Friday, November 02, 2007

The Little Book That Makes You Rich

Another audiobook I just finished is "The Little Book That Makes You Rich" by Louis Navellier. It currently has 4.5/5 stars from 10 Amazon reviewers. Navellier is a famous stock picker whos firm in Reno, NV, manages over $5 billion in assets. The book describes and promotes Navellier's method of identifying the top growth stocks. He uses 8 factors to judge stocks: (1) upward earnings revisions, (2) positive earnings surprises, (3) sales growth, (4) operating margin growth, (5) cash flow, (6) earnings growth, (7) earnings momentum (changes in earnings growth), and (8) return on equity (ROE). On top of these, he also explains the use of alpha and beta to add further discrimination.

I enjoyed this book and I recommend it to anybody who invests or trades in individual stocks. The book also pitches one of Navellier's websites that offers a free tool to grade your stock picks. He calls it "PortfolioGrader Pro" and it employs the above described factors as well as many more indicators to give a letter grade to each of about 5,000 stocks. I've signed up and am now using that to further examine candidate stocks.

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