Louis Navellier Puts His Money Where His Mouth Is

A detailed study of the financial blogosphere will lead you to two conclusions:

1) It is dominated by Value Investors

2) The majority of the influential bloggers are bears

Louis Navellier does not have much in common with the most bloggers. He turns cautious, and even bearish, but switches gears opportunistically. And he is a growth investor. The Touchstone Large Cap Growth Fund (TEQAX), which he has sub-advised for over 10 years, includes stocks like Potash Corporation, Research in Motion, Express Scripts, The Mosaic Company, Apple, Inc, and Mastercard in its top 25 positions, to name a few.

And while most bloggers are fixated on what Warren Buffett ate for dinner, or why it should be Warren's way or the highway, Navellier has put up numbers that place him firmly in the top decile against his peers over the last decade. And he has smoked the S&P over that time. Bill Miller could not carry his jockstrap, and trails Louis by a country mile despite having positions, like Google, in common from time to time.

Louis will not waste your time pontificating on the Austrian School of Economics, or deconstructing unemployment claims, but he will tell you why earnings growth is about to accelerate the fastest it has in decades.

In plain English, to boot:

Even if the economy has an anemic recovery, corporate earnings are poised to surge in the second half of 2008. Third quarter earnings should rise by 30% and fourth-quarter earnings should rise by an amazing 70%. This will be the strongest earnings growth for the S&P 500 in decades.

I know what you are thinking, “How can earnings surge so dramatically when it’s not yet clear how strong the recovery will be?” Well, it’s not that difficult to explain. The reason is because the massive write-downs due to the credit crisis started in the third quarter peaked with the fourth quarter. As a result, the year-over-year earnings comparisons will be very favorable even if the economy still isn’t growing strongly.

There are five major factors working to help the future earnings environment:

• The current trough in corporate earnings
• We’re near the end of the Fed’s interest rate cuts
• There’s a near record amount of cash on the sidelines
• Corporate buy backs are relentless
• The market typically rallies heading into a presidential election Navellier Growth Blog

If you believe earnings drive stock prices, and Louis is on the mark, we will take break through 1400 on the S&P 500 before Labor Day, and perhaps Independence Day.

And challenge the July 2007 highs shortly thereafter.

This might not sit well with bearish bloggers, but we have $5 billion reasons to side with Louis in this debate.

And if Louis is on the mark, he will be running $6 billion by the end of the year.
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Five Factors Helping Future Earnings
Navellier Growth Blog
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

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