Stocks Rise and Fall

Stocks Rise & Fall over Greece’s War of Words over Debt Plans

by Louis Navellier

June 30, 2015

The Dow and S&P 500 each lost about 0.4% last week, in a see-saw manner, reacting to various ups and downs of the Greek debt crisis. First, Greece “blinked” and offered to cut pension benefits, which the International Monetary Fund (IMF) had demanded.  Although Greece did not offer to cut pensions as much as the IMF demanded, it was a significant move, since it lifted investors’ hopes that the country’s debts will be successfully restructured and their fiscal problems will be further kicked down the road.

Superimposed Greek Flag and Euro Currency ImageThen, Greece abruptly walked away from negotiations on Wednesday. Greek creditors demanded that they submit an acceptable plan by Thursday night; otherwise the euro-zone finance ministers would give Greece a “take it or leave it” offer.  Despite this ultimatum, the European Central Bank (ECB) still kept providing liquidity to Greek banks, which are experiencing outflows of up to 1.5 billion euros a day. (Last Saturday, more than one-third of Greek ATMs ran out of cash, as long lines formed at many bank ATMs. Then, on Sunday night, Greece announced that they would not let any banks open for business Monday.)

Last Friday, Greek Prime Minister Alexis Tsipras called for a surprise referendum on July 5th, in which Greece’s citizens would vote on whether or not they want to comply with euro-zone and IMF demands of significant pension cuts and other austerity measures. Apparently, Prime Minister Tsipras, who ran on the promise of no pension or austerity cuts, wants the citizens to vote again on his previous election promises.

Due to this surprise referendum, Germany and other major euro-zone countries have ceased negotiations.  As of today (June 30), Greece owes the IMF 1.55 billion euros ($1.73 billion). It appears that Greece will likely miss today’s deadline.  However, according to the IMF, missing a payment does not constitute a “default”! The loan is “delinquent.” Clearly, with the IMF saying that missing a substantial payment is not a default and with the ECB still pumping money into Greece’s banks, they have bent over backwards to rescue Greece.

Who knows how long Greek banks will stay closed? It’s possible that the Greek referendum could end the crisis or signal a Greek exit from the euro-zone. If the Greeks vote to accept austerity, the crisis could be over, but if they reject austerity, the crisis will escalate and the next step may be for Greece to exit the euro-zone and return to the drachma or the Russian ruble – which could also devalue their pension plans.

In This Issue

With the end-game of the Greek drama possibly approaching, Ivan Martchev will handicap the Greek vote and the chances for a last-minute stay of execution.  Then, he will perform the same analysis on China, with some chilling conclusions. In Growth Mail, Gary Alexander will look at some popular books that focus on fear and index funds vs. his preferred outlook of optimism and stock selectivity.  Then I’ll return with a rundown on the generally positive U.S. and global economic statistics released last week.

Income Mail:
“Free Gyros for All”
by Ivan Martchev
Even Homer Would Have Been Proud
China’s Markets are Skating on Thin Ice

Growth Mail:
Two Investing Books You Don’t Really Need to Read
by Gary Alexander
A Better Approach – Selectivity and Optimism
Three New Articles Attack Index Funds

Stat of the Week:
First-Quarter GDP Revised “Up” to -0.2%
by Louis Navellier
Most of Last Week’s Other Indicators were Positive
Europe Recovers While China Struggles

Income Mail:

“Free Gyros for All”

by Ivan Martchev

The real-life reincarnations of the movie version of taverna proprietor Mr. Gus Portokalos in Athens must be terrified because they are surely thinking that communist offshoot Syriza is going to make their gyro sandwiches free. They are probably wondering how they will be able to keep those tavernas churning out gyros if there is no money coming in the door – it costs quite a bit to keep their grills burning. In my opinion, if you ask Greek citizens if they would rather get an unlimited free supply of gyros, or go to work, make money, and then wait in line to pay for their gyro sandwiches, most are likely to choose the free gyros.

Greek Prime Minister Alexis Tsipras’ Syriza party is in effect calling for a free-gyros-for-everyone referendum on July 5. He will ask the nation if they agree to meet the conditions of the troika bailout necessary to keep the country going and to service its self-generated, unsustainable debt load. After all, isn't it tempting to get bailout funds interest-free so that Greece can continue to pay its pensioners with money that its economy has never been able to generate? Who can say no to free money?

Communism does not work. I know this since I grew up behind the Iron Curtain. Despite the numerous economic problems resulting from the fall of Eastern European communist governments, all such Iron Curtain countries are better off today than they were during communist times. I have no problem with generous pensions and affordable healthcare as well as social services, but there needs to be a system where the economy produces the necessary profits that can then be allocated to fund these plans.

Greece Debt versus Greece Gross Domestic Product Chart

Greece Govt. debt/GDP in percent (left scale), Greece GDP in billions of USD (right scale)

Source: TradingEconomics.com.

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

It is my belief that the Greek economy has never produced the necessary profits to keep the bloated public sector operating. A 2011 Bloomberg article tells us that the former chief economist of the ECB, Otmar Issing, did not mince any words by explaining that Greece was only able to join the euro through deception and the currency bloc’s leaders have been “too polite” ever since. When they came forward, the cutbacks in spending necessary to service the parabolic debt they had secretly engineered crashed the economy.

Even Homer Would Have Been Proud
--Income Mail headline, June 16, 2015

Last weekend, Randall Forsyth of Barron’s, who also thinks this epic drama would have inspired even Homer, reminded us that a famous U.S. investment bank had actually helped the Greeks hide their debts over the years through a series of derivatives transactions. I am wondering what the same investment bank would do at the moment, given the mess that those derivative transactions helped create.

It is a sad day for the cradle of Western civilization to be in a national state of denial. The majority of Greeks have consistently maintained that they want to remain in the euro-zone even when they elected a communist offshoot like Syriza to power. The majority of Greeks also want the required austerity policies to end—as evidenced by the Syriza election victory--and go back to the way they were doing business before. In essence, they want to have their (free) gyros and eat them, too. How can a country not understand that those are mutually exclusive conditions?

What happens next?

Euro Bund - Daily Nearest Line Chart

Source: Barchart.com.

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

Both bunds and Treasuries were under pressure Friday before the new referendum was called. They may be up next week as “Plan B” unfolds and the Grexit nears.

The problem with this referendum is that there may be no binding offer to vote on. How can you have a referendum held on July 5 for an offer with a June 30 deadline? The June 30 proposal may not be on the table as of July 5th. The offer may be withdrawn, so to speak, so there could be nothing to vote on.

The other issue is the banking system, which only operates at the mercy of the ECB. However much they want to be seen as apolitical, the ECB has a major decision to make this week. The Greek banking system cannot operate without the ECB’s $89 billion lifeline, which may top $100 billion in the run-up to the referendum if the ECB keeps the monetary spigot running. What happens if the ECB decides to stop funding Greek banks next week? Would Cyprus-style closures of Greek banks affect the referendum?

Euro United States Dollar - Daily OHLC Chart

Source: Barchart.com.

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

In my opinion, a move below US$1.08 on the euro next week may suggest that a second leg lower in the euro has started, which may carry all the way to parity. The common currency is in a precarious situation where it seems destined to decline with or without Greece. The ECB is accelerating QE while the Fed is mulling how to unwind its balance sheet as well as figure out the dynamics of quantitative tightening. I think the most likely outcome of these multi-speed central bank policies is a lower euro. Add to that the amateurish actions of the Greek prime minister and other political dynamics that add to the negatives stacked against the euro.

It promises to be a very exciting week.

China’s Markets are Skating on Thin Ice

May you live in interesting times.”

         -- A Chinese Curse

Years ago, I personally experienced what it feels like to walk over thin ice when it seemed like a great idea to stroll over a frozen lake and reach the island that lay in the middle of it. After looking on the other side of the island and discovering that the lake on the other side was not fully frozen, walking back to shore was not a pleasant experience. Every sound seemed like the crack that leads the ice to open.

Investors in mainland Chinese stock markets must have felt the same way last week as a much bigger shakeout appears to be in the offing.

Shanghai Composite - Daily OHLC Chart

Source: Barchart.com.

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

While I don’t consider myself a chart connoisseur, I do think that most futures traders know very well how to read charts. This daily chart of the Shanghai Composite shows the proverbial “head and shoulders” peak (implying a market top) in red and a much bigger head and shoulders top forming (in blue).

I put this in writing over a year ago before the bubble run in the Shanghai Composite started. I explained that the Chinese economy is operating on record financial leverage at a time when the real estate market has rolled over from record highs. This is a situation similar to Japan in 1990 or the U.S. in 2008. The fallout may be contained in America – as Japan in 1990 did not spill over into the U.S. markets – but I think China is experiencing a hard landing. It is possible that we will see a really bad recession there, bordering on a depression, as typically the deflating of a credit bubble takes years, not months.

While Chinese economic numbers have shown consistent deterioration all year, it appears that the Chinese authorities decided that they could substitute one bubble (in real estate) for another (stocks). As the real estate market kept deflating over the past year, the stock market kept inflating. In my opinion, the Chinese authorities even added fuel to the fire by loosening mainland investors’ trading quotas for Hong Kong stocks, which got the local exchange going, too.

Bloomberg’s March 31, 2015 Article entitled, “China’s Investors Open Record Trading Accounts Amid Stock Rally” tells us that the Chinese stock market is driven by new entrants and financial leverage. Based on those indicators, I expect that it may crash. It may be crashing already. But here I have to make a very important distinction. There are many well-run Chinese companies with pristine balance sheets. Do not confuse negative macro fundamentals in China at present with well-run Chinese companies. A well-run company can be facing a hostile macro environment. It is how those two affect each other that needs to drive one’s investment outlook.

Shanghai Composite - Monthly Nearest OHLC Chart

Source: Barchart.com.

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

That said, looking at the Shanghai Composite from a longer-term perspective on a monthly chart (above) we don’t yet see the typical sharp move lower, followed by a rally that fails to make a new high, after which a stock market may tend to unravel in the classic bubble mode. You can see those unraveling patterns in the NASDAQ 100 monthly (below) and the Shanghai Composite monthly charts (left peak, above).

E-Mini Nasdaq 100 - Monthly Nearest OHLC Chart

Source: Barchart.com.

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

The Shanghai Composite does show a different topping pattern – an outside-down month  in June – which simply means that the index rallied to make a new 52-week high in June, surpassing the May highs, and then sold off aggressively to take out the May lows, which happened this week. In my opinion, the odds for a big unravelling in China’s stock market increased notably.

Two major financial events – the culmination of epic Hellenic political stupidity, which undermines the foundation of the common European currency and the EU, and a crash in mainland China stocks – don’t often come at the same time, but we could see two major financial events on two continents unfold soon.

Growth Mail:

Two Investing Books You Don’t Really Need to Read

by Gary Alexander

The latest (July) issue of Money Magazine featured an article entitled, “The Only Two Investing Books You Really Need.”  The subhead explains the reasoning behind that audacious headline: “Two investing classics, Burton Malkiel’s A Random Walk Down Wall Street and Robert Shiller’s Irrational Exuberance, have just been reissued with fresh commentary about today’s markets.  They disagree about some pretty basic points – but together deliver all the deep wisdom you’ll need to reach your financial goals.”

I’ve read both books and I commented on them last February.  They are indeed valuable, but are they the only books with “all the deep wisdom you’ll need”?  Not exactly. They’re far too cynical and pessimistic for my taste.  Malkiel basically advises index funds and Shiller warns you about when the market gets too high.  They each play into an investor’s fears, from two different angles – the fear of underperforming the market and the fear of holding stocks in a major market downturn.  Where is the plan for superior profits?

A Random Walk argues, according to Money, that markets are so “efficient” that “even the very smartest pros shouldn’t be able to beat the market consistently.”  Malkiel shows “how hard it is for anyone to get a trading edge,” so an investor’s best solution is “buying an index fund.”  In the original 1973 edition of A Random Walk Down Wall Street, index funds didn’t yet exist, but Malkiel clearly envisioned their birth:

“What we need is a no-load, minimum-management-fee mutual fund that simply buys the hundreds of stocks making up the broad stock-market averages and does no trading from security to security.”

Very soon, Vanguard gave birth to the first fund that tried to replicate the S&P 500, and now index funds dominate the industry. In my February 16 Growth Mail, I showed how Vanguard index funds dominate the top 10 fund list, “slurping up 57% of the dollars going into the fund industry,” according to the colorful imagery that appeared in Forbes Magazine (February 9, 2015 “Is Vanguard Too Successful?”)

Meanwhile, Robert Shiller says – in Irrational Exuberance – that market prices can soar irrationally high. In the book’s first edition (2000), Shiller showed how stock market valuations had become bubbly, while his second edition (2005) said that housing prices were wildly above historical norms. His new (2015) edition expresses concerns about the fixed-income market, as too many investors “seek safety in bonds.”

I critiqued Shiller’s Cyclically-Adjusted Price-Earnings (CAPE) ratio in my February 23 Growth Mail.  In short, Shiller’s frequent fretting over irrational exuberance can keep overly-sensitive investors out of the market at key buying opportunities.  Shiller has said that when his CAPE ratio is above 20, the market is often too expensive.  In March 2010, when this bull market was a year old, the CAPE ratio was already over 20. Alan Reynolds wrote in Investor’s Business Daily on March 12, 2010 that following Shiller’s over-20 rule would have kept you out of stocks every month “from December 1992 to September 2008.”

A Better Approach – Selectivity and Optimism

Superimposed American Flag and Fireworks ImageAs the July 4th holiday weekend approaches, we should remember that what makes America great is (1) free markets, based on competition, where the best rise to the top, and (2) an ability to meet calamity with creativity and a positive spirit – an expectation of success and growth, not a fear of market crashes and failure.  That’s why I don’t think these books contain “all the deep wisdom you need” to make money.

I’m looking for books that explain the opposite viewpoint – books which more accurately reflect our position at Navellier, something like “A Selective Walk down Wall Street” or “Irrational Pessimism.” 

A good start would be Dr. Jeremy Siegel’s “Stocks for the Long Run” in the updated 5th edition (2014).  Here’s my basic problem with the chronic fear-mongers: They tend to ignore opportunities, which are usually greater than the dangers.  As this chart shows, the market rises more than it falls. Since 1992, global market values have grown from $10 trillion to $70 trillion. The World Federation of Exchanges, a trade association of 64 of the largest publicly regulated stock markets in the world, has calculated that stock market wealth rose over 160% from March of 2009 to May of 2015, a gain of $43.4 trillion.

World Stock Market Capitalization Chart

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

In a world that is constantly changing, with major economies surging and then retreating, with specific company profits rising and falling, with business ideas popping up (and dying) in an orgy of creative destruction, why would anyone want to latch on to a random selection of blue-chip names (via an index fund) and then rely on the indexers to pick their stocks for them, blind to the realities in each company?

According to Nicholas Colas of Convergex, over $4 trillion in capital is benchmarked to just the Russell indexes. Index funds are so dominant that they have become the tail that wags the market dog.  In this week’s issue of Barron’s, Avi Salzman’s “The Trader” column begins: “After a somnolent week on Wall Street, volume kicked up Friday as traders placed rapid-fire bets on stocks affected by annual changes in the Russell indexes.” According to Salzman, Friday’s NYSE volume was the third highest this year.

Three New Articles Attack Index Funds

Since I wrote my detailed critique of index funds last February 16, some new research has come to light which makes my case even stronger.  Let me quote three of the most recent critiques of index funds:

First, on March 6, Joshua Kennon wrote about “The S&P’s Dirty Little Secret” on his blog. He ran down the various changes in the S&P 500’s index methodology in the last 15 years, including the purging of foreign stocks in 2002 and the “float-adjustment” change in 2005, which basically downplays companies in which insiders own too many shares and then buys more shares when those founders start selling!  Last year, there was another change, in which mortgage REITs (debt portfolios) were allowed in the S&P 500.

“The most damning part of all of this is the fact that had the new rules been in place throughout the lifetime of the S&P 500 – the removal of some of the highest-returning, super compounders like Shell and Unilever, the underweighting of high growth companies until the owners sold out, often at stock market peaks, the inclusion of de facto fixed income securities through REIT conduits – the historical compounding rate would have been lower. The old, mathematically-almost-guaranteed-to-be-higher-returning methodology is gone.  Yet, not a single one of the major S&P 500 index funds offers an adequate disclaimer on the page showing the charts and figures with historical total return performance explaining that the product the investor is buying today would have resulted in significantly different results had those same rules been used in the past.  Anywhere other than Wall Street, they’d call this type of behavior fraud.”

--Joshua Kennon, “The S&P’s Dirty Little Secret,” March 6, 2015

The next index fund review comes from Barry Ritholz in BloombergView, April 6. Ritholz says that the original idea behind cap-weighting was to overcome the bias of the Dow’s price-weighting system (in which companies with higher prices, regardless of size, have greater weighting in the index).  But he says that cap-weighting poses a problem when an index starts to fall at the end of a bull market:

“When markets go up 30% a year, casual investors tend to catch the fever. When unsophisticated buyers all pile into the same well-known mega-cap companies, regardless of valuations, the net result isn’t a surprise – a rapidly inflating bubble. This is characterized by a self-reinforcing cycle. When we have more buyers of these stocks, it increases the size of their market cap, which sends the S&P 500 higher. At the same time, money managers who are obligated to match the index, send ever-more capital to the shares of the biggest cap companies. This tends to lead naive individual investors to chase the flashy names even more. The cycle will repeat – but not forever. Once the inevitable market top occurs and the reversal begins, what began life as a virtuous cycle turns into a vicious one. The reversal of the money flows out of the biggest cap stocks can be brutal. The index buyers race to catch up (or down), exerting more downward pressure.”

--Barry Ritholz, writing in BloombergViews, April 6, 2015

Finally, on May 8, Forbes published an article entitled, “Built for Marketing: Why the S&P 500 and Dow are Misleading Investors.” The author (Kenneth G. Winans, a California investment manager) critiques both the Dow and S&P 500 index structures.  For the Dow Jones Industrial index, he offers this critique:

“The Dow now contains 30 stocks. It is a price-weighted index, meaning stocks with higher prices have more influence in the index. At $198, Goldman Sachs Group (NYSE: GS) was recently carrying more weight than General Electric (NYSE: GE), with a price of $27.” *
* Note: GE’s market cap is currently almost three times that of the Goldman Sachs Group.

Also, the Dow is not an industrial index any more. There is only one basic materials company in the list (DuPont) and no auto makers! There are two credit card companies in the Dow Industrials! Winans cites the Bureau of Economic Analysis (BEA) figures which say that the industrial sector accounts for 37% of the GDP, yet our vibrant industrial economy gets scant coverage in the Dow industrials.

The S&P 500 index is cap-weighted, which means that nearly half of its weighting comes from just 50 of the 500 stocks. The weightings can change based on market conditions.  The biggest stock carries 197 times the weight of the smallest stock in the S&P 500.

Winans sees a basic danger in chasing the big boys – a preference for “fad” stocks and “hot” sectors:

“The market-cap orientation of the S&P 500 adds a built-in chase-the-herd bias.  During the tech boom of the 1990s, the index was skewed toward tech. During the mortgage boom of the 2000s, it was skewed toward financials.  We know what happened to those booms.”

As I said on February 16, real investors don’t cap-weight their portfolios. When investing in a large-cap stock, would you buy 100 times as many shares as a similarly-priced small-cap stock?  Not likely.  In addition, the S&P stock matrix changes quite often, which begs the question of how they choose stocks:

“Using the stated size and liquidity criteria for S&P 500 inclusion, I queried the database of YCharts, a Chicago-based financial analysis firm, to see how many companies theoretically could qualify for the list. My screen wasn’t perfect, but it came up with 835 stocks—hundreds more than are in the index. So that means the committee selecting the stocks has a pretty significant—and subjective—role in deciding the roster, and perhaps, the future course of the S&P 500 Index.”

--The last three indented quotes are all from Ken Winans in Forbes, May 8, 2015:
“Built for Marketing: Why the S&P 500 and Dow are Misleading Investors,”

Index fund investors are proud of achieving “guaranteed average” returns, but can these indexes really match the market with such arcane practices and random selections?  Besides, why aspire to be average?  We live in a real world that continues to reward the most prescient investors and analysts – not the robots.

Stat of the Week:

First-Quarter GDP Revised “Up” to -0.2%

by Louis Navellier

Docked Ships ImageOn Wednesday, the Commerce Department revised its estimate of first-quarter GDP growth up to a -0.2% annualized contraction, from the previous estimate of a -0.7% annual contraction.  Business investment contracted by 2% in the first quarter, the biggest quarterly decline since 2009.  Exports declined at a 5.9% annual pace (up from an initial estimate of a 7.6% decline) in the first quarter, while imports grew at a 7.1% annual pace (up from initial estimate of 5.6%), so trade remained a major drag on GDP.

The bad winter weather, the West Coast port slowdown, and a strong U.S. dollar were all cited as catalysts behind the weak GDP in the first quarter.  Two of those three factors – namely the weather and the port slowdown – are no longer impeding growth, and the dollar is rising at a slower pace than it did in the first quarter, so economists now expect the second-quarter GDP to improve dramatically.

Most of Last Week’s Other Indicators were Positive

On Tuesday, the Commerce Department announced that sales of new single-family homes rose 2.2% in May to an annual rate of 546,000, the highest level since February 2008.  April new homes sales were also revised up to an annual rate 534,000 vs. an initial estimate of 517,000.  May’s new home sales pace is now up 19.5% vs. May of 2014.  Homebuilder confidence is at a nine-month high.  Since construction is a big component of GDP growth, strong new home sales bodes well for second-quarter GDP growth.

Also on Tuesday, the Commerce Department announced that durable goods orders declined 1.8% in May, due largely to a 35% plunge in commercial aircraft orders.  Excluding aircraft and defense orders, however, durable goods rose 0.4% in May.  The April report was revised down to a 1.5% decline from an initial estimate of a 1% decline, due to soft business spending, which is down 2.6% in the first five months of 2015 vs. the same months in 2014.  Although business spending has been weak so far this year, it finally improved in May and I expect it to continue to improve in the upcoming summer months.

On Thursday, the Fed announced that consumer spending soared 0.9% in May, the largest monthly gain since 2009.  In the last 12 months, consumer spending has risen just 3.6%, so May’s surge was welcome.

Finally, on Friday, the University of Michigan/Reuters announced that its consumer sentiment index had a final reading of 96.1 in June, significantly higher than its preliminary estimate of 94.6 and a 5-month high.  A component measuring current conditions rose to 108.9 in June, up from 100.8 in May, while a barometer of consumer expectations increased to 87.8 in June, up from 84.2 in May.  So overall, it appears that consumer spending will continue to improve, which is great news for overall GDP growth.

Europe Recovers While China Struggles

Despite the Greek tragedy, the rest of the euro-zone is prospering. Markit announced last week that its composite Purchasing Managers Index (PMI) for the euro-zone rose to 54.1 in June, up from 53.6 in May, reaching the highest level in more than four years.  Meanwhile, China seems to be slowing down. The People’s Bank of China cut its benchmark interest rate and one-year deposit rate by 0.25% each and lowered its reserve requirement to banks with sizable lending to farmers and small businesses by 0.5%.

Clearly, China is trying to stimulate its domestic growth.  However, as central banks around the world continue to cut key interest rates, it may become harder for the Fed to raise U.S. interest rates, since that would just make the U.S. dollar even stronger as well as run counter to the trend in the rest of the world.


It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Click here to see the preceding 12 month trade report.

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 intended as an offer or 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.

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.

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None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation of any offer 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 reader should not assume that investments in the securities identified and discussed were or will be profitable.

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Marketmail Archives Trade Summary

It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Click here to see the preceding 12 month trade report.

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 intended as an offer or 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.

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 of any offer 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 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 you. 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. Results presented include the reinvestment of all dividends and other earnings.

Past performance is no indication of future results.

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 intended or 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 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 performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, 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. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

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