My first job in the investment business was with James P. O’Shaughnessy, a renowned quantitative researcher and the author of the investment classic What Works on Wall Street.
While working as his intern during college, I learned a great deal about building and developing powerful investment strategies.
It’s the foundation of my entire career.
Fast-forward about 12 years and I had already managed two hedge funds that capitalized on major implosions in the stock market, using a combination of deep-dive forensic accounting and my own formulas.
I was in the process of launching a fund on the New York Stock Exchange, and I had a bit of extra time on my hands.
So, I set down to create a fully functioning software program that used all the best tools and techniques I’d picked up during those early days writing code for O’Shaughnessy and while analyzing financial statements and SEC filings of hundreds and hundreds of companies.
When I finished building out my software, I noticed a strange outcome: It was better at identifying stocks on the mend that dramatically outperformed the broader stock market than it was at suggesting a basket of stocks on the brink of disaster.
To be sure, the worst-ranked companies did underperform – but not by as much as the top-ranked companies outperformed.
In my work, I’m mostly focused on stocks that I think will go down. I’ve been interested in short-selling for more than 20 years, and I’ve seen some major successes.
As you might imagine, though, this long, grinding bull market has certainly been trying.
Meanwhile, over the years, I’d been approached by major firms about my software. For a while, I did some consulting and was handsomely rewarded.
One of the largest trading firms in the U.S. approached me. They’d been using my book, What’s Behind the Numbers?, to sell their software to some of the biggest institutions in the country. Later, a large European bank with no U.S. research wanted to use my formulas to establish rankings of U.S. stocks.
Unfortunately, because the lawyers showed up to ruin everything for all parties involved, neither opportunity came to fruition.
Since then, I’d held it in my back pocket.
Then, a few months ago, I started playing around with my formulas again. And I started to wonder… Could we juice returns without using leverage or making complicated trades?
That’s when I had my “Eureka!” moment…
Instead of looking at blue chip stocks, what if I focused on the next blue chips?
What if I looked in areas of the market Wall Street can’t?
So, I zeroed in on stocks trading under $10 a share. And the results were staggering…
And, on February 26 at 1 p.m. ET, I want to tell you all about it. That’s something else I learned from O’Shaughnessy, to be generous with knowledge…
I’m setting the foundation for this strategy in a live presentation, and I invite you to be a part of it…
John Del Vecchio