Navellier Growth: your source for market-beating growth stocks

A small group of scientists, including some psychologists, say they are starting to discover what many Wall Street professionals have long suspected — that people are hard-wired for money. The human brain, these researchers say, responds to high-stakes trading just as it does to the lure of sex. And the riskier the trades get, the more the brain craves them.

So trading is like sex! At least according to our brains. This is fascinating, but I have to admit that I'm not surprised. I've been at this game a long time. Trust me: When people trade stocks, they loose control, and their emotions take over. Look at what happened on Tuesday when the Dow dropped 370 points. People panicked and in just a few hours, hundreds of billions of dollars were wiped out.

What was the cause? Who knows? The media says it was the lousy ISM report. Could be, but I'm sure a lot of folks were selling because…well, they saw other folks selling. The process snowballs, and before you know it, your portfolio is bleeding red ink.

Too often I've seen traders forget that they have real money on the line. Instead, they're more interested in getting that "high" from trading. The action is fast, the stakes are high and the payoffs can be enormous. And when things don't go their way, yikes, stand back! Traders can go into Jim Cramer-style rants complete with chair-tossing. It's not a pretty site.

The problem with this mentality is that it's completely wrong if you want to be a successful investor. To win on Wall Street, you have to keep your emotions in check. Investing is serious business, and it should be treated that way. That's why I started publishing my research for investors, and today I want to tell you about PortfolioGrader Pro, my free stock-rating website.

Buying stocks isn't like buying lottery tickets. The shares you own are claims on real assets. That's the key insight that has driven my stock-picking system for over two decades. (I recently laid out my complete investing system in my new book, The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing.)

My goal has been to deconstruct every publicly traded stock, look at the parts and see what makes it tick. With PortfolioGrader Pro, you can see my Buy-Hold-Sell ratings on thousands of stocks, and the database is updated every week.

What to Do Now

My first piece of advice is to go to PortfolioGrader Pro right now and create a unique username and password. Then, give your portfolio a complete checkup. It won't cost you a dime, and you can visit the site as often as you'd like. Look at the rating I give all of your stocks, and if any are rated D or F, I strongly urge you sell them right away. This is a very fragile market, and it's simply not worth holding inferior stocks "hoping" they'll rally. Despite what you may have heard, hope is not an analytical tool.

Many of the top financial stocks that have surprised Wall Street with massive write-offs were already rated as F's at PortfolioGrader Pro before the bombs went off. This has caused a big headache for value investors because the stocks that they thought were good values (high dividends, low P/Es) were really overpriced. Fortunately, we've steered clear of most financial stocks in my Blue Chip Growth Letter. I expect to see even more surprise write-offs over the next few quarters.

Focus on Key Sectors

Once you've sold off your D and F stocks, I recommend focusing on growth sectors, but only on the leading stocks in those sectors. The market will get increasingly narrow this year so it's important to own the top A-rated names in key sectors.

For example, one of my favorite sectors right now is defense and aerospace. This has been one of the best sectors of the past few years, and I don't see a slowdown coming anytime soon. The Spade Defense Index has not only beaten the market over the last eight years, it's beaten the market in each of the last eight years.

While the overall market is still wallowing along the bottom, one of my favorite defense stocks, Raytheon (RTN), has been breaking out to new highs. In less than six months, the stock is up over 24% for my Blue Chip subscribers. Last week, RTN flattened Wall Street's expectations by reporting quarterly earnings of 96 cents a share (after adjustments). The company also raised its 2008 EPS range from $3.45–$3.65 to $3.65–$3.80. I always like to see companies bump up their forecasts. It usually indicates a healthy company with confident management. In my Blue Chip Growth service, I currently recommend Raytheon as a strong buy up to $65 a share.

Another sector I like right now is solar power. In fact, on my Blue Chip Growth Buy List, I have three different solar energy stocks. One of my favorites is First Solar (FSLR). It's rated as an A on PortfolioGrader Pro, and it's one of my Top 5 buys for February.

The company is due to report earnings next Wednesday, and I'm expecting a huge earnings increase over last year. I wouldn't be surprised to see FSLR earned 60 cents a share, which is five times what in made in the same quarter one year ago. If you're looking to own, I suggest you get in before Wednesday's earnings announcement. FSLR is a buy for aggressive investors up to $205 a share.

That's all for this week. To summarize, I recommend you visit my PortfolioGrader Pro website to give your portfolio an extreme makeover. Any stock that doesn't measure up, should be sold ASAP. Invest any proceeds into leading stocks like Raytheon or First Solar. And finally, bookmark PortfolioGrader Pro and visit it as often as you'd like. You'll find it an invaluable tool in turbulent market environments.

Sincerely,

Louis Navellier

P.S. I'll be sending you next week's issue from the World Money Show in Orlando, Florida.  With the market as it is, it should prove to be an exciting show.  Attendance is free for investors. I hope to see you there.