Saturday, November 1, 2008

Louis Navellier and GTE

GTE was one of the stocks pumped by Mr. Navellier in the last months.

In one of his spams from June 2008 Mr. Navellier tried to convince people to subscribe to his $5.000/year Global Growth newsletter with sentences full of marketing junk like the following:
  1. Up 24% in two weeks, Now Set to Double by Next Friday‏
  2. Grab it Before it Hits $12 by Next Friday
  3. Buy this one today and I guarantee you’ll thank me a thousand times by July 11th
  4. My updated research calls for a double in the next two weeks with the possibility of a 10-bagger by this time next year
  5. A Double in the Next 14 Days—Guaranteed
  6. Grab my Canadian oil stock today. I guarantee today’s trade will be your most profitable investing decision for 2008

On that specific spam day, June 26th 2008, GTE was at $7.60.

But let's go back to April 21st 2008, when Mr. Navellier added GTE to his Global Growth portfolio. He wrote: The stock is a good, but it is also risky.

On that day GTE closed at $4.08.

In the following weeks/months GTE performed very well, going over $8 in June, when Mr. Navellier sent his spam to the whole world.

Some or many people may have actually bought GTE at that time, between $7 and $8.

On June 23rd the buy below price was $8.12. As Mr. Navelleir usually does, when the price goes up he sais to buy.

On June 30th the buy below price skyrocketed to $8.71 when GTE moved to #1 of the Top 3 Stocks. In facts June 30th can be seen as the end of GTE uptrend. Louis wrote:

Canada's Gran Tierra Energy (GTE) moves up to the #1 spot. Last week, [REMOVED DUE TO COPYRIGHT]

The next month, July 2008, GTE started its decline moving from $8 to $5 (that is a -40% for those who followed the buy below at the end of June) and Mr. Navellier wote:

Buy Below $7.55

Gran Tierra Energy (GTE) has returned profits of about 70% since I told you to buy it April 21.

Even in his July teleconference Mr. Navellier said to Stick with GTE. One of his $5.000/year paying readers (Norman S.) asked what happened to Grand Tierra Energy. He's noticed that after he bought it, it hasn't done anything, it's just gone down.

Mr Navellier explained that GTE is an Alberta energy company and it's very sensitive to the price of oil.

He claimed that Norman must have got in a hair little late. But he also said he ws feeling very, very good about that stock.

At the end of July the buy below price went down to $6.12. And those who bought at $8? What does poor Norman think?

The collapse did not stop and GTE went down to $4, then $3. Nevertheless GTE was still in the Top 3 stocks on September 29th (buy below $3.53).

Then it went to $2. And in just one week it moved from the Top 3 Stocks to the Sell List with a Sell Above price of $3.14.

Setting sell above prices is a crazy method. Stocks can go down forever and you will never sell. This is exactly the opposite approach of Stop Losses (that usually work well).

As a matter of facts, here is what happened. The week after the $3.14 sell above price (October 6th) GTE continued to go down.

The week after (October 13th) Mr. Navellier lowered the sell above price to $3.08.

Next week (October 20th) down again to sell above $3.05.

But GTE went down and down and down. On October 27th the new sell above price was at $2.35.

Finally, on October 30th GTE went above it, reaching a maximum of $2.45.

Now the performance summary. GTE did not actually go to $12 next Friday. It did not double. It was not a 10-bagger.

Buying at $4.08 and selling at $2.35 generated a loss of 42% for Mr. Navellier.

For those who got in a hair little late, like poor Norman, and bought it at $8 (according to Navellier's Buy Below price) the loss was around 70%.

And this was the most profitable investing decision for 2008. Mr. Navellier guaranteed.


Anonymous said...

Tell Norman not to feel so bad ... he has company ... me.

Anonymous said...

>Mr. Navellier guaranteed.

The "guarantee" is a piece of deceptive sleaze since it only means that he'll refund what's left of your subscription if the stock doesn't do as he predicts. Unfortunately we usually stand to lose considerably more in the bad investment than we "gain" by any refund.

Anonymous said...

If somebody writes:

I guarantee today’s trade will be your most profitable investing decision for 2008

This cannot be related to the "money back" guarantee.

Anonymous said...

I got trapped by that one also...buying in at $7.98 and I'm still holding it? Is there any hope for this company? It seems to float between 1.75 and 2.75. Maybe when oil comes back. I bought this from one of his blogs, then subscribed to the Blue Chip Growth and have used that newsletter since August. I'm seeing a pattern of his entry points being consistently too high. All of his picks seem to do nothing but fall. Is it just because things are so bad right now or is his approach wrong. What about the Portfolio Grader, is that rigged too?

Anonymous said...

"The market is going down" is no excuse.
Nobody needs an expert when markets go up.
And according to what is reported on this blog, nobody needs Navellier at any time...
This guy is a scamer.