Sjuggerud: How we used ‘Magic Numbers’ to make 582% in less than 4 years
From Dr. Steve Sjuggerud, Editor, True Wealth Systems:
You may think the idea of a Magic Number for investing is crazy… But we’ve used them in True Wealth Systems to produce gains of 582%.
We made these enormous gains by investing in the biotech sector… a sector that is known for volatility. And one that can lead to crushing losses if you buy at the wrong time.
Fortunately, the Magic Numbers tell us when to buy. And in case we buy on a “false start,” they will tell us to sell quickly, for only a small loss.
Again, the Magic Numbers tell us when to buy. But I have to admit, it’s not the only thing I look for when investing…
I look for three things when I make an investment. I want it to be 1) cheap, 2) hated or ignored, and 3) in an uptrend.
The Magic Numbers that are the basis for TWS look mostly at the uptrend. This tells us where a stock is going – and tells us when to buy. But I always prefer investments that are cheap and hated in addition to having a Magic Number “buy” signal.
These things don’t come together often. But history shows that the biggest gains happen when all three criteria come together.
That’s exactly what happened in the case of biotech… The sector was cheap and hated, and our Magic Numbers gave us a buy signal when they saw an uptrend.
Biotech stocks peaked in the dot-com bubble. After the crash, they went nowhere for years. But by 2012, they had become incredibly cheap.
We first bought in early 2012, slightly after the biotech sector’s price-to-sales (P/S) ratio bottomed. Take a look…
Biotech stocks peaked at a P/S ratio of over 20 after the dot-com bubble. We bought for well over 50% less than that price in 2012. Biotech stocks were cheap compared with their own history.
Similarly, no one was paying attention to them. When we first bought in 2012, the fund we bought was up 35% in just a few months… But no one cared.
Biotech stocks weren’t in the newspapers. CNBC wasn’t dedicating prime coverage to biotech. No one was interested.
When investors hate or ignore an asset, and it increases anyway, it’s almost always a good sign. Eventually, investors will notice the performance and dive in to get a piece of the action… And they’ll push prices even higher in the process.
We got in before the rush – when no one was talking about biotech stocks, even though they were soaring.
Of course, this wouldn’t have mattered if we didn’t have our Magic Numbers. They told us that the new uptrend was in place – and that biotech stocks were set to absolutely soar.
Not only that, but biotech stocks had just staged a massive long-term breakout in prices. Take a look…
Our Magic Numbers said “buy,” so that’s exactly what we did in TWS. And we did it a special way…
You see, our Magic Numbers are so accurate that they give me incredible confidence. I know they only flash “buy” at the best times… So I don’t mind buying a volatile sector like biotech with leverage.
In this case, we bought a twice-leveraged biotech fund – the ProShares Ultra Nasdaq Biotechnology Fund (BIB).
Our Magic Numbers stayed in “buy” mode for the next 10 months. But eventually, things changed. Our Magic Numbers told us to sell, and we closed the trade for a 56% gain in just 10 months.
This was a great investment. But we were just getting started. This was simply a “false start” in the biotech sector…
A month later, our Magic Numbers told us to buy biotech stocks once again. Based on this incredibly powerful indicator, the major move was NOT over yet.
Most investors would be scared to buy back in to a trade a month after locking in a 56% gain. But our Magic Numbers knew better. Importantly, the Magic Numbers had seen similar conditions in biotech stocks… all the way back in the 1980s.
The chart below told us everything we needed to know…
As you can see, during the biggest biotech run in history, our Magic Numbers would have had multiple “false starts” along the way. (Green means our Magic Numbers say “buy,” and red means our Magic Numbers say “sell.”)
So instead of worrying about whether we should buy biotech again, we dove right back in to the trade.
Our Magic Numbers were right again… We held until our Magic Numbers told us it was time to sell, closing the trade in April 2014 for a 184% gain.
These were two incredible gains. But our Magic Numbers said the upside in biotech wasn’t over yet. A few months later, they said to buy the sector once again. And in October 2014, we bought BIB for the third time.
This was the third-biggest winner in biotech stocks for our Magic Numbers. We stayed in the trade for 11 months before our Magic Numbers said it was time to sell. We closed the trade for a 54% gain.
What’s incredible is the “stacked” return for these three trades. They earned gains of 56%, 184%, and 54% individually. But if you’d taken your first-trade gains and invested them into the second – and done the same with the third trade – the total “stacked” gain would be 582%!
That’s an unbelievable return. And it was all thanks to knowing the Magic Numbers for the biotech sector.
In total, this 582% “stacked” return took under four years. And an investment of $10,000 could have turned into $68,200. Fantastic!
What’s great is that we can find opportunities like this over and over again – thanks to Magic Numbers.
We’ve analyzed all of the data for the biotech sector, and that allowed us to find the sector’s Magic Numbers. And we’ve done this for dozens of other sectors as well.
We know the Magic Numbers to invest in sectors and markets all across the globe.
This is exactly what we do every month in TWS. Our computers monitor Magic Numbers for dozens of assets… and tell us the exact right time to own each investment we track.
Crux note: Steve’s “Magic Numbers” show you the EXACT MOMENT to buy stocks and other assets for triple-digit gains. And right now, Steve tells us that they’re signaling a massive opportunity in gold and silver. Steve just put together a brand-new presentation detailing this incredible opportunity. Watch it here.