Navellier's nervous, by his standardsMarketwatch
-- he's still charging.
Louis Navellier's Blue Chip Growth Letter is seventh-best-performing letter over the past 12 months according to the Hulbert Financial Digest, up 29.88% vs. 5.62% for the dividend-reinvested Dow Jones Wilshire 5000. But its success goes much further back than that. Over the past 10 years, Blue Chip is up 14.11% annualized vs. 6.31% annualized for the total-return DJ Wilshire.
That is a remarkable record. However, as I've occasionally noted, Navellier (or his publishers) feel the need to make it even more remarkable, with ruthless promotional mail shots and eye-catching impossible claims. See July 14, 2006 column
Ignoring my harrumphing, Navellier is still at it. In a recent emailing, he writes: "Our goal is to hand our readers 35% to 50% gains every 12 months. It's a vow I've kept for more than two decades."
Bunk. (See above).
But what really caught my eye was Navellier's opening: "Make no mistake about it there's a ton of risk in this market and a lot of investors are about to get burned. Unless you squeeze the risk out of your holdings, you're going to find 2008 a better year to lose a fortune than to make one. After all, with house prices tumbling, bank losses rising, and oil prices hitting the $100-a-barrel mark, only the strongest stocks will survive the shakeout."
This is news, because Navellier has been a staunch supporter of this bull market throughout earlier stumbles. See Oct. 30 column
Now, for the first time, he's faltering , like brother bull Cabot Market Letter. See Jan. 10 column
Market downturns are particularly harrowing for Blue Chip Growth Letter because the letter policy is always to be fully invested. It focuses exclusively on stock picking, relying on a strategy that favors companies that have exhibited the best relative strength with the least volatility. And stocks picked according to this strategy tend to be much riskier than the market as a whole.
What this means is that Navellier's only defense is to prune his portfolio back to the strongest stocks, according to measures developed over many years. He writes: "All eight of our measurements of success have been scientifically selected and mathematically weighted to indicate whether a company is vital and growing; how well its products are selling; how fast earnings and cash flow are multiplying; and whether the company can continue to maintain a high level of profitability."
He's currently offering a list of 257 stocks to shun, including big names like Home Depot, Inc. (HD), Eli Lilly and Co. (LLY), and Sprint Nextel Corp. (S)
Nevertheless, Blue Chip Growth still has a long list of buys, divided into different portfolios according to aggressiveness.
In his latest hotline, Navellier writes with particular fondness about the recent performances of Research In Motion Ltd. (RIMM), Apple Inc. (AAPL) and Garmin Ltd. (GRMN) ("The company is simply on fire.")
All are rated "Moderately Aggressive."
"Aggressive" stocks include First Solar Inc. (FSLR), McDermott International Inc. (MDR) and Suntech Power Holdings Co Ltd. (STP)
After each, Navellier comments: "Pulled back and is a good buy."
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