Is the 1,000% Divergence Window Legit? (Early Stage Investor)

I recently received an email from InvestorPlace about a “1,000% Divergence Window” that led me to a presentation featuring Luke Lango and Louis Navellier.

What’s it about? According to the presentation, the Divergence Window is a “rare stock market pattern with the potential to produce 1,000% gains.”

This has supposedly only happened three times in history. And now, in 2022, Lango says it’s happening again, for the first time in 14 years, which could lead to epic gains.

Here’s what Lango said to host Paul Ghiringhelli:

“The fact is, Paul, we could be on the cusp of the greatest wealth building opportunity we’ve seen in the stock market in fourteen years.

And I’m not just blowing hot air here.

All the research. All the analysis. All of the math I’ve done strongly backs that claim. I believe it down to my core.

A window of opportunity just opened that could give mainstreet investors the chance to…

Make 200% gains within the next twelve months…

1,500% within the next five years…

And as much as 5,000% or more within the next decade.

We’re talking about a true potential ‘millionaire-maker’ event… and most people have absolutely no idea it’s happening.”

Is it legit?

The presentation is designed to sell Early Stage Investor, a $1,799 per year service where Lango reveals his top “divergence window” stock picks.

And since nobody can predict the future, there’s no guarantee you’ll make money from this so-called “divergence window,” let alone 10x potential gains, as Luke Lango suggests.

However, Lango has picked numerous 1,000% plus stocks over the years, so it wouldn’t surprise me if he was onto something.

Let’s take a closer look at what he’s predicting.

What Is the 1,000% Divergence Window?

The InvestorPlace presentation describes the 1,000% Divergence Window as a “rare stock market pattern” that could hand investors significant potential gains.

“A rare stock market pattern with the potential to produce 1,000% gains…

We call it a ‘Divergence Window’ and it’s only happened 3 times in the history of the stock market.

Each time it’s handed Main Street investors the chance to turn a modest stake into as much as 7-figures over time…”

And according to Luke Lango, this “window” has just opened again for the first time in 14 years. So he and his team of analysts have supposedly been working around the clock since they came to the conclusion that it’s “open” to find the best stocks to share.

“Truth be told, most of us have been awake for over 36 hours since we came to the conclusion that this window is, indeed, now open.

Actually, the entire team is in the office as we speak working on this…

Right this very moment, I have three of my top analysts finishing up our research on the best stocks to buy immediately to take advantage of this opportunity in one of the conference rooms right upstairs.”

I don’t know about you, but I’ve never heard of a divergence window. But according to Luke Lango, “backtested gains” show that the last time this window opened up, numerous triple-digit gains occurred.

What’s more, money management professional Louis Navellier joined the presentation and said that some of his biggest gains have happened as a result of this divergence.

“I didn’t know it until I looked over Luke’s research…

But some of my greatest picks I’ve ever made happened during one of these divergence windows.

I’m talking about stocks like Nike, Home Depot and Apple that have gone up as much as 30,000% over time.”

When was the last time this happened?

According to Lango, the divergence window has happened three times in the last 35 years; in 1988, 2000, and 2008 (all of which experienced bearish downtrends).

“In total, this ‘divergence window’ has happened three times over the past 35 years.

Once during the savings and loan crisis in 1988…

Once during the dot com crash of 2000…

And once during the housing bubble of 2008…”

It’s no secret that there’s a lot of bearish sentiment in the market right now.

Most stocks are down, there’s fear of interest rate hikes, and there are economic uncertainties (to name a few).

But that’s the general idea with Lango’s “divergence window” pitch… that the best gains have happened (and could happen) during times of peak fear and volatility.

“A lot of people are terrified, because they think the bull run is finally over.

But, where most folks see volatility, I see opportunity.

Actually, I don’t just look at today’s market volatility and see an opportunity — I see a HUGE opportunity.

I’m talking about a potential 1,000% divergence window.

Yup. You heard that right.

While the talking heads in financial media may be telling you that the end of the bull market is near — which, of course, they’re going to tell you, because fear sells — it gets clicks — while they’re saying the end is near, I’m saying you have an opportunity to make 1,000% your money.”

To sum it up, the presentation described the Divergence Window as a “window” of opportunity that occurs after the market drops and certain stocks rally significantly higher thereafter. Or, as Lango puts it, the stocks “snap back.”

That’s the general idea, anyway.

And while all of this may sound good in theory, how does it (actually) work?

Let’s take a look.

How Does the Divergence Window Work?

As mentioned, divergence windows supposedly happen right after stocks fall. However, according to Luke Lango, the way these “divergences” work is less about the crash itself and more about the mentality of investors.

“These windows aren’t about the crashes themselves…

They’re about the mentality of investors. They’re about uncertainty and fear.

Every time a crash happens, people get scared and start acting irrationally.

It’s just human nature.”

Long story short, Luke Lango says that the market always comes back to its senses eventually, but there is always a “moment in time following crashes” where markets remain “suspended in irrationality,” which is what creates these divergence windows.

“Eventually, the market always comes around to its senses.

Rationality always returns to the markets. But there is always this moment in time following crashes wherein the markets remain suspended in irrationality.

Those moments create these very divergence windows, where you can make a lot of money by simply staying rational while everyone else becomes suddenly irrational.”

How does he know this, though?

I mean, it’s one thing to “buy the dip” when stocks have fallen, and there’s fear in the market, but how does Luke Lango know when it’s the right time to buy?

Well, that’s supposedly where his “proprietary signal” comes into play. In short, Lango claims that this indicator helps him identify a stock’s “true” price.

In the presentation, he shared numerous charts of stocks that have fallen in price while the “true stock price” (AKA his indicator) has continued upward, creating a divergence between the two.

“You see that line on top?

That’s what my team and I call the TRUE stock price.

It represents what we think a stock SHOULD be trading for based on the proprietary indicator we created.

In other words, it represents what a stock should be trading for if the market was acting rationally.”

He likens the two lines to a rubber band and suggests that once the “true” price strays from the actual stock price by more than “40 points,” it “snaps back.”

“For now, imagine these two lines are joined together by an invisible rubber band.

What we’ve discovered is that as soon as the market price strays at least 40 points away from the true price according to our indicator, it snaps back…

And, subsequently, the underlying momentum causes the stock to explode even higher, and higher, and higher over time.”

I was curious what he meant by 40 “points,” so I kept on digging.

In short, Lango said that this is a “proprietary numeric value” that he and his team have assigned to each stock they looked at.

According to Lango, the higher this number is, the greater the distance between the “true” and actual stock price and the bigger the potential returns.

“What we found was that stocks whose Divergence values scored 40 or higher always produced the best results… and the bigger the divergence value, the bigger the returns.”

As for how that “proprietary signal” and “proprietary numeric value” work, nobody can say other than Luke Lango himself and those he shares it with.

On the one hand, I can understand why some trading signals are proprietary, especially if they’re as good as Luke Lango suggests. But on the other hand, this makes it virtually impossible to evaluate properly because the details aren’t publicly available.

That said, Luke Lango did elaborate on three different time horizons his strategy is based around, which he refers to as three distinct “phases.”

Here’s an overview of each phase:

• Phase 1 (“Snap-Back Phase”): Luke Lango says this phase of the divergence window is “perfect for those looking for the chance for short term stock bursts.” And he provided what appear to be back-tested “divergence window” stocks that saw between 28% and 195% gains within this phase, which the presentation suggests is around 12 months long.
• Phase 2 (“Hypergrowth Phase”): According to Lango, the Hypergrowth Phase is where you have the chance to turn a $10,000 to $20,000 stake into “sometimes up to hundreds of thousands of dollars over the next few years.”
• Phase 3 (“Legacy Phase”): In the presentation, Luke Lango said that, based on his back-tested research, the average returns from the “legacy phase” of the three divergence windows discussed in the presentation was 21,930%. And he suggests that the hold time for stocks in this phase is over a decade.

So, that pretty much sums up what I was able to learn about Luke Lango’s “divergence window” strategy.

To recap, it’s a window of potential opportunity that he claims opens up after stocks fall and the market is irrational. And if you buy the right stocks (i.e., those with a “40 point divergence”), he claims you could see significant gains in the years ahead.

And right now, Luke Lango claims to have found ten divergence stocks with an “average spread” of 240 points that could see a 1,000% upside within the next five years.

“So far we’ve managed to find ten divergence stocks with at least 1,000% upside.

Each one of these stocks are showing signs of peak divergence…

Like I said, the average spread on these stocks is nearly 240 points, which is higher than any other divergence in history.

Our analysis tells us they’re getting ready to snap back to their “true price” and potentially explode 200% or more over the coming months…

And 10X within the next five years or less.”

What are his picks?

Unfortunately, Luke Lango didn’t share any clues about his picks in the presentation. So the only way to find out would be to join Early Stage Investor for $1,799.

But he did share one stock he’s bullish on.

What’s Luke Lango’s “Divergence Window” Pick?

Luke Lango revealed one “divergence window” stock in the presentation for free, a company called Desktop Metal, Inc (ticker: DM).

Here’s a snippet of the transcript of the presentation where Paul Ghiringhelli asked Luke Lango what his “top pick to play this divergence trend” is.

“Paul: Those are great points, Louis.

Luke, are you prepared to give away the name of your top pick to play this divergence trend?”

“Luke: I am. It’s actually exactly what I thought it was going to be, but my analysts have confirmed it beyond a reasonable doubt.

It’s a company called Desktop Metals – the ticker is DM.

It’s a hyper innovative additive manufacturing company looking to bring us into the fourth industrial revolution.

Super awesome company founded by MIT folks.

The interesting thing about it is that it has a divergence spread of over 800 points, meaning it’s ready for a snapback any day now…

And it has huge upside potential over the next few years.”

What does this company do?

Desktop Metal is an American 3D printing company based in Burlington, Massachusetts.

The company was founded in 2015 and provides 3D printing solutions for every stage of the manufacturing process, from prototyping to mass manufacturing and aftermarket parts.

And in keeping with Luke Lango’s theme of investing in stocks that have fallen, Desktop Metal is trading at (roughly) its lowest point since going public in 2020.

I don’t know if the stock will go up or down from here; I’ll leave that up to the “experts” to predict. But I do believe 3D printing (in general) will be a big part of a much larger (and, in my opinion, inevitable) trend of a return to localized manufacturing.

With robotics, 3D printing, and artificial intelligence, it’s only a matter of time before machines can make stuff cheaper than humans (in any country).

So I am bullish on this sector over the long term.

In any case, if you want to find out what other “divergence window” companies Luke Lango is tracking, you’d need to join Early Stage Investor.

Should You Join Early Stage Investor?

According to the InvestorPlace website, Early Stage Investor was started to share research on the “huge tsunami of technological change and disruption headed our way.”

And as a subscriber of the service, you get access to this research and monthly stock picks, which are focused on small, early-stage public companies. In particular, small-cap companies taking advantage of different “megatrends” Luke Lango and his team are tracking.

For example, trends like electric vehicles, CRISPR, and quantum computing.

What do you get if you join?

As an Early Stage Investor subscriber, you get one-to-two recommendations each month, which includes Lango’s research report on the company.

You also get access to the current model portfolio, updates, and a video series where Lango and the InvestorPlace team break down the ten “divergence stocks” discussed in the presentation.

How much does it cost?

Early Stage Investor retails at $2,999 per year, but it costs $1,799 if you subscribe through the “Divergence Window” presentation.

Can you get a cash refund?

There are no cash refunds with this service. But there is a 90-day “credit refund” period that allows you to join a different InvestorPlace service if you’re not happy with Early Stage Investor in that time. And there’s a “134% performance promise” in place.

Here’s how Luke Lango described it in the presentation:

“So if you choose to follow along with our research…

I promise I’ll show you at least five opportunities in the model portfolio to turn every $1,000 into $2,340…

And every $5,000 into $11,700.

If not, give us a call and we’ll give you a second year of Early Stage Investor completely free.”

Is it worth it?

I’m not a member of Early Stage Investor, so I can’t specifically say if this service is or isn’t worthwhile. But I don’t think it’s a scam, and based on what I’ve seen, it could be worthwhile depending on what type of service you’re looking for.

It also appears to have a strong track record. According to InvestorPlace, the service has an “average gain since inception” of 136%:

“Now of course, all investments carry risk. Past performance does not equal future success. And we would never recommend investing any amount you aren’t willing to lose. For reference, the average gain since inception for Early Stage Investor is 136%.”

So it could be worth checking out.

However, investing in these types of companies can be extremely risky.

The types of companies Lango recommends to Early Stage Investor subscribers are typically high-risk, high-reward potential type plays. So if you’re looking for conservative stock ideas, there are better alternatives to consider.

Is Luke Lango the Real Deal?

Luke Lango is a well-known stock picker, especially in the tech space. And his flagship stock advisory is called Innovation Investor (which is way cheaper than Early Stage Investor).

Before joining InvestorPlace, Lango founded an investment fund (L&F Capital Management) and, after he began sharing his stock ideas, earned a strong reputation on TipRanks, a site that ranks financial analysts based on their recommendations.

Some of his most notable picks over the years have included AMD, Tesla, and Shopify. And according to a different Luke Lango stock teaser I looked into about GCT technology (AKA DNA sequencing), he’s recommended over a dozen stocks that have seen at least 1,000% gains. You can see my write-up of that presentation (and his stock pick) here.

Luke Lango has no doubt picked some dud stocks, too. So there’s no guarantee his picks will help you make money, which is true for any service or stock picking guru.

Bottom Line

Luke Lango’s “1,000% Divergence Window” presentation centered around an opportunity among certain stocks that have fallen below their “true” price, which he says he’s identified using a “proprietary indicator.”

Lango also said that this “divergence” hasn’t happened since 2008 and that it could represent an opportunity to make 1,000% gains in the years ahead.

At the end of the day, nobody knows how much money any stock will make over any timeframe, regardless of what “divergence” there might be in the market or what “indicator” the person is using to find them.

But if you’re looking for ideas on small tech stocks that have fallen in price, that could potentially rebound in the years ahead, Lango’s Early Stage Investor could be worth a look.

Anyway, that’s it from me. Feel free to share your thoughts on Lango’s pitch and where the market might be headed next in the comments below. Thanks for reading.