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An Incredible Stock Market Money Maker Formed Amid Chaos

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[Editor’s note: “An Incredible Stock Market Money-Maker Formed Amid the Chaos” was previously published in July 2022. It has since been updated to include the most relevant information available.]

It’s been a savage year for stocks, huh? There’s a lot of fear swirling around the stock market, not the least of which is an impending recession. But what if I told you that all this volatility creates the lucrative opportunity of the century?

You would look at me funny, quite skeptical. And it’s good. Don’t ignore it, because I have a ton of data to prove this claim. Today we are on the cusp of the stock market’s greatest investment opportunity… already.

Yes, I am aware of all the problems facing the world today. There has been high inflation for decades and a US Federal Reserve that is on the most aggressive tightening path since the 1970s. A war in Europe is raging for the first time since World War II. Higher gas and grocery prices are hitting us squarely in the pocketbook. The Covid-19 lockdowns in China continued to ripple through the global supply chain. And the stock market had its worst start to a year since 1942.

Talk about the unusual and the volatile. It’s downright scary.

In this context, I wouldn’t blame you for wanting to run for the hills and take shelter from the storm. But the great Warren Buffett once said it was often better to be greedy when others are scared.

And everyone is scared right now. The percentage of bullish individual US investors stands at just 18.07% today. Investors are less optimistic today than they were during the Covid-19 pandemic, the 2008 financial crisis and the dot-com crash. Let that sink in for a moment.

A graph illustrating the evolution of the percentage of optimistic American investors

There’s nothing but fear there. And Buffett would tell us to get greedy here. Should we take these tips into account?

Absolutely.

The ultra-rare stock market phenomenon

Over the past few months, my team and I have studied the intricacies of stock market crashes throughout modern history. And we discovered something amazing.

Concretely, we have discovered an ultra-rare stock market phenomenon. And it consistently offers the best buying opportunities in US stock market history.

Additionally, we have figured out how to quantitatively identify this anomaly. Even better, we have devised a way to make the most of it for massive profits.

Well, friends, guess what’s going on right now?

This ultra-rare market phenomenon is resurfacing right now. And our models emit bright “buy” signals.

I say. This may seem counter-intuitive, given the current volatility.

But I’m betting my career on that claim – because it’s not an opinion. It’s a fact backed up by data, history, statistics and math. Indeed, it is backed by the greatest market phenomenon in history.

So, I repeat: we are faced with the opportunity of a lifetime.

By now you’re probably thinking, Okay, Luke, you have my attention. But where is this proof?

I’m glad you asked because I have plenty. Let’s take a deep look.

Stock prices follow fundamentals

To understand the single event that my team and I have identified, we must first recognize the behavior of actions.

In the short term, stocks are influenced by a myriad of factors, such as geopolitics, interest rates, inflation, elections, recession fears. The list continues.

However, in the long run, actions are driven by one thing and one thing only: fundamentals.

Ultimately, revenue and earnings determine stock prices. If these fundamentals tend to rise over time, a company’s stock price will follow and rise. Conversely, if revenue and earnings are trending lower, the stock price will fall.

This may seem like an oversimplification. But, honestly, that’s not the case.

Just look at the following table. It graphically represents the earnings per share of the S&P500 (blue) next to the stock price (orange) from 1988 to 2022.

Price versus S&P 500 (SPX) EPS

As you can see, the blue line (earnings per share) lines up almost perfectly with the orange (price). The two couldn’t be more strongly correlated. Indeed, the mathematical correlation between them is 0.93. It’s incredibly strong. A perfect correlation is one. And a perfect anti-correlation is negative.

Therefore, the link between earnings and stock prices is about as perfectly correlated as anything in the real world.

In other words, you can forget the Fed and inflation. You can forget geopolitics, trade wars, recessions, depressions and financial crises.

We have seen all of this over the past 35 years. And through it all, the correlation between earnings and stock prices has never broken or even weakened at all.

Ultimately, earnings drive stock prices. History is clear on this. In fact, mathematically speaking, history is as clear on this as on anything.

Big Divergences Create Big Opportunities

The phenomenon that my team and I have identified is related to this correlation. In fact, it is a “break” in this correlation.

Sometimes a rare anomaly appears in the market, and profits and revenue temporarily stop driving stock prices.

We call this a “divergence”.

During these events, companies see their revenues and profits increase, but stock prices temporarily collapse due to macroeconomic fears. This results in the stock price deviating from its fundamental growth trend.

And when stock prices inevitably return to fundamental growth trends, these rare divergences become generational buying opportunities.

This has happened over and over again throughout the history of the markets.

It happened in the late 1980s during the savings and credit crisis. High quality growth companies like Microsoft (MSFT) saw stock prices plummet while revenues and profits continued to rise. Investors who took advantage of this divergence doubled their stake in a year. And on average, they have achieved mind-boggling returns of around 40,000% over the long term.

A chart illustrating stock price movements, 1988 divergence window

It happened again in the early 2000s after the dot-com crash. High quality growth companies like Amazon (AMZN) saw stock prices plunge into the crash. But revenues and profits continued to rise. Investors who took advantage of this divergence more than doubled their money in one year. And they got over 20,000% long-term returns.

And it happened during the financial crisis of 2008. High quality growth companies like Selling power (RCMP) saw stock prices plummet, while revenues and profits continued to rise. Investors who took advantage nearly tripled their money in one year and achieved 10x returns in just five years.

This is the most profitable repeating pattern in the history of the stock market. And it’s happening again right now.

Volatility creates opportunities

Market volatility always creates market opportunities.

So over the past six months of wild market swings, we have made it a priority to seek out that volatility. We sought to develop a stock picking strategy to make tons of money in unpredictable markets.

This led us to make the greatest discovery in InvestorPlace the story: the existence of rare windows of divergence.

These windows only appear at the height of market volatility. They open for brief moments – and only in certain stocks. But if you take advantage of it by buying the right stocks at the right time, you can make huge gains. And you can do it while everyone is struggling to survive in a choppy market.

Indeed, these divergence windows give you a real shot at turning $10,000 investments into multi-million dollar paydays.

The more we searched for these discrepancies, the more excited we became.

And then we made the biggest discovery of all: a whole new divergence is forming. at present.

Last Word on the Biggest Stock Market Phenomenon

Our models indicate that this is one of the largest divergences on record. This means that the potential profits to be made will also be among the greatest ever.

But timing is key here.

The huge multi-thousand percent gains made in previous divergences were only possible if you bought the right shares exactly at right time.

And our models sent the perfect “buy” signal.

Please donate a watch to our research. After that, I will send you all the information I have on these discrepancies. I will show you all the graphs and data. I will illustrate the opportunity very clearly here.

This is the most exciting I have ever had in my career as we are in the midst of the financial opportunity of a lifetime.

Step into this wave of massive wealth.

As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.