Note From Jeff Brown: Our focus in The Bleeding Edge is on the latest developments in the world of technology. But today, we’re bringing our readers some special insights from Jason Bodner, an expert financial analyst. And he’s sharing how investors can win by following what he calls outlier investment opportunities.
Jason discovered these unique stock plays while working on Wall Street, where he routinely traded more than $1 billion worth of stock for his clients… often in one day. He used that experience to craft his own proprietary stock-picking system, which he uses to help investors outperform the markets.
I’ve actually followed Jason’s work for the last three years, and I’ve been very impressed. Like me, Jason is determined to balance the scales for regular investors.
That’s why I’m excited to tell you about a special event we’re putting together. Next week, Jason and I will show you exactly how he achieved striking gains of 105%, 285% and even 829% from a little-understood segment of stocks. And we’ll let you know about the top outlier investment opportunities on Jason’s watchlist.
We’re calling it the Outlier Investment Summit, and it all happens on Friday, February 26. You can go right here to sign up.
And once you do, keep an eye on your inbox. Jason and I will send you a special link on the morning of February 26th inviting you to take part in this exclusive event…
 |
By Jason Bodner
When I say the words “statistical analysis,” what comes to mind?
Maybe you’ll recall sweating over tricky tests in high school… Maybe you’ll just start snoozing. Or, if you’re like me, your ears perk up with excitement.
No matter how you feel about it, statistical analysis shapes our daily lives. By modeling huge data sets, we can determine the most likely outcome of lots of different scenarios.
These expectations shape everything in our world – speed limits; insurance premiums; load-bearing beams in your house; the life expectancy of people, cars, and iPhones…
The list goes and on and on.
Whether statistical analysis bores or excites you, you unwittingly rely heavily on statistics every day of your life.
That’s why outliers are problematic…
A Good Problem to Have
In statistics, an outlier is a data point that differs significantly from other observations. That’s why outliers are often excluded from data sets. They can muddy an otherwise clear picture.
Imagine your child feels sick. You measure their temperature with a touchless thermometer. The first reading says 99.2 degrees Fahrenheit. That’s a little high, so you do it again. The second reading says 145 degrees… obviously wrong. So a third and fourth time, each one says 99.2 degrees. You obviously throw out the outlier in this case.
This makes sense in most scientific scenarios. But it doesn’t always. Here’s an example…
Tom Brady, quarterback for the Tampa Bay Buccaneers, has been to 10 of the 55 Super Bowls in history (18% of them). As of the most recent Super Bowl, he’s won seven of them (13%). And he’s only been playing football professionally for 21 of them. That means he’s won one-third of the Super Bowl games he’s seen in his career, and won seven out of the 10 he’s played in.
That is a statistical outlier: a clear deviation from all other quarterbacks in history. But do you throw him out of the data set? Absolutely not. In this instance, Brady becomes the data point to pay attention to.
So it doesn’t always make sense to exclude the outliers. In fact, in my own career, I don’t throw out the outliers at all. On the contrary: I throw out everything but the outliers.
My Outlier Mission
You see, the outliers I focus on are outlier stocks. These are the stocks that outperform every other. The stocks that – whether you realize it or not – carry the whole market on their backs.
If you’ve been reading my Bleeding Edge contributions for the past few weeks, you know that I built a unique algorithm that uncovers these outlier stocks.
It picks them based on a few key factors. These are fundamental strength, bullish technical patterns, and most importantly, unusually large volumes of buying. This volume tells me a major Wall Street institution is getting involved – what I call the “big money.”
These filters narrow down the entire stock market universe to just 20 names each week. And from that, I start digging for more info to find the absolute best stock to buy.
These stocks have gone on to hand me – and my readers – unthinkable gains. Since I started publishing my ideas to a small group of subscribers, I’ve posted a 91% win rate.
And I’ve seen an average position return of 126% and open gains as high as 1,000% in just a couple of years. (And that’s after recommending closing half the position to ride the gains for free.)
That’s why, when it comes to stocks, I say keep the outliers and forget everything else. And I’m not the only one who thinks this way…
Hendrik Bessembinder agrees. In 2017, he wrote a paper titled “Do Stocks Outperform Treasury Bills?”
In it, he studies more than 26,000 stocks over 100 years’ time.
And he found that since the 1920s, only 4% of all stocks accounted for 100% of the gains of stocks over Treasury bills. And only 1% of stocks accounted for 50% of the gains of stocks over Treasury bills.
Statistically, these stocks are outliers. They would be ignored in traditional analysis.
But in doing so, an investor would throw out any practical chance of beating the market. So that’s why I’ve devoted my career to finding this 4% and reaping the rewards…
How I Spot the 4%
Let’s take a look at one of the top outlier stocks: NVIDIA (NVDA).
It has appeared on my weekly quant-generated buy reports 77 times since the year 2000 – including back-tested data.
And even more impressive, it’s appeared in 53 weekly reports out of a possible 345 since I formally started publishing data science on stocks in 2014. (345 weeks have passed since July 1, 2014. That’s when I made this my official life’s work.)
NVDA has naturally been a big winner since its first appearance on my live reports. It’s up 2,680% since then. That includes trade war fears, volatility-fueled product blow-ups, and a pandemic!
And since I first recommended it to my subscribers, it’s up 225%.
(Note that NVDA is well above the suggested buy-up-to price I sent to my subscribers. I don’t suggest purchasing it at today’s levels.)
Here’s a chart of each NVDA buy signal, including back-tested data shaded in gray.
Here’s my point…
When it comes to analyzing stocks, not only should you keep the outliers – you should toss everything else. That’s where the real money is. Bessembinder proved it!
Using data science completely changed my investing career. It taught me the true path to independent wealth – buying and holding outliers like NVDA for consistent, outsized returns. Like Tom Brady, outlier stocks just keep winning… regardless of what the market does.
In such volatile markets where opportunities zip by every day, one can easily get overexposed to stocks with unclear direction. Following this system is what got me free of that, and it got me adding zeroes to my brokerage account.
And next week, I’m putting on a special presentation to show you exactly how I achieved this – starting with just a humble salary and a big idea.
I’m calling it the Outlier Investment Summit. And to prove to you how confident I am in my system, I’m giving away my most recent watchlist of outlier stocks – free to all who attend. Sign up right here to secure your seat.
Stay bullish!
Jason Bodner
Like what you’re reading? Send your thoughts to [email protected].