Small book, big results (hopefully)!

The Little Book that Makes You Rich is a another of the "Little Book" series that supposes an easy way to make a killing in the market. It does not get any easier. Navellier makes investing seem like a spectator sport. All you do is go to his handy web site where he has constructed a grading scale for stocks.

In the book, he describes his ranking of stocks on eight different measures, all of them growth related. I'll list them so you do not have to read the book.

Positive earnings revisions
Positive earnings surprises
Increased sales growth
Expanding operating margins
Strong cash flow
Earnings growth
Eearnings momentum
High retun on equity

They are tabulated to come up with an overall fundamental and quantitative weighted grade. If the stock is an A, then you buy it. If it is an F, you sell. It is that easy. So, how do my stocks rate thus far? Let's go to the site. Of course, they don't rank the ETFs that I purchased, but of all the others, ASR, ICFI, and WFR are graded as "A," SAM is a "B," STMP is a "C," and WAG is a dog graded at a "D."

There is not a lot of other material in the book, so I don't recommend it overall. He states how he originally came up with the formula and gives some theoretical reasons why it should work. He does have a good discussion of Beta, the volatility of a stock compared to the overall market, and Alpha, the return of a particular stock above or below the overall market. Not to much info that is new. One would want to diversify holdings to keep beta low, and pick stocks that have a high alpha to increase returns. Unfortunately, alpha is how a stock has done in the past, so may not hold true in the future.

Now, which to buy? Very easy, he rates each stock on his site, so I will pick the recommended Marine company TBSI, which has a overall grade of A on both the fundamental and quantitative scales.