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Across My Desk: Louis Navellier's Weekly Marketmail



Louis Navellier always has an interesting point of view. What follows are some tidbits from this seasoned money pro's Oct.5, 2007, Weekly Marketmail e-mail:

"Expect a 25-basis-point cut at the October 30/31st FOMC meeting, and another 25-basis-point cut on December 11th.

Ever since, growth stocks have been on a tear, due to relentless institutional buying pressure, Wall Street has become obsessed with fundamentally superior growth stocks.

The exodus from value (79% of the equally-weighted S&P 500) into growth (51% of the normal-capitalization-weighted S&P 500) is accelerating, since everyone in the domestic money management business is scrambling to reallocate their portfolios so they do not fall behind the S&P 500.

We can confidently say that, for the next 12 to 18 months, growth stocks will outperform value stocks.... this style shift could last for several years. In fact, prior to the 2000-2006 value-biased cycle, growth beat value for six straight years (1994 through 1999), based on the Russell 1000 Value index versus the Russell 1000 Growth index.

The truth of the matter is that the stock market is a manic crowd.

Not only do we have another stronger-than-expected earnings season to look forward to in the weeks ahead, but we are also entering the seasonally strong time of year when pension funding picks up. To demonstrate our point better, since 1997, the S&P 500 has posted an average gain of 7.6% in the fourth quarter, due to robust year-end pension funding.

The Fed also tends to keep the pump primed heading into Presidential elections, since the Fed relishes its independence and doesn't want itself or the U.S. economy to be the subject of the Presidential election debate."

This, again, all from Navellier and represents only his opinion... optimistic opinion that it is.


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