The Quant Dream Team Behind a 244% Average Gain

VIEW IN BROWSER

By Michael Salvatore, Editor, TradeSmith Daily

In This Digest:

How to spot the world’s most powerful megatrends
Meet the “King of Quants”
The college assignment that beat the market
The rare 2% of stocks that returned 244% on average since 2020
Is this ultimate stock strategy?

“War… Good God, y’all… What is it good for?”

For all our differences, most people would agree war is good for “absolutely nothin’.”

That’s probably why soul singer Edwin Starr put it that way in 1969, during the height of the Vietnam War.

War causes untold destruction, costs collective trillions of dollars, and wipes out scores of human life. The world would clearly be a better place without it.

Though, for all its many ills, war does drive necessity. And as we all know, necessity is the mother of invention.

Wartime brings about plenty of frightening technological progress, like the nuclear bomb. But it’s also produced some foundational tech advances that are still in use today.

Take the Global Positioning System (GPS), for example.

First created in 1973 by the U.S. Department of Defense, GPS was originally intended strictly for military use. Its job was to keep track of troops and targets around the globe.

In 2000, President Clinton cleared it for civilian use – and a new way for ordinary people to navigate the globe was born.

GPS has now become ubiquitous. So much so that I’m of the generation that has never driven somewhere new without it. You probably also use it every time you get behind the wheel… or arrive in a foreign city and want to find your way around.

Recommended Link

Log Into Keith’s $2,000 Website Today

A website that shows you the biggest potential jumps on 5,000 stocks – to the day – weeks before they occur. In 2024 alone, it would’ve pointed to gains of 250% in 38 days on (TTWO)… 101% in 10 days on (WSM)… 353% in 48 days on (AON) and more in studies, with 83% backtested accuracy. Claim one free year of access through this special offer.

And this old-school tech didn’t stop getting better…

Fast forward a few years to when a little-known but fast-growing company called Waze created an app that was shooting up Apple’s App Store top 100.

It was a first-of-its-kind social navigation app. It used the same GPS data that Google Maps and its competitors used. But it introduced ways for drivers to alert each other about accidents, speed traps, and other road hazards.

Google scooped up Waze for $1.1 billion in 2013. That sounds like a pittance by today’s standards, where companies are dishing out hundreds of billions for similar technology. But at the time, this was the highest price a company had ever paid for a consumer app.

Google integrated those social features from Waze into its mega-popular Maps app. I’m sure you’ve seen those pop-ups letting you know there’s a traffic jam ahead and a suggested reroute. And maybe you’ve reported one yourself.

The location data Google receives from the app integrates with its advertising platform, commanding nearly $350 billion in revenue in 2024.

It’s a prime example of old-school, foundational tech melding with modern innovations.

And as I’ll show you today, we’re doing something similar here at TradeSmith.

Specifically, we’re taking a foundational “quant” investing technology from Wall Street growth investing legend Louis Navellier…

And upgrading with a unique way of tracking consumer behavior from Andy and Landon Swan.

If you’re unfamiliar with these three, listen in close…

Andy and Landon are the founders of LikeFolio and the inventors of a powerful data engine.

They track social-media chatter (as well as a host of other online data) and turn that into measurable signals about brands and products…

Then, they can find out how many people are talking about a publicly-traded company – favorably or unfavorably. They can detect unusual surges in search or website visits, unearthing new investment trends to follow that most investors still don’t know about.

Earlier this year, Andy and Landon officially joined TradeSmith to help our readers profit from market megatrends.

A megatrend isn’t a fad or a headline-driven rally. It’s a deep, structural shift in how the world works that plays out over decades, not quarters.

Think about the rise of the internet in the 1990s. Investors who recognized that megatrend early and bought Amazon.com (AMZN) or Microsoft (MSFT) and held on have seen an entire generation of wealth creation.

From its IPO in 1997 to today, Amazon is up about more than 246,000%. And Microsoft is up over 517,000% since it went public in 1986.

Another megatrend was the electrification of industry in the early 1900s. Before electricity, factories relied on steam and belts. With it, production became modular, efficient, and unstoppable.

Entire new industries were born. Without electrification, there wouldn’t be telecommunications, consumer appliances, or modern manufacturing.

Early investors who bet on the electrical revolution reaped huge gains on stocks like General Electric (GE) and Westinghouse as electricity became the backbone of modern economies.

Every era brings new unstoppable forces. And today is no different. Think AI, automation, and robotics, to name just a few.

Understanding these unstoppable trends can be hugely profitable. For example, in their MegaTrends advisory, they recently recommended their subscribers close out a trade on small nuclear reactor maker Oklo (OKLO) for 461% in less than six months.

Why Oklo?

Because Andy and Landon recognized that AI’s immense power needs will drive investment into alternative, scalable energy sources like nuclear energy.

Or take Robinhood (HOOD). Back in April 2024, Andy and Landon saw Robinhood as the best publicly traded play on crypto. The app’s high usage among crypto-savvy investors driving skyrocketing revenues sealed the deal.

They expected their subscribers would see a gain of 125%. What they got recently was the chance to book a 560% return.

Then there’s Coinbase (COIN). Back in November of last year, Andy and Landon recommended taking profits of 445% on COIN after taking position 18 months prior. Similar to Robinhood, the Swan brothers predicted that crypto would come back in a big way and that a younger generation of traders would turn to apps like Coinbase to pile in.

And those gains came without any help from Louis Navellier’s quant models.

Now, let’s talk about those models…

Louis’ career as a pioneering quant investor began with assignment while he studied finance at Cal State Hayward.

One of his professors there had a consulting gig with Wells Fargo. He invited Louis to help him run some models using the bank’s mainframe.

Louis was tasked with building a model portfolio of 320 stocks that would track the returns of the 500 stocks in the S&P 500. Only his portfolio didn’t just mimic the performance of the index – it beat it.

This feat was the foundation of the Stock Grader system he uses today. It ranks more than 6,000 stocks based on sales growth, operating margin, earnings momentum, etc. Then if great fundamentals combine with institutional buying and other momentum catalysts – that stock surges in the rankings.

That all gets reflected in an overall grade, just like you’d get in school:

A stock with the highest growth and business quality ratings gets an “A.”
A stock with miserable ratings gets an “F.”

Since Louis started his first newsletter in 1980, this system has flagged 675 stocks that could have doubled your money or more – including 22 that shot up 100 times in value.

He proved that a rules-based system combining fundamental analysis and market flows could systematically beat the index.

Just look at the chart below. It shows how his “A” grade stocks have performed compared to all the other grade categories in his system and the S&P 500.

Note now since 1998, a $100 investment in Louis’ A-rated stocks (blue) turned into more than $13,000. Where the same investment buying and holding the S&P 500 returned just over $1,000.

That’s a 13x outperformance. And performance like this is what’s led mainstream media organizations like Barron’s, Bloomberg, and Fox News to profile him and seek out his views on major financial events.

Matter of fact, here’s a clipping from a 1996 USA Today profile of him.

That’s a 38-year-old Louis in his Nevada home.

At the time, Louis was managing $1.5 billion in private accounts and another $125 million in his mutual funds for his investment firm, Navellier & Associates.

And he was delivering some eye-catching returns.

Over the prior year, his Navellier Aggressive Small Cap Equity fund recorded a 44.6% return, compared with a 30.9% return for the average fund. That’s an outperformance of nearly 50%.

And USA Today reported, from 1990 to 1995, he ranked second out of 409 money managers with a total return of 324%.

It wasn’t just my investment firm that was making headlines. His newsletters were, too.

According to the industry-tracking Hulbert’s Financial Digest, Louis newsletter portfolios had produced a return of nearly 1,400% over the previous 10 years.

And as striking as they were, it wasn’t his returns that interested the press. It was how he was making them.

He wasn’t poring over company reports or charts like most money managers at the time. He was using computers to find growth stocks that outperform the market.

No wonder he’s known these days as the “King of Quants.” And, of course, as computers have gotten more powerful, so has the investment potential.

Now, the Swans and Louis are joining forces…

If Louis is GPS, a pioneering market navigation system that only gotten better as the years have gone on…

…Andy and Landon Swan are like Google – taking that GPS data, melding it with newer tech innovation, and using it to deliver even bigger gains.

That’s why Louis and the Swans recently teamed up to find the rare 2% of stocks that get the greenlight on both their systems simultaneously.

With the help of TradeSmith’s 74-person research team and our $8 million annual budget, they tested how this group of stocks have performed over the last five years.

Here are some of the results…

Their system found more than 240 stocks that went up 100% in this five-year span.
Twelve of them went up more than 10x.
Designed as a portfolio, the system outperformed the S&P 500 by 15x.
And on average, each winning position produced a return of more than 244% – more than triple your money.

These ultra-high performers – what Louis and the Swans call “Ultimate Stocks” – are always lurking out there in the market.

Sometimes they’re household names, like children’s toy retailer Build a Bear Workshop (BBW), which went up 683% during their testing period.

Other times they’re under the radar, like electrical equipment maker Powell Industries (POWL), which went up 945% in just two years.

It’s a fascinating strategy… and one that could help you achieve outsized gains.

So mark your calendar for next Tuesday, Oct. 28, at 10 a.m. ET.

That’s when Andy and Landon will sit down for an exclusive interview with Louis to talk about their collaboration and how they’re bringing this breakthrough new system to their subscribers.

Sign up here, and get limited access to Louis’ Stock Grader system completely free.

Before I go, you have to see this…

Andy and Landon have been closely following telehealth firm Hims and Hers Health (HIMS) for years now.

According to them, the company is pioneering a new model of healthcare with their privacy-focused, web-based platform. Here’s how they wrote about the stock back in April, when it traded at $28 per share (it’s up 68% since.)

Hims & Hers offers personalized treatments for notoriously “stigmatized” ailments through its ForHims and ForHers digital health platforms.

It’s a true one-stop-shop for health and wellness – patients can book online consultations with a vast network of physicians for as little as $39 and get prescriptions for everything from acne to serious mental health disorders.

And just last week, HIMS announced some big news for its women’s health segment. Andy here…

Last week’s launch into menopause and perimenopause care helped send shares above $60 and was just the catalyst we expected.

Search interest for menopause/perimenopause is steadily rising, and For Hers web visits near all-time highs:

This development of menopausal treatment, alongside HIMS’ growing women’s health segment, tells Andy and Landon that the stock is still a strong growth prospect.

Beyond that, they point out that its GLP-1 weight-loss patients continue treatment at a rate about three times the industry average. And it’s all thanks to Hims’ unique, personalized approach to care.

HIMS is a stock to watch and a testament to how Andy and Landon use unique data sources to guide their research.

What’s more, HIMS earns a strong B rating from Louis’ stock grader.

That makes HIMS a great stock… but not an Ultimate Stock.

You’ll find out more about those “Ultimate Stocks” when Andy and Landon sit down with Louis next Tuesday at 10am ET.

Remember, you have free limited access to Louis’ Stock Grader when you sign up for their big event. Go right here to start using it and see what grade your favorite stocks get.

The Quant Dream Team Behind a 244% Average Gain