First of all, let's read together what Mr. Navellier is able to invent, then we will quickly analyze his strategy on this trade.
Ready?
This week, I recommend selling Bermuda's Frontline (FRO). We're selling Frontline on a rally, as the stock rose 11.4% last week after the company reported net income of $107.8 million and earnings of $1.39 per share for the third quarter of 2008. Frontline also announced net income of $647.2 million for the first nine months of 2008, equivalent to earnings per share of $8.53. Today cut into some of last week's gains, but I want you to sell on this strong report.
Let's see the chart for the past 5 days now:
Louis, Louis, Louis... what the hell are you saying? Do you really think your subscribers are so stupit to believe to be selling in a rally?
On November 26th FRO jumped from $29.45 to $33.01 (12%) but on November 28th it went down to $29.54 and yesterday down again to $25.10 (lowest close price in more than 1 year).
Where the hell is the rally?
But let's start from the beginning. Global Growth $5.000/year paying subscribers bought FRO on March 3rd 2008. Mr. Navellier was writing:
Company: Frontline Ltd. (FRO)
Country: Norway
Industry: Marine Shipping
Buy Below: $46.38
Price was $44.28.
FRO went up preatty well until May 2008. Then it slowed down its trend, although it went up again until $72 in June 2008.
It would have been a good idea to set a stop here, let's say at around $65 and cash a 45% gain in less than 4 months.
But Mr. N does not like stop losses. In fact he was writing:
June 23rd 2008: buy below $74.54 (never reached by FRO)
June 30th 2008: buy below $72.48 (never reached by FRO)
Somebody may have had the insane idea to follow this crazy advice and buy FRO at around $72.
As you can see in the chart, from July 2008 the game is over and FRO started to nosedive until current $25.10 (what Navellier calls a rally).
In the best case Global Growth $5.000/paying subscribers once more witnessed navellier's magic to turn a 50% imaginary profit to a 43% realized loss.
Those unlucky and trustful readers who bought at $72 (as the icon of growth investing suggested) brought home a 65% loss.
Impressive...
PS: just a quick note: FRO is currently a BUY in Navellier's Portfolio Grader Pro...
1 comment:
I would like to hear from others who have been hoodwinked into losing money, like I was. You might want to contact me at:
navellierinvestors.com
Post a Comment