I sometimes got mad at my mom when I was a kid.
I’m sure we all did, but she sacrificed everything unconditionally to give my sister and me every possible opportunity.
That was also the root of the problem. After all she did, she wouldn’t let it go if I came up short. If I got a C on a test she knew I could ace, I got skewered.
Then I got mad. I wanted her to be okay with it. To say: “There’s nothing wrong with a C, Jason. Not all kids are A material.”
I wanted sympathy. But if I’m honest, I also wanted an excuse for mediocrity.
I never got it. I was pushed to be the best. And while uncomfortable at times, I’m glad. Lessons like that are essential to becoming the best you can be and unlocking your true potential.
Contentment with status quo results in status quo.
I’ve carried that lesson with me into adulthood, my career, and fatherhood. I also encourage my kids to be the best they can be, though perhaps a little more gently than I was pushed.
Kobe Bryant, one of the greatest basketball players of all time, embodied this pursuit of excellence with what he called his “Mamba Mentality.” He wanted to be better each day then he was the day before. “it’s the process of doing better every day – and doing that for a period of years – that then creates a masterpiece.”
I didn’t think about it day to day, but thanks to those early pushes, I was in full Mamba Mentality while spending an estimated 30,000 hours, at least $250,000, and significant brainpower developing my Quantum Edge stock rating system.
I wanted to improve it each day, and I wanted to reach the ultimate goal of having it point me to the absolute best stocks to buy.
Fortunately, I succeeded, and I’m telling you this today because we are now just six months from the election. A lot of folks aren’t sure what to do with their investments, so I want to help you out today by sharing data that shows we actually have a great opportunity to make money.
But it’s not simply just buying stocks or index funds.
To make the most, you need to buy the best.
Why It Matters to Be the Best
“Mamba mentality is all about focusing on the process and trusting in the hard work when it matters most. Without studying, preparation and practice, you’re leaving the outcome to fate. I don’t do fate.”
My system ranks 6,000 stocks every day, pulling the most predictive data and analyzing it in the most predictive way by running the algorithms I designed after all of my “studying, preparation, and practice.”
Like Kobe, I don’t do fate. I do data.
After we find the strongest stocks in the market by rating their fundamentals and technicals, we then turn on the x-ray to spot unusual money inflows. We want to buy stocks that the biggest investors on the planet are also buying.
Combining those three factors, my system generates the Quantum Score that we talk about a lot here in Power Trends. It’s a highly effective snapshot of whether the stock is a good buy.
Here’s what it looks like for Apple (AAPL), the most searched ticker on TradeSmith Finance at the moment. Those aren’t bad scores, but they aren’t the best either. As regular readers know, I like a Quantum Score of roughly 70 to 85 when buying a stock.
Source: TradeSmith Finance
In addition to those 6,000 Quantum Scores, my system also generates a weekly list of the 20 highest ranked stocks that are also getting bought in unusually big ways. That tells us Big Money is at work.
This is the elite Top 20 list. I can’t share it with you here, as institutions and hedge funds pay big money to access the list. And the stocks I recommend in my newsletters are frequently on that Top 20 list. In fact, two of my TradeSmith Investment Report stocks appear on this week’s list, and they are already up big for us – 62% and 42% after Wednesday’s close.
These are the best of the best. The stocks that tend to beat all the others.
Election Year Outperformance
That’s important right now because those elite stocks also outperform in election years, which are historically more opportunistic than you might think.
I dug into the data going back to 1992 – covering the last seven presidential election years – to see how stocks on the Top 20 list in May performed versus the S&P 500.
Interestingly, both the Top 20 stocks and the broad market index are up on average one month later, three months later, six and nine months later, and both one and two years later.
But the Top 20 outperform the S&P 500 at every interval. The one- and two-year returns on the S&P 500 were right on the index’s historical average of around 10% per year, while the Top 20 stocks outperformed by more than 30% over both periods.
Source: MAPsignals, FactSet
And if you measure from May of election years through peak returns in the years following, that outperformance leaps to nearly a double. The peak return in the Top 20 from May in election years averaged nearly twice the reinvested return of the S&P 500.
I’ve studied stocks in election years extensively, and I have more to share with you in the coming weeks as we head toward the big vote. The noise around this election is off the charts, and if you get mired in the daily headlines, you might just sit it out with your investments.
We all have to decide what’s best, but the data shows there is money to be made out there. It’s true right now, as money flowing into stocks have increased in recent weeks. And it’s true in election years.
It’s true if you invest in just the S&P 500, and it’s really true when you invest in the best stocks.
Finding those elite stocks is the hard part, which is why I put in all that effort into developing my system. There’s no way I would be able to research 6,000 stocks every day, analyze them in multiple ways, and rank them from best to worst.
As you look for the best stocks to own, remember that they share common qualities of superior fundamentals (a healthy business), strong technicals (healthy price action) and strong money inflows (Big Money pouring in).
It matters to be the best, and it matters to invest in the best. Don’t settle if you don’t have to. You’ll sleep better at night and make more money in the long run.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends
