How A Massive Wall Street Trade Inspired My Stock-Picking Breakthrough
Welcome to the first issue of Power Trends …
I can’t wait to share new opportunities, tell you how to survive and thrive in today’s tricky markets, and show you how my quant-based Big Money Indicator and Quantum Score can help you tune out the “noise” – and make you a big winner.
And I know the perfect place to start this journey we’ll be taking together: Here’s the story of the $20 million trade that exposed Wall Street’s biggest moneymaking secret – and the stock-picking system I created to help you profit from it.
We’ve all experienced a defining moment. An epiphany. A point in time when it’s suddenly all very clear – in our job, our personal life, or maybe even back in school.
My moment started when my phone rang – and it changed my investing career forever.
It was 2010, and I was heading a trading desk at Cantor Fitzgerald, the blue-chip New York investment bank. My job was to match big institutional buyers with sellers.
My caller was a friend who managed money at another big bank. And he wanted to buy shares of a stock (we’ll call it KDQ) for one of his big clients.
Within a few minutes, I found someone who was selling 100,000 KDQ shares – about $2 million worth – and offered those to my friend. He snapped them up immediately.
“Do you have any more?” he asked.
I went back to work, dug into my “Rolodex,” and by the time the trading day closed, I had sold my friend one million shares of KDQ – valued at about $20 million.
That’s Big Money already. But I wasn’t finished.
Not even close.
I sold my friend another million shares the next day. By that point, all the money flowing into this stock was lifting its price.
The same thing happened the third day … another million shares … and another bump in the price.
By the fourth day, I knew this was big – really big. Something special.
I was watching … and learning … and experiencing the first flicker of that epiphany I’m going to share with you here. This “foraging” mission for KDQ shares continued for about a month. By the end of that stretch, I’d sought out, mopped up, and sold my friend every spare share of KDQ that I could find – around 20 million in total.
The stock had surged 70% – and people were noticing. It even made the headlines on CNBC.
As this saga was playing out, I had no idea who the “ultimate buyer” was. I just knew it was my friend’s client. But a few days after I’d finished, I discovered that a $20 billion hedge fund had acquired more than 15% of KDQ. Through me and some of my competitors (who’d been tasked with the same mission), this fund had snapped up an aggregate 50 million shares of this stock.
And the stock price had soared.
If Only We Knew…
The “KDQ Affair” showed me the huge gains that were there for the taking – for investors who’d also bought the stock while that hedge fund was buying those millions of shares for itself.
Anyone who owned KDQ on the day of the first order – or who knew what was happening so they could buy it – would have gained 70% in just four weeks. That’s seven years’ worth of average market returns – in just one month.
But how could we have known? Hedge funds and institutions are super-secretive by nature – and do everything in their power to keep their buying quiet. This is Big Money we’re talking about – the money that actually moves stocks – so these players work to diminish the “price-increase effect” even as they keep buying shares. They spread their purchases out by buying in chunks – big chunks, but still chunks – over days or weeks.
The fact is that some people do know. These shadowy Wall Street operators are fully aware of these huge trades before they happen. And they profit off that knowledge.
The rest of us? We’re on our own. At the mercy of all these big operators.
But not anymore.
I didn’t get rich off that trade. But those four weeks and the whole KDQ Affair were transformative events in my life. That experience put me on a mission – one that culminated in my analytics-based system and my proprietary Quantum Score that evaluates the health and potential of more than 6,000 stocks. And it does so every day the market is open.
It’s a system that lets me spot the footprints of Big Money investors on their own KDQ-like missions. Those footprints are invisible to most other investors – but not to me.
This system gets me, and my readers, into these stocks early – when the Big Money buying is just getting started.
It’s legal, predictive – and powerful.
Which is why it took years to create and master.
… Well, We Do Now
After facilitating that trade, I threw myself into the research. I analyzed every piece of data I could find. I asked the smartest people on Wall Street how they decide which stocks to buy … and how they go about buying them.
Over my 20-year career, I’ve learned how to spot these giant trades that play out over days and weeks. It’s Econ 101. When a Big Money player embarks on a buying spree, it means demand for a stock is spooling up. Since supply is holding steady, there’s only one direction for the stock to move … up. If you know what signals to look for, the hedge funds and other operators can’t hide what they’re doing. My system gets you in early – so you can hitch a ride on the rally.
So, how do I find these best-of-the-best Top 1% of stocks that the “whales” are buying and – most importantly – recommend them to my Quantum Edge Pro readers in time for them to make money?
First, I rely on computing power. At any given time, there are more than 10,000 stocks to choose from. But some are illiquid. Some are junk. I eliminate those – immediately.
That gets us down to about 6,000, most of which aren’t going anywhere anytime soon. I use my proprietary “filters” – study the technical and fundamentals – and mix in the wisdom I’ve amassed from my decades as a trader.
And this gets us to the Big Money.
We’ve already created a “short list” of great stocks. Then we look to see which of those stocks the Big Money players are buying – so we end up recommending great stocks – that are ready to move higher.
Bring it all together, and you have the necessary ingredients to make money. You have the highest odds of a winning investment and the highest odds of outperforming the market. (70% of the stocks I currently recommend in my Quantum Edge Pro service are making money, and that’s consistent with my own experience since my backtesting began in 1990 and live-data feed began in 2014.)
But it’s what comes next that matters. And I see higher stock prices, a respite from inflation, and a stronger-than-expected economy here in 2023. And smart investors can follow those Big Money footprints into the stocks with the biggest projected gains.
I look forward to sharing my experiences, my analysis, and my proven system to help you take advantage of these wealth-building opportunities. In fact, I’ll be back on Monday with a look at one particularly interesting area of opportunity.