Reporting Live from the “Idea Incubator”

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By Michael Salvatore, Editor, TradeSmith Daily

For the past 48 hours, I’ve been immersed in a one-of-a-kind financial idea incubator.

Dozens of the great minds that make up TradeSmith and our extended network flew in to Washington, D.C. to present their best moneymaking ideas for 2024 and beyond.

These two days of back-to-back presentations, interviews, and breakout discussions have scarcely been enough to cover everything on everyone’s minds.

But it also produced a litany of rock-solid ideas that could define how you trade the markets both in the months to come… and right now.

Let’s cut straight to the chase today… spilling some beans on the biggest financial research brainstorm I’ve ever been a part of.

❖ Jason Bodner thinks A.I. investors are missing the forest for the trees…

It’s clear to us at TradeSmith that A.I. is the most meaningful technical leap since the internet. And Jason Bodner has prepared his TradeSmith Investment Reportand Quantum Edge Pro readers to take full advantage, with model portfolios full of high-quality growth stocks.

But as he shared with us this week, he also thinks investors have a major blind spot in the A.I. revolution.

Two, actually.

According to Jason, these two less-talked-about factors will unlock A.I.’s true potential. Not having exposure in these areas, while being overweighted in the core A.I. hardware holdings that have dominated the headlines over the last year, risks missing out on even bigger returns if the latter sector runs out of steam.

Even better, the top stocks in these spaces haven’t yet caught the attention of Wall Street, let alone Main Street.

Jason shared these sectors to his Power Trends readers just a few weeks ago…

This is all part of what I’ve called the three-legged stool of the new tech revolution:
  • Artificial intelligence as the most powerful and fastest software the world has ever seen.
  • Quantum computing as the hardware muscular enough to run that software.
  • Next-generation networking that enables the hardware to run the software from the cloud. I don’t expect us all to have quantum computers sitting on our desks anytime soon, but cloud computing means we don’t have to.
Within each of those legs are multiple opportunities paving the way for new and faster technologies.

So clearly there are more “inventions” to come — bigger, better, and faster than ever before. That means more opportunities to come that might also be bigger, better, and faster than before.

As Jason says, quantum computing and next-generation networking are technologies that will be fundamentally necessary for A.I. to scale into smartphone-like market penetration.

And as we’ve pointed out in these pages, the top A.I. leaders are scrambling to fund innovations like these and see their vision become reality. (Sam Altman’s $7 trillion capital raise to enable the future of A.I. should spring to mind.)

If you subscribe to Jason’s work, I highly suggest reading his most recent issues for more on this big theme. And expect more recommendations in this space, very soon.

The good news is, you already have access to everything Jason is telling his readers, thanks to your Platinum subscription. If you haven’t been following along, I’d encourage you to check out his open portfolios inside your TradeSmith Finance account. Even with all his wins, they both still have buyable positions. And I happen to know that he’s planning to release his next pick to TradeSmith Investment Report customers later today.

❖ Options income expert Mike Burnick has a plan to generate 25% annual yields on safe stocks…

Without getting burned.

We warned a few weeks ago about the risks of buying risky stocks with unusually high dividends in the 7%, 9%, and 10%+ ranges… aka “reaching for yield.”

Far too often, these dividends are unsustainable… or come from companies so low quality, the capital losses you endure will more than nullify any dividend gains.

But the need for yield remains. Inflation, while lower than it was back in 2022, is still at a multi-decade high. Keeping up with costs isn’t as easy as it used to be. And the average yield from “dividend aristocrats” — those rare stocks that have paid and raised their dividends for at least a quarter century — is just around 2%.

To solve this problem, Mike Burnick helps his readers use elite options strategies to draw income from the stock market while mitigating the potential risks as much as possible.

His latest strategy, a near foolproof way to capture reams of low-risk income from the markets, is twofold:
  1. Buying an elite group of stable stocks with strong and dependable dividends.
  2. Continually selling short-term covered calls on them.
When you do this, you earn option premium by selling a covered call (the right to buy your stock at a higher price).

If the stock stays the same, falls, or even rises less than the price you’ve agreed to sell it, you’ll keep the premium when the option expires and repeat the process. If the stock rises and the option is exercised, you’ll simply sell the shares at the price you’ve agreed to. And all along the way, you’re earning dividends from holding the stock itself.

The beauty of this strategy is how unlikely it is to lose money. The only way that can happen is by taking a capital loss on the core stock holding.

But with Mike’s strategy of owning an elite, long-term-oriented portfolio (especially containing stocks in a cheap, high-yielding sector), this risk is minute.

Using these specific core holdings to write covered calls twice a month, Mike has determined it would result in an annual yield of 25%. Two days of work a month to increase your annual income by a quarter… that’s nowhere near shabby.

Stay tuned to learn more about this strategy from Mike.

Or you can try it on your own and let us know how you do by writing us at [email protected].

❖ Another use case for our analytical engine An-E is coming…

And any technical chartists reading this are going to love it.

I’ve had the unique opportunity to start working with our internal development team, a group of dozens of computer programmers and machine-learning experts dedicated to making TradeSmith the world’s most robust analytics platform.

Among that team is John Jagerson and Wade Hansen, a duo of traders who’ve been working together since their first forays into the currency markets before the turn of the millennium.

Lately, John and Wade have been focused on chart pattern recognition as an area of intense research.

You see, chart patterns are a core element of predictive trading. When certain patterns manifest on charts — some much stronger than others — you gain a high degree of certainty of the next likely move for a stock, crypto, currency, and plenty more. It’s like getting a clear picture of traders’ emotions in a single image, and exploiting those patterns of human behavior to profit.

Now, John and Wade have found a way to apply An-E’s predictive power to screening charts for a specific, three-part pattern that they’ve found to have the most consistent record of predicting gains.

Here’s just one of many examples of this pattern that we’re tuning An-E to automatically find:

Depending on the sequence of these three parts, a stock could go up, or down, in rapid fashion.

Our next big step is to create a method of screening the entire financial universe for assets showing this rare, but powerful pattern — among others.

And just as John and Wade currently do in Predictive Alpha, Predictive Alpha Prime, and Predictive Alpha Options, they’ll recommend the best of the best setups for subscribers to take advantage of. As with all these big ideas, stay tuned for more on when this becomes available.

❖ Andy and Landon Swan’s bitcoin price prediction blew me away…

Bitcoin has been one of the best trades of the past year, with its price up over 200%. It’s knocking on the door of a fresh high.

Where could it ultimately wind up? According to Andy and Landon Swan of Derby City Insights, $1 million per bitcoin is in the cards.

That would put the King of Crypto at a market cap of well over $10 trillion.

And before you say that’s absurd, consider that the gold market today stands at over $14 trillion.

Also consider the sheer amount of wealth that is not yet in crypto. Registered investment advisors and family offices still can’t touch the stuff, with many having to wait until the new ETFs have traded for several months before they join the party.

That call alone is worth mentioning. But it’s what Andy and Landon have in store for the rest of the crypto market that really caught my attention.

If you aren’t acquainted with the Swan brothers’ unique approach, they’ve built a social media-scanning algorithm that clues them into both investor and consumer sentiment on publicly traded companies.

With this sentiment, they’ve gained a proven edge trading stocks and especially earnings reports.

Just as a few examples:
  • Several positions recommended in their MegaTrends newsletter recently hit 52-week highs. They also locked in gains of 217% on one of those, DKNG.
  • One small-cap pick they featured in their Five A.I. Companies with 1,000% Potential (And Three to Avoid) special report in MegaTrends recently popped 70% on an Nvidia endorsement.
  • Another stock is up more than 80% since they recommended it just a few months ago.
All of these were found in part thanks to their social media-based trend algorithm.

And now, Andy and Landon are applying this technology to the crypto markets.

And let me tell you, as someone who made quite a chunk of money buying smaller-cap altcoins I saw mentioned on social media last cycle, the profit potential here is enormous.

One thing that must be said about this is that Andy and Landon don’t intend to swear allegiance to any given crypto position. They understand, rightfully, that crypto markets move in big waves up and down. They aim to play this with a swing trading strategy, where they intend to capture the bulk of the gains in a given cycle.

And whether the crypto has utility or not is no matter. If their system says it’ll make their readers money, that’s more than enough to recommend a position.

Keep a close eye out for Andy and Landon’s crypto research in the coming months. And in the meantime, I highly recommend checking out both LikeFolio Investor and MegaTrends for their stock research. They’ve nailed more than a few calls over the last year, as I just showed you, and they’re recommending more all the time.

❖ And there’s so much more to share…

What I’ve shared today covers much less than half of what was discussed during the two-day event. It genuinely just scratches the surface.

New ways to optimize your portfolio with TradeSmith’s tools… Cutting-edge tech in longevity research and how it crosses with A.I…. A brand-new live-trading experience with expert guidance… Focused investment into the realm of quantum computing… And new indicators to help you identify the top growth stocks in the market are just a few examples of new research in the works.

And as these ideas take shape and begin to publish, you’ll be the first to hear about them here in TradeSmith Daily.

Stay tuned,

Michael Salvatore
Editor, TradeSmith Daily