This week on our Masters in Business podcast, we speak with Louis G. Navellier, Chairman and Founder of Navellier & Associates, managing $2.5 billion in assets.
Navellier began researching stocks for a project in college, working to create a less expensive alternative to the S&P 500. The goal was to find a subset of about 300 holdings (out of and instead of the full 500) that would match the performance of the broader index, but would be cheaper to maintain due to its smaller size.
He ran into a problem with the project: The screening criteria he had developed was accidentally outperforming the S&P500 index. Normally, tracking error is a bad thing, but this sort of positive differential killed the idea of creating an index alternative — but it launched Navellier’s career as both a newsletter writer and an asset manager.
In our conversation, Navellier discusses why people overemphasize the impact of the Fed (“It is what it is”), explains why quality, value and dividend stocks beat the flavor of the moment. He also names the “End of Decimalization” as the single most significant market change over the past 30 years, creating all manner of unsystematic risk in executing trades.
Next week we speak with Jack Schwager, author of the seminal Market Wizards books.