast majority of traders still enter the financial arena armed with just their brains. And it usually doesn’t end as well as it could.
To find those 4% of stocks that beat bonds, you must screen millions of data points – and fast. My quantitative analysis system sifts more than a million stock data points every night while everyone is asleep.
And you must analyze the right factors the right way. That’s where quantitative analysis and AI come in. My Quantum Edge system performs a deep mathematical analysis of more than 120 fundamental and technical variables – variables that have proven to be the best predictors of higher share prices.
Many of these variables – especially what Big Money is buying and selling – would only be discoverable by the handful of people who manage the largest order flow information in the world. I was privileged to occupy that chair for 14 years earlier in my career, and it led directly to my whole quant stock-picking system and its proven success.
When I log on early in the 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. We are now fishing in a small pond full of exotic fish. From there, I can get back to the human brain (“genuine” intelligence?) to pick the best of the best – from what was already the best of the best.
Even under-the-radar stocks like e.l.f. Beauty (ELF). It’s a well-known company, yes, but it doesn’t generate a lot of investor buzz. And once my technology identified this stock last year, it ripped as much as 102% higher.
ELF has had a strong year in 2023, as well, and it continues to score well in my system, which can use the same analysis to find winning stocks in any industry – including the early stages of this AI revolution.
Beating Wall Street at Its Own Game
Any person in any industry not using software to collect and analyze information today is hopelessly outpaced by those who do.
Huge investment banks now run this technology 24/7/365. These 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… to essentially “rig” the game against you. That means you’re already at a massive disadvantage before you buy your first stock.
It’s legal, but it’s infuriating. It’s one reason I left the Wall Street game – not only to use the system for myself but also make this same firepower available to individual investors. To level the playing field.
That’s the whole goal of my investing services, including TradeSmith Investment Report. We can meet and even beat Wall Street at its own game, using technology-enabled superpowers to make reliable and big stock market gains — over and over again.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends
P.S. I’ll release a new TradeSmith Investment Report recommendation next week as we kick off 2024.
It’s a great company with stellar growth and a successful business model that sits in the epicenter of a new growth revolution – and yes, it’s related to AI.
If you’d like to be notified when I release the new recommendation – and receive access to all of my TradeSmith Investment Report stocks – you can click here now.
It’s a great time to get invested in these winners as we begin 2024.
