Editor’s Note: We recently introduced you to Crowdability’s newest contributor, Andrew Zatlin. Andrew is known for being Bloomberg’s #1 Jobs Forecaster. And we believe his “Moneyball” approach to investing can help you make money in the markets. Today, he’ll reveal his secret weapon for predicting big stock moves. Enjoy!
I’m currently sitting on a powerful investment secret.
This secret is what’s led to my No. 1 ranking on Bloomberg. This is how I consistently beat out research teams from top Wall Street firms like JP Morgan.
And starting today, I’ll reveal how this secret can help you invest more successfully.
But I’m getting ahead of myself.
Before I show you what this money-making secret is, let me tell you how I stumbled onto it in the first place...
SETTING: Kyoto, Japan.
DATE: Late 1980s
CHARACTERS: A young Andrew Zatlin (that’s me!) and my Economics Professors
It’s the late 1980s and I’m living in Japan. I’m a Research Fellow at the Kyoto University Institute of Economic Research.
Japan finds itself at a turning point.
Geographically, the country is isolated. It sits at Asia’s edge, with only the Pacific Ocean to the East. It’s also isolated culturally, thanks to the country’s efforts to reinforce the separateness of the Japanese people.
But in the late 1980s, Japan burst onto the world stage as an economic powerhouse.
You see, because of actions taken by President Ronald Reagan, the yen quickly doubled in value. Practically overnight, the Japanese became wealthy.
At the time, my research focused on emerging Japanese consumer trends. I was fascinated by the fact that Japanese consumers were being ripped off. They were paying $100 for a bottle of Jack Daniels, and $10,000 for a one-week trip to Hawaii. Why were they paying up? Because of their isolation, they just didn’t know any better!
But I believed change was on the horizon. My thesis was that Japanese consumers would start behaving like consumers everywhere. My professor disagreed. And he wasn’t alone. Many Americans working in Japan thought the same thing.
What gave me the confidence to think differently?
Simple: I had data! I was spending time with the younger generation. So I had evidence that their spending habits were changing rapidly.
And as it turns out, my data-backed thesis was soon proven correct.
But perhaps you’re wondering — what does this have to do with investing?
For The Biggest Gains, You Need “Magic” —
You Need Data
Investing isn’t rocket science. For example:
If a company or sector is poised to grow, invest in it.
And if its growth is slowing, disinvest.
But how do you know if a company is poised to grow?
As I learned in Japan, if you can identify the right data, it can be used as an indicator — an indicator that can tell you, in advance, what’s about to happen.
Here’s another example:
If you’re trying to figure out if General Motors is growing, do you ask GM’s management? Or do you ask the folks at Goodyear Tire?
Who would you ask? I’ll wait for you to guess…
The answer, of course, is Goodyear!
Because before its cars can be sold, GM needs tires from Goodyear. So if you know that Goodyear is shipping more tires to GM, you know that GM is growing.
There’s just one challenge here: getting Goodyear’s tire data!
But as it turns out, for Goodyear — and for most publicly traded stocks — there’s an excellent proxy for this data that we can get:
Hiring Data (“HD”) Is My Secret To Knowing Which Companies Are Growing — BEFORE Earnings Are Announced
I spent the last decade gathering accurate hiring data on hundreds of companies.
And once I had that data in hand, I was able to build a “better mousetrap” to predict how changes in company hiring will lead to changes in company earnings.
It’s all based on a fundamental truth:
If a company is expecting its sales to grow, it will hire more. And if it expects sales to slow, it will hire less.
You see, in the short-term, a company has few levers to pull to ensure it’ll meet Wall Street’s earnings expectations. (Companies don’t want to fall short of that number, because that would send their stock tumbling.)
Speeding up hiring, or delaying it, is one of the main tools a company has to impact sales.
Companies know how many employees they need to support any level of sales. It’s a ratio, a formula: they need X people to support Y in sales.
Well, for the last 12 years, I’ve been tracking hiring at 800+ companies. That’s how I eventually reverse-engineered each company’s unique formula.
I now have a very powerful financial model…
A model that can predict sales growth based on hiring data.
This Is the “HD Secret”…
But Can You Make Money From It?
My model is incredibly accurate for several hundred companies.
Why? Because today’s hiring is tomorrow’s earnings.
And in the coming weeks, I’ll show you how to use this secret to target big, predictable gains in your portfolio.
Stay tuned for more!
In it to win it,