Editor's Note: Thanks for your overwhelming response to our guest writer, Louis Basenese, the founder of Disruptive Tech Research. Here’s a third article from Lou. Enjoy.

By the time you read about a “new trend” in The Wall Street Journal, it’s likely that you’ve already missed it.

So to identify new investment opportunities, I focus on information sources that are a bit more unusual.

One of these resources can help its readers see the future. Literally.

I’ve used it to help my clients predict stock price movements 12 to 18 months before they happen, and to earn massive returns.

Today, I’ll tell you more about it – and I’ll tell you how you can use it, too.

“Bigger Than The Web”

Perhaps you’ve heard about a technology known as 3D printing.

3D printers look like desktop printers. But instead of printing words, they “print” objects – everything from sneakers and chairs, to handguns and cars.

Chris Anderson, former Editor-in-Chief of Wired magazine, believes 3D printing will be “bigger than the Web.” Other industry insiders believe it will spark the next industrial revolution.

So it’s no surprise that investment companies like T. Rowe Price have been recommending the industry to their investors for the last couple of years.

But truth be told, I’m a little curious what took them so long.

You see, I first started focusing on 3D printing back in 2010…

That’s the year I recommended an investment in 3D Systems (DDD).

By the time anyone else had picked up on it, my readers had already doubled their money.

Twice.

How was I able to spot the opportunity so early?

The answer is the cornerstone to my disruptive technology investment approach.

Where The Magic Happens

My success as an investor comes from a simple three-step system.

First, I identify major global growth trends that promise to endure – Clean Tech, for example, or Mobile.

Next, I identify segments within those trends that have the fastest growth and highest margins.

Finally, I screen for the most innovative companies within those segments. This is where the magic happens.

Measuring Innovation?

But this last step raises a question:

How do we objectively measure which companies are the most innovative?

To do this, many investors analyze a company’s budget for Research & Development, or review presentations they’ve made.

Those methods are fine. They’re part of my process, too.

But I study something different.

The Most Overlooked Document

I study a set of documents that reveal a company’s product and innovation road-map.

I study a company’s patent filings.

Why? Because patents are irrefutable and tangible proof of a company’s technological leadership.

And yet, very few Wall Street analysts focus on them. They should. Here’s why…

Before a company can book a single penny in profits, it needs a product to sell.

But before a company produces something nowadays, it needs to patent it.

If they fail to take this step, competitors can copy the product – and “steal” the profits.

So when I’m investing in disruptive technologies, I look for spikes in patent filings.

That’s a surefire indicator that we’re on the cusp of innovation – which in many cases, means an increase in a company’s sales, profits and share price.

Let’s take a look at 3D Systems so you see what I mean.

Patents Lead the Way

Between 2005 and 2008, I noticed a massive increase in 3D Printing patent filings.

They jumped from about 100 per year, to more than 400 per year.

After digging into the data more deeply, I discovered a single company at the epicenter:

3D Systems.

It held a remarkable 141 patents. Its nearest competitor had only 7.

At the time, its split-adjusted price was $10.47.

By the beginning of this year, it had risen to nearly $100.

In the end, it was the patent filings that revealed 3D Systems to be a clear leader in innovation.

And it was the patent filings that led me to make a recommendation to buy the stock...

Happily, those who followed my recommendation made an 855% profit.

Earning Maximum Profits

To be clear, not every patent is valuable.

Which is why patent applications can’t be your only criteria for making an investment.

I’ll get into the other criteria in a future article.

But for today, here’s the key takeaway…

To earn maximum profits, you need to identify disruptive technologies long before others…

And long before you read about them in the pages of The Wall Street Journal.

To do that, follow the patents, not the headlines.

Good investing,

Louis Basenese

Ahead of the tape,