Could Momentum Investing Be Your Secret to Doubling in a Bull Market?
Summary
Momentum Investing: The podcast emphasizes the power of momentum investing, which suggests that stocks that are rising will continue to rise, offering a compelling strategy for investors in a bull market.
Historical Success: Historical examples, such as the turtle traders and Richard Driehaus, demonstrate the effectiveness of momentum strategies, with significant returns achieved by following simple momentum-based rules.
Market Dynamics: Despite market highs, the podcast argues that investors should not be deterred due to the strong momentum, which can sustain market growth longer than expected.
Investment Strategy: The discussion highlights a strategy combining momentum with uniform accounting to identify stocks with both strong price momentum and solid fundamentals, increasing the likelihood of further gains.
Current Market Conditions: The podcast notes the ongoing investment cycles in AI and supply chain restructuring, which are driving significant corporate earnings growth, further supporting a bullish market outlook.
Risk Management: Momentum is presented as a way to de-risk investment strategies by focusing on stocks that have already demonstrated strong performance, thus offering a higher probability of continued success.
Future Opportunities: The podcast introduces Altimetry's research tools, which aim to identify the next set of stocks poised to double, leveraging momentum insights to capitalize on upcoming market opportunities.
Transcript
Every investor dreams of finding the secret that drives the market, of discovering that one simple indicator that leads to compounding returns and huge riches. And it is rare, but it actually does happen. Right now, investors need that sort of clarity. And today, I'm going to show you how you can get it. After all, with stocks hitting new highs, investors are conflicted. Have stocks simply ran up too high? Should you be panicking or are you missing out? Uh should you be piling in to take advantage of this bull market? Well, I have the answer for you today. And I know I often use this show to point out risks in the market. But once you understand how markets work, there's a simple rule that you need to follow that suggests you should be invested in stocks today. So, I'm Matt Wein at Stanberry Research and after 20 years studying the market, to me, this is the simplest and most powerful lesson you can learn. And I'm going to tell you all about it today. So, let me start with a story. And it's an unusual story. It's a it's a story about a grad student who wrote a paper on investing and what he discovered led him to become a billionaire. So, this student was at the University of Chicago and he worked under renowned economist Eugene FMA. FMA is a Nobel Prize winner and he earned his fame working on the efficient markets hypothesis. That's says that you can't beat the stock market because it's too random. But this grad student named Cliff Asnes ran into real trouble. He his research completely contradicted that of his mentor and Asnes looked through the data and decided that you could beat the market with here it is momentum. Now, Asnes nervously told FMA, his adviser, that his paper would be pro momentum. And to his credit, FMA said, "If it's in the data, write the paper." So, with that 1994 dissertation, Aznes essentially proved that momentum matters in markets. And that simple insight led him to build AQR Capital Management, which now boasts $120 billion of assets under management. And Asus himself holds a $3 billion fortune of his own. So what is momentum? This magical momentum that drives markets. Well, it simply means that stocks that are going up will continue to go up. It's as simple as that. But in markets, momentum is real. It's not a superstition or it's not voodoo lines drawn on a stock chart. Momentum will tell you which stocks will go up and which will go down. It's been proven time and time again in all sorts of studies and and academic research no longer tests whether momentum works but instead seeks to find out why it's persisted through the decades. It's that established a feature of markets. So momentum is why investors shouldn't get scared out of this market even as it hits new highs. That's the biggest lesson everyone should take from the mathematical history of markets. And like I said, I often use this show to point out things that have me worried. I've talked about tariffs, overhyped AI stocks, threats to the US dollar, the need for defensive holdings, but readers of Stanbury Research know we've been recommending stocks the entire way up. And this is what I consider the proper job of an active investor. You want to be driven by optimism, but tempered with measured skepticism. You need to be optimistic because markets do tend to go up over time. Economies grow, businesses expand, technology gets invented and raises productivity. But when your capital's at risk, you need to spend your time watching for risks without overreacting to them. That is the balance. So you can't ignore the market's momentum. After all, the history of investing is rich with momentum focused traders who have gone on to post incredible returns over multiple decades. Even before Ases published his work to the world, investors were profiting from momentum. Uh Richard Dry House was one of the first. He's been called the father of momentum investing. He started his momentum based fund in 1980 and returned 30% per year for 12 years. That's a rate better than Warren Buffett. Or look at uh Ed Seoa, an unknown trader working out of Nevada until he was profiled in Jack Schwagger's book Market Wizards. Over 12 years, he turned $5,000 into 15 million. And he describes his strategy as simply trend following with some special pattern recognition and money management. Uh or take the uh famous example of the turtle traders. Back in the 80s, Richard Dennis was a legendary commodities trader. He wanted to prove that trading could be distilled down to simple rules and that anybody can do it. So he went and he recruited regular people with a newspaper classified ad. The group he recruited included a kitchen worker, a teacher, a Dungeons and Dragons writer, and some blackjack players. Dennis funded their accounts, taught them a simple momentum-based system, had basic rules like, uh, when a commodity hits a 20-day high, you should buy, and when it hits a low, you should sell. And anybody could do it if they followed the momentum. And it turns out the turtles, as they were called, earned an 80% average annual rate of return. Collectively, they made more than $175 million. uh over five years. So the next question I think for an enterprising investor is obvious. How exactly do you measure momentum? Well, I'll tell you it is not that difficult. As this is measure of momentum is dead simple. It's simply the price change over 12 months. If the stock's up over the last year, buy it. If it's down, short it. Repeat enough times, become a billionaire. Um or even if you're a long-term investor, momentum will help you earn money in stocks. So, at Stanbury Research, we do long-term fundamental research on stocks with high-quality businesses. But when my team and I audit our historical track record to learn from our own mistakes, one thing always jumps out. We tend to make missteps when we try to call the bottom and buy stocks that have been beaten down. They they have no momentum and that prevents them from going up. So, the lesson for fundamental investors from momentum, don't try to outsmart the market. Wait until the market starts to agree with you and the trend begins to move in the favor of your investment thesis and pulling out on a macro level. As we continue to hit new highs, every investor from hobbyist to hedge funds fears that they are missing out on a raging bull market. They are going to keep buying so that they don't get left behind. That's exactly how momentum carries stocks higher. So yes, watch for threats, but the momentum of this market has the power to keep things going higher for much longer than you think. Of course, you can dig in deeper into momentum. You can refine your system and you can find even better opportunities. That's precisely what our guest today has done. So Rob Spivey has a background in accounting. Uh but the research he publishes at our corporate affiliate, Alulttimetry, is really about finding the truth in the numbers. and he's even worked uh with Richard Dry House, the father of momentum investing. Um, so I think he's a perfect guest to talk about this. Rob, you know, you you come from accounting. Uh, that's how you tend to look at stocks, but why are you messing around with this momentum stuff? >> Yeah, and Matt, thanks for having me on. Um, it's, you know, as you mentioned, you know, Richard Dhouse was a client of ours. always remember um in the early 2010s when we first started working with him, one of the first companies he ever had us look at was his company, Vipo, VIPs. Um and so VIP shop is a perfect example of momentum investing in how Dree House got it right because Dree House's whole entire philosophy to your point Matt was um it's not buy low and sell high, which is what we're all built in this mantra to do. It's actually buy high and sell higher. And so what he saw with Vitop with VIPS as a ticker and you can go back and look was he basically said, "Hey, this company, which is a Chinese uh a Chinese online retailer that what they sold is call it Gucci, call it um uh Farragamo, call it whatever fashion house two years ago, two two seasons ago, their stuff that was now on discount, it would buy and it would sell to people to be able to buy in in China and elsewhere." And what he saw was first off the price momentum was breaking out. The stock was already on its tear. And secondly, he saw that the fundamentals looked like they were accelerating for the business. And he basically said, "Hey, yeah, I might have missed out on the first 150% of this, but Rob, Joel, right, your team, can you look and tell me again with the accounting um whether or not in our cleanup accounting whether or not this fundamental breakout is real?" And so we did and this is where the alttimeter comes into play because what the alttimeter's goal is and where that whole entire two point Matt that idea of accounting being the background. Accounting is a tool um right that lets you be able to have conviction. It came clear that it was printing money already. And so we said to Richard we said yeah this company is compelling. He ended up jumping in on it. He ended up making more than a 10 beggger on that name again after it had already run 150% plus. And actually, ironically enough, I always remember because, you know, normally when we do research for clients, we don't buy the stock cuz we don't want to make it look like we're misaligned or anything like that. But I always remember being Joel was in person in a meeting and I was dialed in and goes, Joel, you know, you can buy you should buy this too. It's going to work. And so Joel actually bought it and Joel ended up making like a seven beggar on it. And it's learning from people like Richard about that idea of um you know how to use these different investment types that um that really has been the benefit of what we're excit what we love to bring to altimmetry and the reason why we're in we're in momentum right now is because this is the time in this market this market is the exact market where you want to have a momentum tool in your toolkit. >> Yes. So there's a time to use accounting to find value. Then there's a time to just ride the animal spirits of the market. And then there's times where you you can do both, right? You use the accounting to sort of validate. Um which is really uh I mean that sounds really powerful just just hearing it in a few lines. Um but momentum also suggests, you know, forgetting individual stocks. It it suggests this bull run isn't over yet. But I think even aside from momentum, Rob, talking to you, you've got a lot more reasons than just momentum to be bullish, don't you? the fundamental backdrop here. It is a classic fundamental setup that sets up what we call fogy, which is a totally different thing from FOMO. It's the fear of getting in that so many people have an issue in right now. And that is a classic example of what a wall of worry is in the market. I'm sure Matt, I know that you you talk about, you know, basically the risk in the market, everything else. You talk about this idea of the wall of worry that, you know, there's never ever a moment where every news is good news in the market. And if it is, if all the news is good, that's actually probably the moment to sell. But right now, everybody is looking at all these things. They're worried about the consumer. They're worried about inflation. That's holding people on the sideline and it's causing people to misunderstand the fact that right now the US stock market and the US economy are actually on two on two fundamentally different paths. Um and because if you look while that wall of worry is happening for the consumer, what's happening over here is when you look at the companies that are powering this market higher, they're centered on two things, right? They're centered the most biggest thing is obviously the AI boom but the supply chain super cycle boom and what's happening is you are seeing companies that have a wealth of cash flow streaming through their business right the magnificent 7 who are all who are all powering this investment cycle this massive investment cycle that is you know spending what we've gone from the Meg 7 spending $150 billion a year in AI investment to now $350 billion and more that has to use the phrase trickle down economics that has tremendously power for for cons for for their vendors and for throughout the rest of their ecosystem to trickle down and they're on a race that they understand they can't stop and so the AI investment cycle is happening underneath the surface here that's fueling massive amounts of earnings growth throughout this ecosystem and on top of that you've got this environment going on where we structurally in the US have been having this conversation for like three or four years about the idea that we need to redraw supply chains and bring investment back to the United States and what what this administration has done to push with tariffs and everything else has turbocharged that so we've got this other investment cycle going on underneath it. So you've got these two massive investment cycles that are happening for corporations that are unlikely to stop even with the weakness in the consumer. And at the same time, the Fed cutting interest rates, which it did, is the right thing to do because the fact that the consumer is weak and we've got issues with employment. But what they just did by doing that is they effectively poured kerosene on this market, right, in terms of being able to supercharge it. And that's why, you know, we we talk about this idea of, you know, and the reason why we've been talking about momentum is this idea of the doubles anomaly and this thing that we're seeing pop up of, you know, this pattern, which is a which is a specific type of that momentum pattern of idea of how do you find doubles? And it's to your point, Matt, it just happened for the whole entire market because there's a really important thing that happens. And just to give a teaser on it, it's the idea that if we can uncover things that have already doubled, that momentum signal is incredibly powerful. And guess what just doubled, Matt, from the bottom of from basically the bottom of 2022 and from when Chat GBT um was announced. I'll I'll give you I I'll give you a moment to think about it, but I'm not actually going to wait for you to answer. Well, actually, do you want to take a You want to take a stab? >> You're going to say the S&P or the NASDAQ? >> The NASDAQ. You're exactly right. the NASDAQ just is up 103% or something >> which says the market is now following the doubles anomaly not just individual stocks to your point which is why we look at that and that combined with this whole entire setup that we have the wall of worry that explains why people are nervous but this massive investment cycle going on here that the Fed is actually going to enable to be stronger is every reason for us to pound the table and say this is the strategy for now. >> Yeah, I mean that makes total sense. If the market's driven by Google and Microsoft spending on data centers, like they don't care. They're not going to pull back because the consumer is a little weak, right? So those things are going to can keep going on as long as AI keeps showing promise. So So you're saying the broader market has more upside from here, but you were talking about specific stocks that doubled. Like what can you do to better apply momentum to specific stocks and find specific things to buy and and more particular opportunities? This is the idea to your point of the doubles anomaly and what we found which is the idea of when we can combine momentum the idea of identifying companies that are already showing strong price momentum the market is telling you that something's working with those companies and we made it as simple as possible. If the company has already doubled that tells you the market is telling you that something is going right. And then we said, but now look, if you just do that, that basically gives you a coin flip as to whether or not um a company is going to actually double again. But if we overlay uniform accounting on top of that, we overlay our analysis that identifies whether or not a company really actually has the fundamental backdrop behind it, whether or not that company really is profitable, right? Like VIP shop, whether or not that company actually is earning money even though people think it's not. um also whether or not that company really is driving its earnings growth right is a company like coreweave really actually gener able to generate um profitability earnings growth or is it not at all and a company like uh I don't know let's talk about you know somebody as big as Nvidia or Alphabet are they really driving real uniform earnings growth the answer is they are and that kind of signal being able to confirm the price momentum with a real fundamental research and understand what's going on you combine those two things and Matt, it becomes like shooting fish of arrow. It's wild. >> And and it's really that easy to earn d I mean a double is rare for an investor. I had to buy a stock and double my money. You really think it's that easy to find doubles in this kind of market? Well, I mean that's the thing is right when we apply this anomaly, like I said, you this is the wild thing, Matt. It sounds almost an anthemma to say this, but momentum is a phenomenal way to derisk your investment strategy. Um, I know that just makes everybody's hair grow on their on the back of their neck, but the idea is look, if you to your point, Matt, if you basically go out and say, I need to find a stock that can double in the in the in a normal stock picking environment, you're like, I don't know what my probability of that is going to be. But by doing this systematic framework that we have that we've applied to identify momentum strategies, like I said, just identifying stocks that have already doubled in a bull market and buying those stocks all of a sudden significantly derisks, for lack of a better word, your strategy because you're now at a coin flip. You are at a 5050 chance that you actually are going to see another double. And if you just bought >> Let me pause you there. Let me let me interject there, Rob, because a co investor say here's coin flip. That doesn't sound that appealing at first, but that's a coin flip for a double. That's not a coin flip like it'll go up tomorrow or down tomorrow. That's a coin flip to double your money. >> Exactly. Right. Which is I mean you just I mean like who wouldn't want that? But then when we overlay uniform accounting on that, like I said, we we improve the odds to six out of every 10 double. And we get to the point where the average company, if you just bought every single company, um, right? Because not all of them obviously double. Um, but but it just it does doesn't work even with uniform accounting to identify which ones have real earnings growth. Not all of them still double, but we get a 60% hit rate. And if you just bought all of them that uniformly got and confirmed and you held them to the end of the bull market, you'd be up 162% on average. Right. On average. So that includes some of the duds cuz some companies are growing and then don't. And and this is the last part, Matt, that I'll add um because I know that I'm talking your ear off here because this just this gets me excited. um is what we did when we did this analysis is you know it's so often that people do this and you go yeah yeah yeah that's great but you just told me what you would do to the end of the bull market well if the end of the bull market is March 2000 or November 2007 or February 2020 thanks nobody would have told me to sell then so that's not genuine and honest what we did is we went back and one of the things that we and this is again things that we've learned from 20 years of working with the smartest investors in the world and really doing a lot of research is when we can combine real solid macro signals um that are based on our uniform accounting work based on really thoughtful work around credit cycles and um investment cycles, consumer cycles, etc. We and nobody can ever tell you to sell at the top. Just like to your point, Matt, just try to figure out how to buy at the bottom. It's impossible. But we have been able to show over the last I think it's dozen um recessions going back to the 1970s etc. we can pick off within 15% of the market high when the market is over. And that's the best thing that anybody could ever do to you. And what I think Matt you and I were talking about this you've seen our numbers just since the the temper tantrum the tariff tantrum um of liberation day. We've already had 400 companies double this year. 400 companies double this year. So we're in the heart of this right now. So I don't know enough about that, man. I just I can I hope you can see I'm excited about this. So I just I'm happy that I get to talk about it. >> Yeah. I mean I can imagine, you know, sitting there going, gosh, 400 stocks have doubled this year and and you got to go back and count up how many you own because I'm sure people are missing them. And the answer is as simple as look at the stocks that have doubled and then look at the ones with a good business and those are the ones that are going to double again. I mean, it seems so simple. There's a little work to get it done. So that is why Altimemetry is expanding its research to momentum. Rob and his partner Joel Litman built a tool that will point their readers directly to the next set of stocks set to double if you buy them now before the upcoming earning season. So to learn more about this and hear just how powerful momentum can be, visit marketdoubles.com. If you go there, Joel will walk you through the details. Uh Rob's partner Joel is so experienced that he's found himself explaining the state of the world to audiences at Harvard, Wharton, the FBI, and the Pentagon, not to mention his large institutional client base. And at marketdoubles.com, he'll explain how momentum works directly to you. It's incredible stuff. I've checked it all out. It's very compelling. If you're bullish, bearish, however you feel about the market, Alimmetry can show you how to navigate it. So, find out more at marketdoubles.com. uh right now. It'll only be up for a limited time and I'm sure you'll be shocked by some of the opportunities they have found. Rob, thank you so much for joining me. As always, like and subscribe here on YouTube and I will be back next week.
Could Momentum Investing Be Your Secret to Doubling in a Bull Market?
Summary
Transcript
Every investor dreams of finding the secret that drives the market, of discovering that one simple indicator that leads to compounding returns and huge riches. And it is rare, but it actually does happen. Right now, investors need that sort of clarity. And today, I'm going to show you how you can get it. After all, with stocks hitting new highs, investors are conflicted. Have stocks simply ran up too high? Should you be panicking or are you missing out? Uh should you be piling in to take advantage of this bull market? Well, I have the answer for you today. And I know I often use this show to point out risks in the market. But once you understand how markets work, there's a simple rule that you need to follow that suggests you should be invested in stocks today. So, I'm Matt Wein at Stanberry Research and after 20 years studying the market, to me, this is the simplest and most powerful lesson you can learn. And I'm going to tell you all about it today. So, let me start with a story. And it's an unusual story. It's a it's a story about a grad student who wrote a paper on investing and what he discovered led him to become a billionaire. So, this student was at the University of Chicago and he worked under renowned economist Eugene FMA. FMA is a Nobel Prize winner and he earned his fame working on the efficient markets hypothesis. That's says that you can't beat the stock market because it's too random. But this grad student named Cliff Asnes ran into real trouble. He his research completely contradicted that of his mentor and Asnes looked through the data and decided that you could beat the market with here it is momentum. Now, Asnes nervously told FMA, his adviser, that his paper would be pro momentum. And to his credit, FMA said, "If it's in the data, write the paper." So, with that 1994 dissertation, Aznes essentially proved that momentum matters in markets. And that simple insight led him to build AQR Capital Management, which now boasts $120 billion of assets under management. And Asus himself holds a $3 billion fortune of his own. So what is momentum? This magical momentum that drives markets. Well, it simply means that stocks that are going up will continue to go up. It's as simple as that. But in markets, momentum is real. It's not a superstition or it's not voodoo lines drawn on a stock chart. Momentum will tell you which stocks will go up and which will go down. It's been proven time and time again in all sorts of studies and and academic research no longer tests whether momentum works but instead seeks to find out why it's persisted through the decades. It's that established a feature of markets. So momentum is why investors shouldn't get scared out of this market even as it hits new highs. That's the biggest lesson everyone should take from the mathematical history of markets. And like I said, I often use this show to point out things that have me worried. I've talked about tariffs, overhyped AI stocks, threats to the US dollar, the need for defensive holdings, but readers of Stanbury Research know we've been recommending stocks the entire way up. And this is what I consider the proper job of an active investor. You want to be driven by optimism, but tempered with measured skepticism. You need to be optimistic because markets do tend to go up over time. Economies grow, businesses expand, technology gets invented and raises productivity. But when your capital's at risk, you need to spend your time watching for risks without overreacting to them. That is the balance. So you can't ignore the market's momentum. After all, the history of investing is rich with momentum focused traders who have gone on to post incredible returns over multiple decades. Even before Ases published his work to the world, investors were profiting from momentum. Uh Richard Dry House was one of the first. He's been called the father of momentum investing. He started his momentum based fund in 1980 and returned 30% per year for 12 years. That's a rate better than Warren Buffett. Or look at uh Ed Seoa, an unknown trader working out of Nevada until he was profiled in Jack Schwagger's book Market Wizards. Over 12 years, he turned $5,000 into 15 million. And he describes his strategy as simply trend following with some special pattern recognition and money management. Uh or take the uh famous example of the turtle traders. Back in the 80s, Richard Dennis was a legendary commodities trader. He wanted to prove that trading could be distilled down to simple rules and that anybody can do it. So he went and he recruited regular people with a newspaper classified ad. The group he recruited included a kitchen worker, a teacher, a Dungeons and Dragons writer, and some blackjack players. Dennis funded their accounts, taught them a simple momentum-based system, had basic rules like, uh, when a commodity hits a 20-day high, you should buy, and when it hits a low, you should sell. And anybody could do it if they followed the momentum. And it turns out the turtles, as they were called, earned an 80% average annual rate of return. Collectively, they made more than $175 million. uh over five years. So the next question I think for an enterprising investor is obvious. How exactly do you measure momentum? Well, I'll tell you it is not that difficult. As this is measure of momentum is dead simple. It's simply the price change over 12 months. If the stock's up over the last year, buy it. If it's down, short it. Repeat enough times, become a billionaire. Um or even if you're a long-term investor, momentum will help you earn money in stocks. So, at Stanbury Research, we do long-term fundamental research on stocks with high-quality businesses. But when my team and I audit our historical track record to learn from our own mistakes, one thing always jumps out. We tend to make missteps when we try to call the bottom and buy stocks that have been beaten down. They they have no momentum and that prevents them from going up. So, the lesson for fundamental investors from momentum, don't try to outsmart the market. Wait until the market starts to agree with you and the trend begins to move in the favor of your investment thesis and pulling out on a macro level. As we continue to hit new highs, every investor from hobbyist to hedge funds fears that they are missing out on a raging bull market. They are going to keep buying so that they don't get left behind. That's exactly how momentum carries stocks higher. So yes, watch for threats, but the momentum of this market has the power to keep things going higher for much longer than you think. Of course, you can dig in deeper into momentum. You can refine your system and you can find even better opportunities. That's precisely what our guest today has done. So Rob Spivey has a background in accounting. Uh but the research he publishes at our corporate affiliate, Alulttimetry, is really about finding the truth in the numbers. and he's even worked uh with Richard Dry House, the father of momentum investing. Um, so I think he's a perfect guest to talk about this. Rob, you know, you you come from accounting. Uh, that's how you tend to look at stocks, but why are you messing around with this momentum stuff? >> Yeah, and Matt, thanks for having me on. Um, it's, you know, as you mentioned, you know, Richard Dhouse was a client of ours. always remember um in the early 2010s when we first started working with him, one of the first companies he ever had us look at was his company, Vipo, VIPs. Um and so VIP shop is a perfect example of momentum investing in how Dree House got it right because Dree House's whole entire philosophy to your point Matt was um it's not buy low and sell high, which is what we're all built in this mantra to do. It's actually buy high and sell higher. And so what he saw with Vitop with VIPS as a ticker and you can go back and look was he basically said, "Hey, this company, which is a Chinese uh a Chinese online retailer that what they sold is call it Gucci, call it um uh Farragamo, call it whatever fashion house two years ago, two two seasons ago, their stuff that was now on discount, it would buy and it would sell to people to be able to buy in in China and elsewhere." And what he saw was first off the price momentum was breaking out. The stock was already on its tear. And secondly, he saw that the fundamentals looked like they were accelerating for the business. And he basically said, "Hey, yeah, I might have missed out on the first 150% of this, but Rob, Joel, right, your team, can you look and tell me again with the accounting um whether or not in our cleanup accounting whether or not this fundamental breakout is real?" And so we did and this is where the alttimeter comes into play because what the alttimeter's goal is and where that whole entire two point Matt that idea of accounting being the background. Accounting is a tool um right that lets you be able to have conviction. It came clear that it was printing money already. And so we said to Richard we said yeah this company is compelling. He ended up jumping in on it. He ended up making more than a 10 beggger on that name again after it had already run 150% plus. And actually, ironically enough, I always remember because, you know, normally when we do research for clients, we don't buy the stock cuz we don't want to make it look like we're misaligned or anything like that. But I always remember being Joel was in person in a meeting and I was dialed in and goes, Joel, you know, you can buy you should buy this too. It's going to work. And so Joel actually bought it and Joel ended up making like a seven beggar on it. And it's learning from people like Richard about that idea of um you know how to use these different investment types that um that really has been the benefit of what we're excit what we love to bring to altimmetry and the reason why we're in we're in momentum right now is because this is the time in this market this market is the exact market where you want to have a momentum tool in your toolkit. >> Yes. So there's a time to use accounting to find value. Then there's a time to just ride the animal spirits of the market. And then there's times where you you can do both, right? You use the accounting to sort of validate. Um which is really uh I mean that sounds really powerful just just hearing it in a few lines. Um but momentum also suggests, you know, forgetting individual stocks. It it suggests this bull run isn't over yet. But I think even aside from momentum, Rob, talking to you, you've got a lot more reasons than just momentum to be bullish, don't you? the fundamental backdrop here. It is a classic fundamental setup that sets up what we call fogy, which is a totally different thing from FOMO. It's the fear of getting in that so many people have an issue in right now. And that is a classic example of what a wall of worry is in the market. I'm sure Matt, I know that you you talk about, you know, basically the risk in the market, everything else. You talk about this idea of the wall of worry that, you know, there's never ever a moment where every news is good news in the market. And if it is, if all the news is good, that's actually probably the moment to sell. But right now, everybody is looking at all these things. They're worried about the consumer. They're worried about inflation. That's holding people on the sideline and it's causing people to misunderstand the fact that right now the US stock market and the US economy are actually on two on two fundamentally different paths. Um and because if you look while that wall of worry is happening for the consumer, what's happening over here is when you look at the companies that are powering this market higher, they're centered on two things, right? They're centered the most biggest thing is obviously the AI boom but the supply chain super cycle boom and what's happening is you are seeing companies that have a wealth of cash flow streaming through their business right the magnificent 7 who are all who are all powering this investment cycle this massive investment cycle that is you know spending what we've gone from the Meg 7 spending $150 billion a year in AI investment to now $350 billion and more that has to use the phrase trickle down economics that has tremendously power for for cons for for their vendors and for throughout the rest of their ecosystem to trickle down and they're on a race that they understand they can't stop and so the AI investment cycle is happening underneath the surface here that's fueling massive amounts of earnings growth throughout this ecosystem and on top of that you've got this environment going on where we structurally in the US have been having this conversation for like three or four years about the idea that we need to redraw supply chains and bring investment back to the United States and what what this administration has done to push with tariffs and everything else has turbocharged that so we've got this other investment cycle going on underneath it. So you've got these two massive investment cycles that are happening for corporations that are unlikely to stop even with the weakness in the consumer. And at the same time, the Fed cutting interest rates, which it did, is the right thing to do because the fact that the consumer is weak and we've got issues with employment. But what they just did by doing that is they effectively poured kerosene on this market, right, in terms of being able to supercharge it. And that's why, you know, we we talk about this idea of, you know, and the reason why we've been talking about momentum is this idea of the doubles anomaly and this thing that we're seeing pop up of, you know, this pattern, which is a which is a specific type of that momentum pattern of idea of how do you find doubles? And it's to your point, Matt, it just happened for the whole entire market because there's a really important thing that happens. And just to give a teaser on it, it's the idea that if we can uncover things that have already doubled, that momentum signal is incredibly powerful. And guess what just doubled, Matt, from the bottom of from basically the bottom of 2022 and from when Chat GBT um was announced. I'll I'll give you I I'll give you a moment to think about it, but I'm not actually going to wait for you to answer. Well, actually, do you want to take a You want to take a stab? >> You're going to say the S&P or the NASDAQ? >> The NASDAQ. You're exactly right. the NASDAQ just is up 103% or something >> which says the market is now following the doubles anomaly not just individual stocks to your point which is why we look at that and that combined with this whole entire setup that we have the wall of worry that explains why people are nervous but this massive investment cycle going on here that the Fed is actually going to enable to be stronger is every reason for us to pound the table and say this is the strategy for now. >> Yeah, I mean that makes total sense. If the market's driven by Google and Microsoft spending on data centers, like they don't care. They're not going to pull back because the consumer is a little weak, right? So those things are going to can keep going on as long as AI keeps showing promise. So So you're saying the broader market has more upside from here, but you were talking about specific stocks that doubled. Like what can you do to better apply momentum to specific stocks and find specific things to buy and and more particular opportunities? This is the idea to your point of the doubles anomaly and what we found which is the idea of when we can combine momentum the idea of identifying companies that are already showing strong price momentum the market is telling you that something's working with those companies and we made it as simple as possible. If the company has already doubled that tells you the market is telling you that something is going right. And then we said, but now look, if you just do that, that basically gives you a coin flip as to whether or not um a company is going to actually double again. But if we overlay uniform accounting on top of that, we overlay our analysis that identifies whether or not a company really actually has the fundamental backdrop behind it, whether or not that company really is profitable, right? Like VIP shop, whether or not that company actually is earning money even though people think it's not. um also whether or not that company really is driving its earnings growth right is a company like coreweave really actually gener able to generate um profitability earnings growth or is it not at all and a company like uh I don't know let's talk about you know somebody as big as Nvidia or Alphabet are they really driving real uniform earnings growth the answer is they are and that kind of signal being able to confirm the price momentum with a real fundamental research and understand what's going on you combine those two things and Matt, it becomes like shooting fish of arrow. It's wild. >> And and it's really that easy to earn d I mean a double is rare for an investor. I had to buy a stock and double my money. You really think it's that easy to find doubles in this kind of market? Well, I mean that's the thing is right when we apply this anomaly, like I said, you this is the wild thing, Matt. It sounds almost an anthemma to say this, but momentum is a phenomenal way to derisk your investment strategy. Um, I know that just makes everybody's hair grow on their on the back of their neck, but the idea is look, if you to your point, Matt, if you basically go out and say, I need to find a stock that can double in the in the in a normal stock picking environment, you're like, I don't know what my probability of that is going to be. But by doing this systematic framework that we have that we've applied to identify momentum strategies, like I said, just identifying stocks that have already doubled in a bull market and buying those stocks all of a sudden significantly derisks, for lack of a better word, your strategy because you're now at a coin flip. You are at a 5050 chance that you actually are going to see another double. And if you just bought >> Let me pause you there. Let me let me interject there, Rob, because a co investor say here's coin flip. That doesn't sound that appealing at first, but that's a coin flip for a double. That's not a coin flip like it'll go up tomorrow or down tomorrow. That's a coin flip to double your money. >> Exactly. Right. Which is I mean you just I mean like who wouldn't want that? But then when we overlay uniform accounting on that, like I said, we we improve the odds to six out of every 10 double. And we get to the point where the average company, if you just bought every single company, um, right? Because not all of them obviously double. Um, but but it just it does doesn't work even with uniform accounting to identify which ones have real earnings growth. Not all of them still double, but we get a 60% hit rate. And if you just bought all of them that uniformly got and confirmed and you held them to the end of the bull market, you'd be up 162% on average. Right. On average. So that includes some of the duds cuz some companies are growing and then don't. And and this is the last part, Matt, that I'll add um because I know that I'm talking your ear off here because this just this gets me excited. um is what we did when we did this analysis is you know it's so often that people do this and you go yeah yeah yeah that's great but you just told me what you would do to the end of the bull market well if the end of the bull market is March 2000 or November 2007 or February 2020 thanks nobody would have told me to sell then so that's not genuine and honest what we did is we went back and one of the things that we and this is again things that we've learned from 20 years of working with the smartest investors in the world and really doing a lot of research is when we can combine real solid macro signals um that are based on our uniform accounting work based on really thoughtful work around credit cycles and um investment cycles, consumer cycles, etc. We and nobody can ever tell you to sell at the top. Just like to your point, Matt, just try to figure out how to buy at the bottom. It's impossible. But we have been able to show over the last I think it's dozen um recessions going back to the 1970s etc. we can pick off within 15% of the market high when the market is over. And that's the best thing that anybody could ever do to you. And what I think Matt you and I were talking about this you've seen our numbers just since the the temper tantrum the tariff tantrum um of liberation day. We've already had 400 companies double this year. 400 companies double this year. So we're in the heart of this right now. So I don't know enough about that, man. I just I can I hope you can see I'm excited about this. So I just I'm happy that I get to talk about it. >> Yeah. I mean I can imagine, you know, sitting there going, gosh, 400 stocks have doubled this year and and you got to go back and count up how many you own because I'm sure people are missing them. And the answer is as simple as look at the stocks that have doubled and then look at the ones with a good business and those are the ones that are going to double again. I mean, it seems so simple. There's a little work to get it done. So that is why Altimemetry is expanding its research to momentum. Rob and his partner Joel Litman built a tool that will point their readers directly to the next set of stocks set to double if you buy them now before the upcoming earning season. So to learn more about this and hear just how powerful momentum can be, visit marketdoubles.com. If you go there, Joel will walk you through the details. Uh Rob's partner Joel is so experienced that he's found himself explaining the state of the world to audiences at Harvard, Wharton, the FBI, and the Pentagon, not to mention his large institutional client base. And at marketdoubles.com, he'll explain how momentum works directly to you. It's incredible stuff. I've checked it all out. It's very compelling. If you're bullish, bearish, however you feel about the market, Alimmetry can show you how to navigate it. So, find out more at marketdoubles.com. uh right now. It'll only be up for a limited time and I'm sure you'll be shocked by some of the opportunities they have found. Rob, thank you so much for joining me. As always, like and subscribe here on YouTube and I will be back next week.