If You Thought the Start of 2023 Was Great, Your Brokerage Returns Will Get Even Better After the 'Big Lift'
When I got a chance to catch up with Jason Bodner — the inventor of the Quantum Edge investing system — our talk quickly turned to one thing he's watching like a hawk.
The record amounts of cash sitting idly in money-market accounts.
To be exact — $5.7 trillion.
And the "yield" on that cash is downright pitiful — 0.23% — so those cash "investments" aren't really earning anything when you factor in inflation — they are in reality losing money.
Quite the opposite compared to the 49% gains of Amazon.com Inc. (AMZN) this year. Or the 136% return of Tesla Inc. (TSLA).
Or the 220% return of Nvidia Corp. (NVDA).
But I don't have to cherry-pick the performance of the "Magnificent Seven."
Just investing in an S&P 500 index fund at the start of the year is an 18% return.
Jason says investors still haven't woken up yet because they are waiting for the Federal Reserve to ring the "all-clear bell." Those on the sidelines want more data-confirming announcements that inflation keeps lowering and that the Fed is finishing its rate-hike campaign.
Jason believes that the "light bulb" will soon flicker on for those who have missed out on these gains; $5.7 trillion will move from the sidelines and pour into stocks.
I bolded that line above for a reason.
Those trillions of dollars mean there will be more demand for stocks.
In other words… you have the potential to profit handsomely because of your forward-thinking decision to be in the market and not on the sidelines.
But with only a few months left before we say goodbye to 2023, the window of opportunity is closing.
A.I. is a godsend for investing. It's like having 100,000 financial analysts at your fingertips... which is why it's at the heart of TradeSmith's newest innovation — an A.I.-driven stock price predictive algorithm called An-E (pronounced Annie, short for Analytical Engine). And, it was recently introduced to the public for the first time.
Jason spent decades perfecting his Quantum Edge system, and as someone who loves to get "under the hood" of things with my background in tech, we've spent hours discussing what makes his system hum.
But I won't bore you with those details, because all you really need to know is that the Quantum Edge system finds opportunities with superior fundamentals, powerful technicals, and Big Money coming in.
And that third point is the one I want to zero in on today because two stocks fit the bill for attracting Big Money.
Knowing the stocks Big Money is scooping up, you can piggyback off the moves of some of the smartest hedge fund managers to create your own moneymaking opportunities.
One of those is in the beauty industry.
People are embracing a more "natural" look — and e.l.f. Beauty Inc. (ELF) is winning over consumers with lip gloss, eyeshadow, and beauty balms. And with its e.l.f Beauty Squad program — which offers "points" for each purchase made — the company has "gamified" customer loyalty, even granting personal consultations for folks who achieve "Icon" status.
Source: ElfCosmetics.com
But if buying makeup isn't in your lane and you never heard of this company before, don't worry.
I'm also more interested in the making money lane, and Jason told me that Big Money is all over this stock.
In the past six months, his system picked up 24 Big Money buys in ELF (versus zero sells):
Those Big Money buys were especially prevalent in the spring, and that's no coincidence: These Wall Street players were snapping up ELF ahead of its earnings report.
And the bulls were rewarded on May 25 when e.l.f. Beauty shares leaped 20% when the company beat forecasts for both revenue and profits — and, unlike many better-known companies, it raised its forward guidance, too.
ELF is hitting the "upper end" of Jason's preferred "buy zone."
Measure What Matters
There are plenty of marketing agencies that will gladly take a company's money and start creating advertising campaigns for it and pour out ads.
Finding those companies isn't difficult.
What can be difficult is finding a marketing company that can actually prove your ads are effective in connecting you with your target audience and measuring if those campaigns are a hit or miss.
Enter DoubleVerify Holdings Inc. (DV).
It used unbiased data analytics to get down to brass tack on the performance of a campaign, allowing a company to see the effectiveness and return on investment (ROI) of its advertising efforts.
One of its partners is Meta Platforms Inc. (META), where it provides the background support to enable media measurement and helps maximized advertiser performance on Facebook and Instagram Reels.
Meta will make the front page for headlines about its newly launched Threads or the "cage match" between Meta CEO Mark Zuckerberg and Tesla Inc. (TSLA) CEO Elon Musk, but what's NOT on the front page are the companies behind the scenes, like DoubleVerify.
But that's okay because it means we can keep enjoying having an investable edge with Jason.
Its stock has enjoyed plenty of Big Money buying, too — particularly in May and June — and is appearing frequently in his Top 20 list.
DV is also hitting the upper end of Jason's preferred buy zone.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
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