Building Wealth As a broke ice cream truck driver, Michael Larson needed a change of luck...
And that's exactly what he got – at least briefly.
In the early 1980s, Larson couldn't keep a steady job. He spent most of his days driving a Mister Softee ice cream truck around southwest Ohio, trying to make ends meet.
At night, he would settle onto the couch at his home in Lebanon, Ohio, to watch infomercials and his newfound love... game shows. In fact, he was quite addicted. As Larson's common-law wife, Teresa McGlynn, recalled to This American Life years later...
Michael was so obsessed with his game shows and his televisions... We had an entire wall full of 19-inch, 25-inch televisions. And he would watch them all at once.
In September 1983, a new game show called Press Your Luck debuted...
A large, colorful gameboard made up of 18 separate boxes would light up randomly. Each box flashed either a prize or a "Whammy" – a cartoon character who reset the player's score to zero. Prizes included money, vacations, and even luxury goods like cars and boats.
Three players would take turns pressing their game button to stop the light. Wherever the light stopped determined the prize. Like many game shows, it was played in two rounds.
Larson liked the show... It looked easy, and people were winning money. He could use the cash. And even better, after watching many episodes, he made a critical observation...
The random blinking boxes weren't random at all. They followed one of five patterns...
Larson began recording the Press Your Luck episodes on his VCR so he could study the patterns more closely. For 18 hours a day, he would sit on his couch watching the replays.
He would follow the five different patterns... carefully noting which boxes contained the best prizes and when they would blink. Eventually, he could hit his "imaginary game button" at just the right time that the next light to blink would always be a square with a big prize.
Larson was ready to take his act to the real stage. And in June 1984, he got his chance...
Larson headed to the studio in Los Angeles wearing a cheap suit jacket and a 65-cent thrift-store shirt...
His appearance started off on the wrong foot, though... Larson hit a Whammy on his first spin. And he finished the first round in last place, sitting on only $2,500 in winnings.
But in the second round, all of Larson's hard work and hours of research paid off...
Once he controlled the board, Larson went 44 straight turns without hitting a Whammy. He took 47 spins overall, winning $110,237 in prizes – including cash, trips to Hawaii and the Bahamas, and a sailboat. It was the most winnings in game-show history to that point. (If you can spare 10 minutes, watch Larson's incredible run on YouTube right here.)
However, not everyone enjoyed watching Larson rack up the incredible gains...
CBS immediately accused Larson of cheating and threatened not to pay him. However, the producers couldn't find a reason to disqualify him... because he didn't break any rules.
Larson did nothing wrong. He simply learned the game better than anyone else. He conducted hours of research... noted the repetitive patterns... and used them to win.
Similar techniques can give analysts a leg up when it comes to equity research, too...
I spent nearly two decades on Wall Street before joining Stansberry Research. Specifically, I served as a "sell-side analyst."
Similar to Larson, in my role, I spent countless hours evaluating hundreds of companies for my big-money clients... I was looking to gain an edge that would help them make money.
Like Larson, analysts look for patterns in charts and leading indicators across financial statements. Depending on the industry, regular announcements might repeat, too.
That's especially true in the health care sector...
As a health care services analyst for many years, my team and I digested as much data as possible. We focused on the reports that moved stock prices the most – both up and down.
And each year, several health care calendar items repeated that could be traded. For example...
- National health expenditures are released annually in December, offering a macro view of health care utilization and spending. These numbers inform the following-year financials at health care providers, such as hospitals.
- Medicare inpatient payment changes come out in late April each year. They're changes to how hospitals will get paid, beginning on October 1 of the same year. Since Medicare is a big customer for most hospitals, these data are very important.
- Health insurance pricing decisions are estimated in September and October for the following year. This information provides analysts with a window into the expected revenue growth for managed care organizations.
- The American Society of Clinical Oncology holds its annual conference in late May or early June. Cancer-fighting clinicians present their results from studies and other information that impact many pharmaceutical and biotech companies.
It's the same story today. These types of calendar items – and many others – influence health care firms' operations across the board... and more important, their stock prices.
Of course, this is just the start of finding the best investments in the health care industry.
The rules of the industry are constantly shifting and changing. But if you know how to keep up with it all, if could lead you to generating big profits for yourself...
Best regards,
Thomas Carroll
Editor's note: Tomorrow, Doc is stepping forward to share the biggest investment opportunity he's seen in 40 years. He expects 1,000%-plus gains that have nothing to do with options... crypto... or any kind of trading "system" that sucks up all your time.
Instead... it involves a jaw-dropping revolution in one of the biggest and most important economic sectors in the world.