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Wednesday, March 19, 2014 - 11:30
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Wednesday, March 19, 2014 - 11:30

4 Keys To Spotting Triple-Digit Gainers... Before They Take Off

Wednesday, March 19, 2014 - 11:30am

Mark Twain understood the mind of an investor.

The world-renowned author once proclaimed: "A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way."

Twain acknowledged the rush that can accompany earning money without any labor. He understood that the human brain is not wired for clear thinking in regard to money. That's because the area of the brain that responds to financial reward is the same part that lights up from cocaine.

This presents a major problem.

Investors become insatiable, searching high and low for the next "big winners." What they're really interested in is a get-rich-quick scheme.

That's a terrific way to lose money -- and quickly.

However, if you are a regular reader of my Game-Changing Stocks newsletter, then you know that I have been making the habit of finding stocks with the most "big winner" potential into a science for a while.

Take electric car maker Tesla (Nasdaq: TSLA) for example.

On Dec. 20, 2010, I first profiled and recommended the company to my readers. Since then, it has become one of the most hotly-debated and controversial stocks on the market.

But more importantly, it has gained 397%.

I don't remind readers of this to brag. I simply want to point out that there are methods to finding companies that are going to be game-changers before they take off, without having to resort to a "get rich quick" mentality.

In fact, one way I find possible game-changers is by screening for four categories. The more categories an up-and-comer fits into, the higher its potential...

New Products
This group of game-changers makes the Crocs, iPads and GPS systems of the world. They aren't exclusively original concepts. They may make slight improvements on products in the market, or just revamp them altogether.

Government Action
New laws or regulations often open up the door for game-changing markets. For instance, the legalization of marijuana in certain states will create a new sector of the market with no track record and plenty of customers.

New Technology
These game-changers generally lead to unexplored territory. Hydraulic fracturing, or "fracking," constitutes a game-changing technology because it doesn't just create new products for consumers -- it creates a new way of producing them.

Broad-Based Trends
These game-changers are found in markets involved with cultural waves, like the recent move to organic food or text messaging.

Combine two or more of these tailwinds, and the game-changer's impact increases. Mix all four, and they produce the financial equivalent of an F5 tornado -- gargantuan, powerful, inescapable and unremitting.

For example, when I recommended in-flight Internet provider Gogo (Nasdaq: GOGO), to my Game-Changing Stocks readers on July 15 last year, the company fell under three of my game-changer categories.

First, the Wall Street Journal had recently published a dispatch claiming that the Federal Aviation Administration was expected to relax rules on in-flight use of personal electronics. And knowing that Gogo had long-term contracts with Delta Air Lines, American Airlines, US Airways and Alaska Airlines, I realized that it could very likely take advantage of this recent government action.

Gogo was also certainly sitting on new technology. Providing wifi services to travelers thousands of feet in the air isn't something that's been going on for very long.

And to top it all off, the company also took advantage of a new product market. With devices like smartphones and tablet computers becoming commonplace, it was virtually assured that many passengers would want to use the company's in-flight Internet to connect during long trips.

I recommended Gogo on July 15 at $14 per share, and by Dec. 4 the stock had reached a price of $34.34 -- a 145% gain in less than 5 months. Meanwhile, the S&P 500 gained just 6.5%.

That's the power of taking a rational approach to finding companies that are going to revolutionize their industry before their stocks have taken off.

The ordinary media doesn't cover this beat. They'll tell you all about a discovery once it comes out -- but they don't look ahead to see where the next one is coming from.

That's why I spend 60 hours a week poring over a multitude of newspapers and financial journals. My smartphone is crammed with the names of CEOs, brokers, bankers and other heavy hitters, and I talk to them every day. Once I've collected a mountain of data from all these sources, I distill it into a single idea and present it in Game-Changing Stocks.

The next game-changer is always just around the corner, and someone is going to profit from it. If you can avoid the "get rich quick" mentality and take an approach similar to what I outlined above, there's no reason why you can't, too.

To get you started, I've released a new report that outlines several "game-changing" trends with the potential to revolutionize the way we live our lives -- and make investors a killing in the months to come. In the past, my predictions led to returns of 291%... 340%... even 390%. To learn more about this latest research, follow this link.

Andy Obermueller does not personally hold positions in any securities mentioned in this article.
StreetAuthority LLC does not hold positions in any securities mentioned in this article.