It all started with a friend asking me if we had any of a certain stock for sale.
Little did I know it would grow to become the biggest trade of my life… And completely change the way I invest forever.
It was back in 2010 and I was the head of my trading desk at Cantor Fitzgerald. And a friend from another big bank, let’s call him “John,” called me to buy some stock for a big client he was trying to keep secret.
My job was to match stock buyers with sellers. Only these were the biggest investors out there.
After a few minutes, I found a seller and offered John 100,000 shares (about $2 million worth). He bought them instantly.
“Do you have any more?” he asked.
This went on all day. By the end of it, I sold him 1 million shares – worth about $20 million. The next day, I sold him another million shares. By then, the price was clearly lifting.
The same thing happened the third day. Another million shares, another lift in the price. And then again on the fourth day…
This went on and on… And after about a month, I’d mopped up and sold him every share I could find – about 20 million (worth over $500 million). And by that time the stock had risen 70%. It was making headlines on CNBC.
A few days later, I finally found out who the buyer was: a massive $20 billion hedge fund. In total, it acquired more than 15% of the company’s stock by buying 50 million shares through me and my competitors.
I knew then that this wasn’t only a special order because it was so big… But it held a secret that revealed itself to me.
Imagine how much you could’ve made if you’d bought this stock before the hedge fund completed its full order… If you’d bought it on the day of the very first order, you could’ve turned $10,000 into $17,000 in just four weeks. Or even much more if you bought options.
Here’s why I’m telling you this story…
Wall Street’s Dirty Secret
I’m going to let you in on something…
Huddled in fancy conference rooms on Wall Street, there’s a small group of people that know about huge trades like these before they happen. And they profit from them all the time. It’s just a fact.
Regular people like you and I could never get an edge like that. But you can get as close as possible…
With focus and experience, you can detect early signals right when these monster orders get underway.
You see, there’s a key difference between when big institutions buy stock and when you or I buy stock.
When we want to buy, we open our brokerage account, click buy, and move on with our day. The entire process takes a minute or two. But when big players want to buy 50 million shares, it’s rare – if ever – that they can do it in one day. They most often have to do so over days or even weeks.
The first day, they’ll rush to grab a chunk of stock because they know their own buying will eventually lift the price higher. Trying not to move the price too much on day 1, they try to “front-load” their orders with chunky volume in the beginning to get better prices.
If you can “see” this type of buying, you can jump in while the Big Money continues buying for days, lifting the stock higher.
So wouldn’t it be great to get a legitimate “heads up” when the Big Money steps in to buy a ton of stock?
That’s my whole mission: to track what these Big Money buyers are doing before everyone else catches on.
Let me show you how I detect this Big Money activity early on…
Two Critical Factors to Tracking the Big Money
Regular readers know I spent more than 10 years and well over six figures to create a stock-picking process that tracks the Big Money moves.
It scans over 5,500 stocks every day, using algorithms to rank each one for strength on several different measures.
And my system is extremely “picky.”
I only want fundamentally sound stocks. Companies that grow their sales and earnings year after year, don’t carry a ton of debt, and are leaders in their market sector.
Unsurprisingly, there’s a ton of junk in the stock market. So my system’s first step is to weed out companies with weak fundamentals.
Usually, I like to see companies with 1-year sales and earnings growth north of 20%. I also like to see this sales and earnings growth continue on a longer-term timeframe, usually a three-year horizon. I love stocks with big profits and low debt too.
For an example, a recent recommendation I sent to my subscribers boasted one-year earnings growth of 28% and three-year earnings growth of 48%. Those are the kind of numbers I want to see. (As it happens, that stock is up over 16% since I recommended it a couple weeks back.)
These fundamental metrics are critical for making sure you’re only in the best stocks. When you grab junk stocks to ride the wave of momentum higher, that might work some of the time. But when you want long, sustainable growth, you have to be “picky” like this.
That’s why step one is to identify the highest quality.
Secondly, and even more importantly, my system looks for Big Money investing in these great stocks. To be clear, there’s a ton of number crunching my system does behind the scenes to determine this. But to simplify: I watch volumes.
You see, whenever a stock’s volume passes a certain high threshold, it suggests Big Money investors are getting involved. Everyday investors like you and me, even in large groups, just don’t trip my system in the same way.
Specifically, I like to see buying volume eclipse that stock’s normal average. As a rough example, if a stock trades an average of 1 million shares per day, then suddenly trades 3 million shares in a day – especially if there’s no big, obvious reason for it – that’s a sign Big Money is pouring in.
When these two key factors come together– strong fundamentals and clear Big Money buying activity – that’s when I know a stock has multi-bagger potential.
That’s why I call these stocks “outliers” – they have all the qualities that suggest they’ll outperform the market and then some.
Of course, there’s much more than just these factors. Using specialized algorithms, my machines parse all this data with a relative snap of my finger. In fact, it all happens before I even wake up each day.
The result is a ranked list of the best stocks being bought by Big Money every week. And it refreshes every single day, so that I’m constantly aware of the best stocks to buy.
Those are the basics to the “secret sauce” to this system. And that’s why it’s lead to gains of 204%, 270%, and 584% for my subscribers over the last few years.
Finding Our Edge
Look, when you find an edge – like knowing the power of Big Money on quality stocks – it’s important to exploit it.
And my system was designed to stacks the odds in our favor.
Now, you don’t need my system to find outliers. You could do it on your own. I gave you the starter recipe above.
To start your search for these outlier stocks, start with fundamentally sound companies, with growing sales and earnings, that are experiencing unusual buy volume. That strategy will put you well ahead of most other investors out there, and give you an edge to outperform them all.
But after decades of expensive research and Wall Street experience, I’ve honed those basics into a finely tuned machine. And if you prefer someone to do the heavy lifting for you – with a precision you can only find from my system – click here to find out how you can get your hands on it…
Editor, Outlier Investor
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