MARC: These are ALL the chipmakers that tried to become Nvidia. Exar Corp. – crashed 41% and delisted. And more. Molly, these are the kind of losers that give “manias” and “booms” such a bad reputation… because they show up during every megatrend with much the same fanfare as the winners. MOLLY: This is where your new EQ filter comes in, I take it… MARC: Without the Power Gauge – and especially without our EQ filter – you might’ve been tempted to buy any of these wannabes, Molly… After all… Exar Corp. was once backed by a man who made a billion dollars on a single trade! But we knew better… Consider this… MOLLY: The Chemours Company. Huh, never heard of it… MARC: This company was as little-known as the losers I just showed you when it lit up Double Bullish on the Power Gauge on May 21, 2016 in our backtest. Remember, by “Double Bullish,” we mean it had both VERY HIGH earnings quality on our new filter… AND simultaneously had a classic Bullish rating on our system. It’s like finding a four-leaf clover in the Power Gauge. Now, why is that date significant? Because that was right around the start of the big semiconductor boom that launched Nvidia into a household name. And only a year after I’d recommended Nvidia myself during a bear market. MOLLY: How many semiconductors were trading at that time? MARC: Around 100. That’s 100 stocks all trying to become the future Nvidia, and all vying for your cash with dressed-up earnings reports… But ask yourself this… How many of those 100 stocks simultaneously lit up both the Power Gauge AND our new EQ filter as Bullish?
MOLLY:
I’m guessing not many…
MARC: 4!
Just 4 stocks out of 100, Molly! That’s as hard as being admitted to MIT. One of these names was Chemours Company. And sure enough, watch what happened next…
MOLLY: Fascinating… A 562% gain. That’s 6 times your money in 17 months on a stock I’ve never even heard of before.
MARC: That’s the secret behind every breakthrough sector, Molly… You can ignore all the Wall Street analysts… ignore all the think pieces telling you to buy a given stock… And simply look at one thing to make your decision. EARNINGS QUALITY. MOLLY: Why are earnings so important? MARC: Because nothing exposes a wannabe in a breakthrough sector faster than low-quality earnings. The simple fact is… If a company hasn’t developed some innovative new efficiency to make money on a repeatable and growing basis, they’re doomed. MOLLY: OK – and in this case, I see two numbers behind the EQ rating.
MARC: Yes. These are the numbers we’ve determined give a TRUE picture of what’s really happening with a company’s earnings… which we calculate through our proprietary algorithm. Together, these lit up Chemours’ earnings quality as “High.” A Bullish rating. It meant the company’s earnings – unlike all the “fakers” I showed you earlier – were consistent and repeatable high-growth. MOLLY: Can you explain more? I don’t need a course in accounting but… what goes into those numbers?
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