The Little Book That Makes You Rich: A Proven Market-Beating...

Features

• Cover Type: Hard Cover with 208 pages
• Published by: Wiley October 5, 2007
• Written in: English
• ISBN 10 Number: 047013772X
• ISBN 13 Number: 978-0470137727
• Book Dimensions: 7.1 x 5.1 x 0.9 inches
• Weighs: 8 ounces

From Publishers Weekly
Self confessed numbers geek Navellier has developed what he claims is an effective and durable system to beat the stock market, long thought a money-loser by financiers due to its self-correcting nature. Rather than focus on one or two indicators, Navellier has weighted a basket of eight variables ("earnings revisions," "operating margins," "free cash flow," etc.), a quantitative strategy he shares in complex detail and happily accessible prose. Looking into the hows and whys of stock performance, Navellier lays open the complex economic environment and explicates his eight indicators in depth, showing how they relate to the market and the real world. Though he relates choosing stocks to everyday activities such as household budgeting and sports ("Never fall in love with your second baseman or your stocks"), his precise "by the numbers" approach is far removed from emotional interference. Still, he does take into account investors' personal preferences and predicament-risk level, stress, age, tax situation and so on. Providing numerous successful examples of his system's past performance, one can't help but wonder how long this system will continue to yield results; still, this good-natured guidebook will help anyone new to investing or interested in learning a new way to look at the market.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Product Review
"Navellier builds a good case for this of investing"  (Bloomberg News, Wednesday 21st November 2007)

"A useful book on growth investing. . . Perhaps the greatest appeal of Mr. Navellier’s effort. . . is not that he offers a step-by-step guide to what he looks for in a growth company . . . The real joy comes from his frequent admonitions that Wall Street is not as rational as it would like to pretend, and in fact it is often driven either by fear — as it is these days — or by greed." (The New York Times)

"Navellier builds a good case for this style of investing. It might work for you." (Bloomberg News)

"A real contribution to investment literature. . . " (MarketWatch)

"No Greek letters or complex equations are necessary for understanding and even emulating Navellier. He focuses on eight straightforward factors for sorting the wheat from the chaff and has seen his leading newsletter, Emerging Growth, outperform the overall market nearly fourfold over 22 years. His mutual and institutional stock funds have performed handsomely too, with his Touchstone Large Cap Growth in the top 3% and 130f similar funds over one and three years, respectively, according to Morningstar." (Dow Jones newswire)

"'One of the chief things I have learned is that numbers do not have emotions. . . They don't panic; they don't get greedy. They don't have an argument with their spouse or associates and make terrible decisions as a result.' True enough — and for all investors, words to live by." (Registered Rep magazine)

"Navellier did a good job with the book and offers a nice introduction to screening. . . He should be given full credit for freely opening up his system to everyone." (The Kirk Report)

"This is a very helpful guide to building a strong portfolio without spending a great amount of time on it."  (Pensions World, January 2008)

Reader Reviews
Unarguably, Louis Navellier is a successful stock picker. He is a self-declared numbers geek who came up with a stock screen formula that aids selecting stocks that have an above average likelihood to outperform "the market". The book does not really reveal the formula itself. However, it directs you to a web site (currently free of charge) that functions as a computerized stock screen and stock evaluator. The formula relies on the combination of 8 fundamental measures and a quantitative grade assessing market movements in supply/demand for the stock. The stock evaluator in many respects resembles the one available at Investors Business Daily's for-fee web site. Chapter 1 gives a good and concise summary of the principle. Chapters 2 through 8 addresses most of the fundamental measures; these chapters may be useful for the complete novice, but even for the minimally experienced reader they prove shallow. The rest of the book was more insightful, but also contained important errors and omissions. An important and well-covered concept was portfolio design, balancing the sectors, and picking stocks of varying risk (conservative, moderately aggressive and aggressive) at certain proportions (60/30/10%, respectively). A significant problem is that Navellier never defines the benchmark that the portfolio allocation (by sector) is supposed to imitate and beat by superior stock picking. His research started with the S&P500, but today it he also researches and in invests in foreign stocks - without stating the benchmark that he is beating. Towards the end of the book, he recites the "sell in May and go away" market timing as if it were true. The idea indeed worked somewhat once upon a time, but it was elegantly discredited by Ken Fisher in his latest book ("The only three questions that count" - a book I would highly recommend). Navellier's attempt describing and explaining the presidential cycle of the market was in part wrong, and in part thoroughly unsophisticated. Fig. 19.2 is outright misleading. It is showing the performance of "A-rated" stocks (identified by Navellier's method) between February of 1998 and December of 2006. It shows 1,127% in profits. This would be true if the investment was in a tax-deferred (IRA) account, and (most likely) if there was no frictional cost of trading (commissions and spread) that would have eroded the profits. Navellier's approach is certainly not conducive to hold the typical pick for eight years without trading. In addition, the figure has no reference benchmark over the same period of time. This is merely an example; the book contains a surprisingly great amount of mistaken or misleading information. Although the book warns you of the dangers of the stock market, it also may leave you with the mistaken notion that the web site's stock picking and stock evaluation would provide a safety net. It might, but only together with additional stock evaluation. For example, Navellier never mentions whether large-scale insider selling has an impact on subsequent stock performance of those particular stocks that his formula identifies as "A-rated" (and there are such stocks - I checked). The web site is nevertheless potentially useful, if one does not try to accept its recommendations automatically. Some of the "A" stocks are overpriced, whereas others are really bargain-priced in spite of their clear growth and growth potential. Navellier does not alert to ways of further evaluating the leads, and that is a significant shortcoming of the text. The whole book is verbose compared to its content. You could skim large portions without missing anything important. Its style - well, Mr. Navellier is probably a much better investor and number cruncher than a writer. Among the four published volumes of "The little book" series, I would rank this one second or third from the top (the best is by Joel Greenblatt, a real fun and insightful introductory book; the worst, by far, is Christopher H. Browne's). Using Navellier's book, the novice will not get enough explanation to take action (at least, not safely), whereas the more experienced investor learns just about nothing from the book (which is similar to the CAN SLIM approach by O'Neil). The access to the data base is the best aspect of this book for which you don't really need to buy the book. Greenblatt's book also has a companion website (a useful tool). Note that Greenblatt's "magic formula" identifies some of the same stocks that Navallier's site rates "A". The "quantum stock" part of the book promulgates the practice of "renting" a stock. It might work in experienced hands, but it is certainly not helpful in creating jobs - thereby bypassing the societal benefit of stock market investing. Comments (2) | | (Report this)