I’m a huge fan of these colored “Little Books” published by Wiley (some other ones that I think are good are The Little Book That Beats The Market and The Little Book of Common Sense Investing, which arguably has the biggest name author in Vanguard’s John Bogle) and this one probably looks the coolest because it’s black and gold. The Little Book That Makes You Rich is penned by Louis Navellier, spans 185 pages, and focuses on growth investing. Now, what’s the difference between this book and the others? Each of them focuses on a different aspect of income generation with respect to the stock market and each one has an expert writing it. The ones I’m aware of are:
- Common sense (red), which is about getting what you deserve from the market (a lot of talk about index funds),
- Value investing (green) is about finding down and out stocks (think Buffett’s cigar butts and his mento Graham’s Intelligent Investor)
- Beating the Market (blue) is a wrinkle on value investing that focuses on earnings yield and the business’s return on capital
Who is Louis Navellier? According to the inside flap of the dust jacket, he “has one of the most exceptional long-term track records of any financial newsletter editor in America.” Check out the first paragraph of a MarketWatch article that asks some questions about a new newsletter – “Witness Louis Navellier’s Emerging Growth. It’s the number one performer among 32 surviving letters followed continuously by the Hulbert Financial Digest over the last 20 years. Its portfolios have achieved an average annualized return of 19.8% vs. a dividend-reinvested return of 12.5% for the Dow Jones Wilshire 5000.” I’d say that gives Navellier enough credibility to write this book.
So what’s in this little guy? First, I like Navellier’s writing style and his general approach in this book. The preface begins by addressing (but not answering, that will come later) the one skeptical question I had: “how the heck is this book, little or not, going to make me rich!? It’s not that easy!” He will applaud you, tell you that you shouldn’t believe everything you hear, and that the next 185 pages will enlighten you to his approach that has given excellent returns over a spectacular time period (in fact, the eight factors he looks for are on page 3 – not buried on page 216, not that there are even that many pages, after reading a lot of charts and being built up, his eight factors are on page three).
What are these eight factors? Ha – get the book, it’s only $14 from Amazon and before I go any further I already recommend the book if you’re looking to get into growth investing. The balance of the book goes into each of the eight factors and points out one derailer that I will share with you. Navellier’s derailer is human emotion. He doesn’t believe in the story, he doesn’t believe in falling into or out of love with stocks, he says that all that will cloud the reality that lives in the numbers. Believing the latest buzz on the street, hearing some “tip” at a cocktail party, or believing any number of questionable information sources, only hurts your ability to make a good decision. Steve Forbes, in the Foreword, did say that Navellier has picked a few “clunkers,” but the overall performance of Navellier’s picks and his returns have been “enviable.”
Sneak a peek at your local book store to see if it’s for you.