They were crushing us.

I was in college, competing in a stock market challenge game.

One team, which I’ll call Team X, just surged way ahead of the rest of us — jumping 10% overnight. The rest of the teams were moving 1% a day.

The big move for the leading team came after a wild bet on earnings — they went all-in on Google.

The company crushed earnings expectations and soared over 10%. Team X captured the entire move. It wasn’t a smart money bet.

The rest of the teams, including mine, spent the last two months taking too much risk. In our attempts to catch them, we took similar bets on other companies’ earnings.

When our bets failed, Google’s big jump ended up being enough for Team X to win the classroom competition.

But none of us were investing then. We were just trying to gamble on the next big price move on an earnings announcement.

It’s easy to get caught in this trap. After all, there are plenty of companies that do what Google did back in my college days and soar 10% on the results.

However, just as many plunge 10% on poor earnings.

This upcoming earnings season is sure to be filled with more big moves, but don’t get caught placing bets. There’s a better way to profit…

If You Missed January’s Rally, Wait for the Earnings Report

An earnings drift is why I never have to gamble on a stock’s earnings again.

I know many of you missed out on the rally over the past two months. Fund flows in December showed a mass exodus from the stock market, especially individual investors.

Since the market bottomed on December 24 last year, the S&P 500 Index has rallied 15%.

This is massive.

And right now, you are seeing other investors brag about riding this tumultuous downturn back to a reasonable level.

Even Goldman Sachs said that if you missed the January rally, you likely missed the 2019 gains. They are probably right.

The average annual return for the S&P 500 is just 10%. Some years, it will be above that. Other years, it will be below.

But after starting off with a strong rally like this, the gains for the rest of the year will likely be subdued.

This isn’t a good time to play catch-up.

So far this year, returns have outperformed on earnings.

Through earnings season so far, the average one-day move after earnings is more than 1% — the largest it has been since 2009.

The lowered expectations heading into the quarter have set up this start-of-the-year rally.

But betting on earnings going forward isn’t the way to catch up. That puts you in a trap of taking more and more risks, like I did back in that college stock market challenge.

You always want to be comfortable and confident with your investments, but betting on earnings going forward is a sure way to lose money.

Instead of gambling on an earnings report, there is a more profitable strategy: Buy after a company reports earnings.

It’s not only more consistent, but there is less risk as the volatile earnings event is now behind us.

This System Yielded 200% Cumulative Gains in the Past Month

The earnings drift concept is supported by years of scientific studies that prove there is a noticeable drift after a company reports earnings. They found it on a broad scale, impacting the majority of stocks.

My angle on this concept is a bit more in-depth.

The earnings drift concept works because it is based on the fact that earnings, which occur four times a year, are the single most important event for a stock, until the next earnings season.

Therefore, the earnings results set the stage for the stock’s direction over the next two months.

Of course, investing is never black and white.

There are other factors that affect stocks after every earnings, and not every stock sees a drift pattern.

That’s where my detailed approach in Quick Hit Profits comes into play.

I have identified fewer than 100 stocks with proven drift patterns that allow us to lock in profits each and every quarter — without actually betting on the earnings report.

I’ve followed the drift patterns for nearly three years and have gone back over a decade with back testing to perfect the system.

In the past month alone, readers have snagged two quick 50% gains and a 100% gain.

Our latest trades are set up to bring in even more gains.

As you can see, we are still making sizable returns.

Granted, we make these returns by buying options, not the stock itself.

But the drift patterns hold many double-digit stock market gains.

Options allow us to earn a multiple of that return over the same time period.

This is the smart way to trade earnings season.

Jumping in before earnings is nothing more than a gamble in the stock market — you’ll win some, but in the long run, the market always wins.

Regards,

Chad Shoop, CMT

Editor, Automatic Profits Alert