by Jason Bodner

May 3, 2022

Time has a funny way of changing perception. For instance, treadmills were designed as forced labor machines in British prisons, but in the 1900s that was deemed cruel and inhumane punishment. Now, you can’t enter a gym without seeing lines of treadmills, and sometimes you must still wait your turn to use it.

Similarly, everyone wants cash, because “Cash is King.” Or is it?

When I worked on Wall Street, I put savings away for my three boys every paycheck. It wasn’t much, maybe $50 or so for each boy, but it went into savings accounts under their names and accumulated over time. After leaving my job, I forgot about those accounts. Recently, I checked, and they each had a few thousand dollars, but through the hidden tax of inflation, those dollars I saved are worth less today.

Since that time, stocks have skyrocketed in price, so putting savings in cash was a missed opportunity.

Last month, I put the boys’ cash into new brokerage accounts, waiting for the right moment to jump in. It’s not time yet, but it’s getting to be time. I am going to buy tech shares for them, with high conviction, but I won’t look at the bottom line on their account totals for at least the next few years. Here’s why:

Many tech stocks have reached silly lows, while many “safe” stocks are ironically obscenely expensive.

Fear of war and inflation shoved COVID out of the spotlight and have absolutely wrecked the tech sector.

Let’s view that conundrum by looking at the QQQ (NASDAQ tracking index). As of the April 26th close, the QQQ is down -21% for the year and exhibiting bear market nastiness, as shown in this chart:Big Money Stock Buys and Sells Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

But here’s the thing: I started saving for my boys around 2005. Even including the 2022 decline, the QQQ ETF is still +282% since then, while their cash has barely earned 1% per year since the crisis in 2008.

Big Money Stock Buys and Sells Chart 1

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Meanwhile, inflation grew far faster than interest: That cash I worked so hard to save for them is worth way less today. It takes $1.47 today to buy $1.00 worth of 2005 goods. That’s value eroding away!

Keep in mind that during those 17 years, we endured the Great Financial Crisis, the Flash Crash, a U.S. credit downgrade (2011), the Taper Tantrum, the first (2014) Russia-Ukraine war, Ebola, China’s Slowdown, the fear of negative rates, a trade war, government shutdowns, and COVID-19!Invesco QQQ Trust Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

That’s before all the crises we’re experiencing now!

The point is that there will always be something to fear. But what we should most fear is holding cash and just “waiting it out.” As I just showed you, in 17 years, my sons’ cash lost real value while tech stocks soared, so if “value” is what you seek to own and not pay too much for it, then you should look at tech.


The Case for Buying Tech Stocks

Imagine our future and ask yourself these questions. In five years:

  • Will you be less reliant on Siri and/or Alexa?
  • Will you be going back to relying more on Cable TV?
  • Will you use a word processor (if you even know what it is) instead of a laptop?
  • Will your computer be less powerful?
  • Will chips become slower?
  • Will our networking needs be reduced?
  • Will we need fewer (or slower) communications?

Naturally, the answer to all these questions is No.

Since November, some tech stocks have fallen between 50% and 80%! As scary as that sounds, and as unpleasant as it is if you are holding them, bailing out now (for cash or overpriced “safe” stocks) is guaranteed to perform worse over the long term. I’m no gambler. I only care about stocks with superior fundamentals – plus the vote of confidence from big professional investors. In other words, I don’t like to own crappy stocks, only good ones. And in this environment, where growth is being punished for fear of a slowdown, good stocks are getting mauled, too. Babies are getting thrown out with the bathwater.

Here’s an example of what I mean.

I went into my data and looked for tech stocks with superior fundamentals: profitable companies growing sales, earnings, with solid balance sheets. Then I screened for stocks with a Price to Earnings ratio of 20 or less. (P/E ratio indicates the premium shares are trading relative to the money companies earn.)

Tech stocks historically trade at higher P/E’s because they typically grow like weeds. I found 95 tech stocks with an average fundamental score of 75% out of 100, and an average P/E of 14.

This list excites me. There are phenomenal businesses in there. The list includes some biggies you already know… like Facebook, or Meta Platforms, Inc. (FB), now with a 14 P/E, and Netflix (NFLX, 17 P/E). Some smaller companies are significantly cheaper, but in contrast some “value” stocks reached nosebleed levels. For instance, Clorox has ho-hum sales and earnings growth and is loaded with debt, but is trading at a current P/E of 73. Even its forward P/E is 36x. That’s expensive. It’s not just Clorox. Many typically cheap household names are now expensive. Companies like Kraft Heinz (KHC), Walmart (WMT), Colgate-Palmolive (CL), PepsiCo (PEP), and Hershey (HSY) all have P/Es of 30 or more!

The world has flip-flopped. Investors are paying through the nose for value and ditching great tech companies to do it. Don’t be fooled: This won’t last forever. I bet it doesn’t even last through this year.

Recent tech price action may make you second-guess me, but on Tuesday, April 26th, the QQQ closed down 3.77%. That’s ugly indeed. I also saw 209 sell signals in my data, with zero buys. Now that’s rare. Since 2003, out of 4,863 trading days, that diversion only happened 113 times (2.3% of trading days).

On those days of 200+ sells and under 10 buys, here are the forward average returns of the QQQ:Map Signals QQQ Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Friday’s ugly close just makes the case even stronger, so if you’re worried about inflation or Russia or anything else, try to remember this: Your cash is guaranteed to fall in value, while history strongly suggests that shares in American businesses will rise in value.

If I could name one area that is being undervalued right now, it’s technology. If you do nothing else with your cash other than just buy the QQQ, you’ll be glad you did – a few years from now.

Buying tech certainly beats letting cash rot in a savings account – like I did from 2005 to 2021. Don’t make that mistake. As Gautum Adani said, “Either you sit on a pile of cash, or you continue to grow.”

Navellier & Associates owns PepsiCo (PEP) in managed accounts. A few accounts own Kraft Heinz (KHC), Walmart (WMT), Hershey (HSY) and Meta Platforms (FB) per client request only, in managed accounts. We do not own Colgate-Palmolive (CL), Netflix (NFLX) or Clorox (CLX). Jason Bodner owns Netflix (NFLX). He does not own Clorox (CLX), Kraft Heinz (KHC), Walmart (WMT), Colgate-Palmolive (CL), PepsiCo (PEP), Hershey (HSY) or Meta Platforms (FB) personally.

All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
Oil is in a Volatility Squeeze

Sector Spotlight by Jason Bodner
What’s the Best Value Now

View Full Archive
Read Past Issues Here

About The Author

Jason Bodner

Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation/distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner

Important Disclosures:

Jason Bodner is a co-founder and co-owner of Mapsignals. Mr. Bodner is an independent contractor who is occasionally hired by Navellier & Associates to write an article and or provide opinions for possible use in articles that appear in Navellier & Associates weekly Market Mail. Mr. Bodner is not employed or affiliated with Louis Navellier, Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made here are those of Mr. Bodner and not necessarily those of any other persons or entities. This is not an endorsement, or solicitation or testimonial or investment advice regarding the BMI Index or any statements or recommendations or analysis in the article or the BMI Index or Mapsignals or its products or strategies.

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.