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36 of 44 people found the following review helpful
5.0 out of 5 stars excellent guide to stock picking
Quite simply, this is one of the best books on picking stocks I have ever read. Most of the books I read in this area are not specific enough about the exact steps need to find high quality stocks. In straight forward easy to read and understand language, navellier revelas exactly what qualities he looks for in growth stocks. most of the tools you need to be a winning...
Published on October 4, 2007 by T. Melvin

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75 of 85 people found the following review helpful
2.0 out of 5 stars The Little Book that might make you a little more money than some folks some of the time.
The title of this book is very catchy, entirely appropriate if you had invested with Navellier through the `80's and `90's when the market went from less than 1,000 to almost 12,000 (and the NASDAQ even more so, of course), but, if you were with Navellier during the market tank of 2000-2003, then you would know that the title of the book is more than a little...
Published on November 5, 2007 by Fredrick P. Wilson


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75 of 85 people found the following review helpful
2.0 out of 5 stars The Little Book that might make you a little more money than some folks some of the time., November 5, 2007
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This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
The title of this book is very catchy, entirely appropriate if you had invested with Navellier through the `80's and `90's when the market went from less than 1,000 to almost 12,000 (and the NASDAQ even more so, of course), but, if you were with Navellier during the market tank of 2000-2003, then you would know that the title of the book is more than a little misleading.

The success of Navellier is 100% dependant upon the overall stock market. When the market is going up, then the title of this book is OK. When the market is going down, it is easy to lose money much faster than the market does. There are exceptions to every rule, but overall, these "fundamentally superior" companies with outstanding earnings just follow the stock market. Normally, when the market is going down, these stocks will lose against the market up to twice or three times as much on a percentage basis on any given day.

Normally, when the market is tanking and your account is also, you'll receive a nice E-mail telling you to sing the "Don't worry, be happy" song, for every downturn is nothing but a buying opportunity. However wonderful that may be for Forbes, who wrote the forward, and Navellier himself, since they are both richer than Pharaoh, it is not a joyful experience for the normal investor. Since the normal investor is fully invested, exactly what money do we have sitting on the sidelines? Usually we are fully invested with the limited money we have, hoping against hope, to make some money, and have no from-under-the-mattress sack of cash to pony up since we just lost our shirts during this "buying opportunity"!

Navellier recommends what he calls his "Oasis" stocks, to ameliorate your losses when the market is dropping. The only problem is that these "oasis" stocks won't save your portfolio, for they will drop like rocks also, at least in the market of 2003 - 2007.

In early March 2006, the market dropped from a high of 11,600, but by October 2006, had recovered to 11,600. All of Navelliers stocks had lost his investors tens of thousands, if not hundreds of thousands of dollars, and were way down from March through October, not recovering until the spring of 2007. For relatively new investors, during that period we all lost everything we had made back to our principle, while the market was flat. Mr. Navellier stated that during that time period "growth" stocks had fallen out of favor. No kidding! "Out of favor?" I would hate to see how much money we all would lose if the stocks became downright unpopular.

Once, at a seminar, Mr. Navellier showed a chart that had a rapid rise and then fall. He states that he told those investors after the fall that at least his stocks had made 3% more than the market. That is a far cry from anything else stated by Mr. Navellier, for double, triple, even quadruple gains are the norms, going up, but the mirror reverse, which is never mentioned, is true when the market is going down.

There is a chart for the Quantum Growth Stocks in this book, which shows a 1,500+ point rise since 1998, including making money during the down market of 2000-2003. There are liars, darn liars, and statistical number crunchers. I would have to see the raw data that was "back tested" before I could believe this chart. Certainly, these stocks utilize stop orders, so there is a somewhat limited downside, but normally the stops that have not been exceeded are just lowered, and until these stocks hit their stop order limits, they can lose your shirt for you also.

The unfortunate occurrence in today's market is that it wanders up and down, up and down, up and down. If that is repetitive, so is the market. Every time his investors make a little bit of money, the market drops and we lose it all over again. And again. And again.

The Little Book That Makes You Rich is titled with a marginally verifiable statement, for both Forbes in the forward and Navellier know the reality of these "fundamentally superior" stocks, and sugar-coat it out of existence in this book.
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29 of 32 people found the following review helpful
3.0 out of 5 stars Good for Beginners,, October 20, 2007
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This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
This small and easy to read book provides a good introduction to the fundamentals of growth investing. However, the experienced investor will find little inspiration in reading that stock valuation is based on earnings and sales growth as well as other Finance 101 parameters such as betas and alphas. The book doesn't go into much detail on how the 8 parameters for growth investing fit together so you can calculate your own valuation score and tweak it for your own needs.

To find a stock's valuation score, you'll have to go to the book's companion Web Site where you'll find a carefully crafted set of pages that feel like they were designed by a marketing consultant. The stock database is interesting but of limited value to an investor. The registration process is done in two steps: first you sign up and get a generic account that doesn't let you save a portfolio, then two days later you get an email that allows you to create your own username which can then be used to save a list of stock picks. Why is this necessary? This feels like it's part of a marketing campaign that aims at increasing your hunger for more. Once you get to the database, you'll notice that many A rated stocks are overvalued and at the peak of their hype cycle. Blindly building a portfolio of A rated stocks seems like a good way to loose your money.

In the end the book leaves you with a hunger for more. How do ratings evolve over time? How do you weight the 8 fundamental indicators? What is the "Quantitave Grade" that mysteriously appears in the stock database but never gets explained in the book or on the site? It's hard to believe that all of these open ended questions are not part of a more elaborate strategy: Give the reader a taste of Navellier investing and then let them eat the full meal by buying into his funds.
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18 of 20 people found the following review helpful
2.0 out of 5 stars Not too informative, but some interesting insight, November 15, 2007
By 
Dustin Bouch (Southern California) - See all my reviews
(REAL NAME)   
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
I'm not sure why the book is getting some much press other than the fact that Mr. Navellier has been doing a lot of promotion (which by the way is cleverly aimed at indirectly promoting his newsletter services). I had never heard of Louis Navellier before I came across the book, so I did a little researching into his recorded stock market performance record. Navellier has six publicly traded mutual funds. The best of the group as far as five year annualized performance is his International Growth Fund (NAIMX) at 20.86% ... not amazing and certainly no CGM Focus (33.52%) or Kinetics Paradigm Fund (26.95%), but respectable non the less.

Overall, "The Little Book That Makes You Rich" is a decent book that describes a system for growth stock investing that is very similar to the IBD method. Navellier doesn't really go into enough detail for the reader to exactly replicate his strategy without using his companion website tools (which you have to sign up for his newsletter to get full access to). However, he does lay out the general frame work for his strategy which revolves around grading stocks based on eight fundamental grades and a quantitative grade. The eight fundamental grades are:

1. Positive Earnings Revisions
2. Positive Earning Surprises
3. Increasing Sales Growth
4. Strong Cash Flow
5. Earnings Growth
6. Positive Earnings Momentum
7. High Return on Equity

Navellier does not explain his quantitative grade in detail but he does explain that it is an indicator of institutional buying pressing on the stock. He also eludes that the grade is determined by the stock's reward/risk ratio, which he does describe in a fair amount of detail and is actually one of the more interesting discussions in the book.

Navellier defines reward/risk as alpha divided by standard deviation for the trailing 52 weeks. He further explains that it's important to calculate alpha based on a relevant index. For example, when determining alpha for a stock in the NASDAQ, it's important to use the NASDAQ composite index to measuring alpha against, not the DJIA. He also goes into a rather incoherent discussion about how alpha is not the same as relative strength:

"Relative Strength measures how a stock is doing relative to the index at any moment. For example, if a stock tracks a market benchmark precisely with 100 percent correlation, and that benchmark rises 50 percent in a year while the stock rises 100 percent, that stock will end up having a beta of 2 and an alpha of 0. Now, I know what you are thinking: How can a stock that does double the overall stock market have an alpha of 0? It's simple, the entire stock return was completely explained by it's high beta and none was explained by it's alpha."

Now that sounds like a decent explanation of alpha verses beta, but I don't see how this explains how relative strength is involved. In any case, this excerpt shows Navellier's relaxed style of writing that he uses throughout the entire book. His writing style is similar to Peter Lynch's writing style, both use a common sense, simple approach to explaining things that tends to work a little better for Lynch.

Essentially, Navellier's strategy revolves around picking stocks that score high on all his fundamental grades and his proprietary quantitative grade. He also states that extremely high returns can be had by aggressively trading stocks that only score within the top 20 percent in all the eight fundamental grades. He claims that by sticking to a strict policy of only buying stocks that comply with this criteria and selling them the minute they no longer do, one can average better than 50 percent annual gains.

Aside for the fundamental and quantitative grading, Navellier makes several other points worth mentioning:

- He recommends a portfolio of a 60/30/10 mix between conservative/moderately conservative/and aggressive stocks

- Navellier is a strong proponent of the IBD (so he definitely has good judgment there!)

- He is a believer in the sell-in-May-and-go-away philosophy

- He also believes in the first and third year of a presidential term as a better time for market returns

- He claims making new investments in March, June, September and December is a good idea for growth stocks because it puts you in a good position for earnings releases

- Navellier says the best way to protect from accounting fraud is to screen stock for good grades in operating margin, return on equity, and cash flow as it's difficult to manipulate all three of these

- He reminds us to always remember Wall Street is a sales machine (very good advice in my opinion)

- Navellier points out that "The ETF effect" can cause stocks to get bid up based on rebalancing of index funds and not necessarily performance

And so there you go, "The Little Book That Makes You Rich" isn't the most informative or ground breaking read and often reads like a sales pitch for Navellier's newsletter, but it has some interesting insight and lays out a decent method for stock picking. If you have a couple of days to mow through a quick read on growth investing, it's worth picking up.
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36 of 44 people found the following review helpful
5.0 out of 5 stars excellent guide to stock picking, October 4, 2007
By 
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
Quite simply, this is one of the best books on picking stocks I have ever read. Most of the books I read in this area are not specific enough about the exact steps need to find high quality stocks. In straight forward easy to read and understand language, navellier revelas exactly what qualities he looks for in growth stocks. most of the tools you need to be a winning investor in growth stocks are in this book. What few tools he couldnt give away in the book he makes available to you on the books companion web site. I think investors both new and experienced can learn a lot about finding winners from this book. Navellier teaches the techniques, the mindset and how to mangage your portfolio over time. It is a gem of a littlebook!
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43 of 54 people found the following review helpful
5.0 out of 5 stars Must-Have for the Growth Investor, October 13, 2007
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
There are numerous types of investing. You no doubt know that. Growth investing is a type of investing that we all should do at some point of our investment life. In fact, I for one love investing for growth and finding good companies poised to grow big time. That's why I enjoyed this book.

Actually, value investing is a form of growth investing. The real problem for the growth investor is finding companies with balance sheets that tell us, "Hey, this company will go places." And, wouldn't it be great if it would do well in any market?

That's where this book can help.

Growth investing produces (or is intended to produce) capital gains rather than income. Income gives us dividends. That comes from, most often, blue chip companies or companies that have been around quite a while.

Growth investing is the place where you can really make money. Income investing is generally done by older people who want to preserve capital and have some fairly secure income. Growth investing is for people who have the time to grow their portfolio over a longer period. It does not pay dividends.

Navellier has created a proven and easy-to-follow approach to growth investing that offers you a rare opportunity to outperform the market without excessive risk. It doesn't get much better than that.

He explains why his method works and he shows you how to find stocks that are poised for rapid price increases no matter how much volatility is in the market.

Most investors are really not that great at investing. And those who call themselves professionals seldom are the best stock pickers.

So you should arm yourself with this book. Go out and find the winners. It only takes a few to make you rich.
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11 of 12 people found the following review helpful
1.0 out of 5 stars Hype. Self promotion and marketing machine at work., September 5, 2008
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
Before employing this strategy, i suggest you review the performance of Navelliers mutual funds on Morningstar.com and/or other websites. Despite tremendous performance figures presented in the book, most of his funds rank poorly over the last 5 years on an annual basis. They are typically in the bottom quartile. Yes, his long-term numbers are still good and occasionally he has a decent year, but the reality is that the performance outlined in the book isn't what he's delivered over the last 5 years.

I'm always very leary of performance claims without the supporting data. For a "numbers guy" I was suprised only the basic return numbers were included. No supporting information is provided the shows the annual returns, risk or tracking error. Nor is the benchmark discussed. Further digging showed why. There is s huge disconnect between the real performance of the funds he runs and what's presented in the book. Be care employing this magic formula as, for the most part, even Louis doesn't produce the numbers he claims.
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120 of 159 people found the following review helpful
2.0 out of 5 stars Poor book, probably useful web site, October 10, 2007
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This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
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.
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7 of 7 people found the following review helpful
4.0 out of 5 stars This method can't make you rich, but can increase your odds, January 11, 2008
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This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
Navellier's main theme is that the market is not efficient. Unlike John Bogle's book in the same series, which not surprisingly touts the efficient market theory and investing in low-cost index fund, Navellier is looking for quantifiable and measureable numbers that will allow someone to systematically beat the market over long periods of time.

First he goes over eight fundamentals and explains their importance. Yet he also warns the reader not to overemphasize any one of these fundamentals. Too often, people get caught away in one measurement that works for a particular period, and try to repeat the formula, which doesn't work when the rest of the market catches on.

What differentiates Navellier's approach is the use of alpha as distinguished from beta. Unlike other approaches, he does not want to just magnify returns by using high beta stocks and taking on more risk. Instead he looks for how much return a stock differs from market movement. This is in contrast to indexing. By coupling the 8 fundamentals, and then looking at a high alpha, he tries to pick stocks whose alpha will make them outperform (rather than underperform) the market. Finally, to maximize the possibility that the differential performance is on the up size, he gives a high weight to his most powerful variable, the Quantitative measure, which gauges the relative recent performance of a stock against the market. He is looking for underlying buying pressure.

Will this method work with every stock pick? No. Will it guarantee that you will not lose money in a bear market? No. Will it be as easy to use as just logging into the website, picking "A" stocks and selling them when their grades go down? Not likely. But by combining the quantitative measure and the fundamental measure, and buying Grade A stocks, the hope is that you can theoretically beat the market over indexing.

Even if statistically this method beats indexing, it may not be easy for the individual investor to implement successfully. For one thing, you will be buying, selling and paying taxes too often. And there is no way around the fact that all of the measurements and grades are based on past performance. Finally, it requires access to the data, which Navellier graciously provides at his website for free. This book may not make you rich, but it'll definitely drive people to try out the newsletters after finding it hard to put the principles into practice and needing more guidance. Even then there is no guarantee, because you cannot place the trades at the exact time the recommendations are made, or close them out exactly at the price he records. In real life, there are others chasing the same recommendations which causes his stocks to pop the first day recommended, and slump when he issues a sell. Also, you have to buy the entire portfolio and keep rebalancing to his 60%/30%/10% Conservative, Moderately Conservative, Aggressive allocation to get the same results as his newsletter.
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6 of 6 people found the following review helpful
1.0 out of 5 stars Don't waste your money!, January 12, 2010
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
This is by far the worst book I've purchased in the past 12 months. The little book series is generally speaking quite good. I was in a hurry when I purchased this book. I was taken by catchy title and the brief description about growth investing. It's nothing more than an advertisement for his website. I lost count how many times Navellier refers to his website. Towards the end of the book, the quality becomes even worse and the book becomes nothing more than a step by step guide on how to use/navigate his website. I should have read the review on Amazon first! Don't make the same mistake, save your money and use it for something else!
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7 of 8 people found the following review helpful
1.0 out of 5 stars lots of hype, December 12, 2008
By 
This review is from: The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Hardcover)
I very much agree with the bad reviews here. Read the book and subscribed to two of his letters, Blue Chip and Emerging Growth in late 2007. Did nothing but lose money, and this is before the big Oct/Nov drops in the markets. And to make it worse, he blows much smoke and hype about how well things are going. Check out investorcrap.blogspot.com for some real feedback. Hope it helps someone not to lose money from his book or letters.
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