Does Your Portfolio Pass or Fail? (Free Test)
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Before you do anything else this morning, do this…
Open up your portfolio. Take a hard look at it. All the winners that make you grin and the losers that make you frown.
Their dividend payouts (or lack thereof). Your perceived quality of the underlying businesses. The volatility… the diversification… the whole shebang.
Now that you’ve looked at all of it, I want you to give yourself a grade.
“A” for an all-star portfolio that’s on the level of the investing greats… “C” for an account with room for improvement… and “F” for a portfolio that’s all-in on GameStop Corp. (GME) and AMC Entertainment Holdings (AMC).
Where do you think you stand?
Now, click this link. It will open up an email to me and the TradeSmith Daily team.
In that email, write down your grade…
But don’t send it until you read the rest of this post.
Here’s why I’m asking you to do this…
A Legendary Investor’s Life-Changing Project
In our network, one investing legend who’s been called “an icon among growth investors” by The New York Times, owes much of his outstanding success to a simple tool that he developed while he was still a student.
His name is Louis Navellier. And at his alma mater Cal State Hayward, he got an assignment that would change his life…
Tasked with creating a model portfolio that would mimic the performance of the S&P 500 index, he built one that could beat it… over and over again.
He didn’t do well on the assignment. But it didn’t matter. It’s how he got unprecedented access to Wells Fargo’s expensive and powerful mainframe computers to continue to build his stock selection models.
Hundreds of hours of research later, he isolated the key qualities that these super-performing stocks shared and developed a system for tracking them.
It was the foundation for the sophisticated algorithm he’s used to make over 1,400% for his clients over the span of one decade.
Throughout his career, he’s picked more than 675 double-your-money stocks and 18 “100-baggers” – stocks that have risen 10,000%.
Maybe it was the less-than-perfect grade he got on that assignment – he did like to get A’s in school – that inspired his stock-picking model’s final form.
Every one of the 6,000+ stocks he tracks earns a letter grade, based on the key metrics and datapoints he’s found are the best measures of a business’s success and a stock’s underlying momentum.
Stocks with the highest growth and business quality ratings get an “A.” And stocks with miserable ratings get an “F.”
Plus, this system boasts a unique feature…
With just a quick copy-paste, you can input your own portfolio’s holdings and get an average grade.
It’s like your personal report card for all your hard work of investing, no matter how long you’ve been at it.
I just ran my portfolio grade, and I got a B. Not bad, but could be better…
And the best thing? It alerted me to an F-rated stock lurking in my portfolio…
I’ll show you how to do the same thing at the end of this email.
And when I do, I want you to go back to that open email and put your Louis Navellier portfolio grade next to what you thought you had.
But first, I thought we could have a little more fun with the Portfolio Grader tool…
Have you ever wondered how high-quality some of the top portfolios in the market are? The S&P 500? Berkshire Hathaway’s portfolio? Maybe even the portfolio of one of Wall Street’s most successful billion-dollar growth stock pickers?
And what if we could create a portfolio with just the top stocks of all of these?
Today, we’ll answer that question… and show you how to answer questions just like it, all for free.
Grading the S&P 500, Berkshire Hathaway, and More
The first thing I had to know was how Louis Navellier grades the S&P 500 – the most widely owned and traded stock market index in the world.
You would expect the index to get an A, right?
Close, but no cigar. It gets a B – not quite what Mr. Navellier would consider the best of the best.
That means somewhere, there’s a group of stocks dragging the index down. And if you own any of them, you should strongly consider changing that.
Below are the top 10 F-rated stocks in the S&P 500, according to Louis’ system (there are many more)…
| Stock | Total Grade | Quantum Grade | Fund Grade | Top-Rated Competitors |
|---|---|---|---|---|
| Biogen Inc. (BIIB) | F | F | C | NVO LLY INSM INVA |
| Teleflex Incorporated (TFX) | F | F | D | KEQU ELMD CSTL BSX |
| VeriSign, Inc. (VRSN) | F | F | C | MMYT NFLX CHKP SPOT |
| J.B. Hunt Transport Services, Inc. (JBHT) | F | F | D | XPO SAIA WCN ULH |
| Keysight Technologies Inc (KEYS) | F | F | D | TRNS PH NVMI ONTO |
| United Parcel Service, Inc. Class B (UPS) | F | F | C | SGLY MATH AIRT JYD |
| Zimmer Biomet Holdings, Inc. (ZBH) | F | F | C | KEQU ELMD CSTL BSX |
| Enphase Energy, Inc. (ENPH) | F | F | D | FORM NVDA FN FSLR |
| Albemarle Corporation (ALB) | F | F | D | NEU HWKN LIN ECL |
| CarMax, Inc. (KMX) | F | F | D | WSM COST CVNA CASY |
As you can see, each stock gets an overall grade, as well as two specific grades on the Fund (or “fundamental”) and Quant (or “quantitative”) qualities.
In Portfolio Grader, the Quantitative Grade you see measures the buying pressure. The Fundamental Grade you see evaluates the stock’s fundamentals. Blend those two grades together, and what you get is the Total Grade. The Total Grade gives you my current buy, sell, or hold recommendation. A=Strong Buy, B=Buy, C=Hold, D=Sell, and F=Strong Sell.
In short, if you’re holding any of the stocks above, you should strongly consider getting rid of them. And if you’re looking for similar stocks that rate much better to replace them, take a look at the column at the far right for some ideas.
That clears out the landmines. So now that you’ve got a bit more capital on hand, where should you put it to work? Let’s look at Louis’ top 10 A-rated stocks in the S&P 500…
| Stock | Total Grade | Quantum Grade | Fund Grade | Top-Rated Competitors |
|---|---|---|---|---|
| Super Micro Computer, Inc. (SMCI) | A | A | B | DELL EBON HPQ HPE |
| Arch Capital Group Ltd. (ACGL) | A | A | B | WTM AIZ PGR RGA |
| Aflac Incorporated (AFL) | A | A | B | WTM AIZ PGR RGA |
| American International Group, Inc. (AIG) | A | A | B | WTM AIZ PGR RGA |
| Assurant, Inc. (AIZ) | A | A | B | WTM AIZ PGR RGA |
| Allstate Corporation (ALL) | A | A | B | CB HCI WRB ERIE |
| Amphenol Corporation Class A (APH) | A | A | B | CAMT CLS OPXS NVT |
| Brown & Brown, Inc. (BRO) | A | A | B | RYAN KINS WTW MMC |
| Boston Scientific Corporation (BSX) | A | A | B | CSTL BWAY ELMD KEQU |
| Chubb Limited (CB) | A | A | C | ALL HCI WRB ERIE |
Make special note of the overwhelming presence of insurance companies in this list. If you’re looking for quality, that’s where you want to be.
So, that’s a good look at the top and bottom for the S&P 500. But let’s zoom in a little bit on the cream of the crop – the portfolios that aim to outperform the market year after year.
We’ll look at two different styles of portfolio here. Warren Buffett’s Berkshire Hathaway and Bill Ackman’s Pershing Square Capital portfolios.
The former, a titan of conservative value investing. The latter, a tightly focused growth group. How do they shake out?
For Warren Buffett, with his 47-stock portfolio spread across energy, value names, and more recently Japanese firms, the portfolio gets a B. (Note, Buffett’s foreign holdings aren’t tracked in Louis’ Portfolio Grader, as neither over-the-counter listings nor ADRs are tracked.)
The top three holdings in this portfolio, all A-rated, are once again Chubb Limited (CB), Nu Holdings (NU), and T-Mobile (TMUS). These are the only three A-rated stocks in Buffett’s portfolio.
The bottom three are Diageo plc (DEO), Verisign (VRSN) – both F-rated – and Aon PLC (AON), which earns a D.
What about Ackman? His portfolio is much smaller, so we can easily share it in its entirety:
| Stock | Total Grade | Quantum Grade | Fund Grade | Top-Rated Competitors |
|---|---|---|---|---|
| Chipotle Mexican Grill, Inc. (CMG) | A | A | B | WING TXRH EAT DPZ |
| Canadian Pacific Kansas City Limited (CP) | D | D | C | UNP GATX NSC CNI |
| Alphabet Inc. Class C (GOOG) | B | B | B | MMYT NFLX CHKP SPOT |
| Alphabet Inc. Class A (GOOGL) | B | B | B | MMYT NFLX CHKP SPOT |
| Howard Hughes Holdings Inc. (HHH) | F | F | C | MLP LPA FOR AXR |
| Hilton Worldwide Holdings Inc (HLT) | A | A | C | IHG MAR RCL H |
| Lowe’s Companies, Inc. (LOW) | D | D | D | HD TTSH BLDR FND |
| Restaurant Brands International, Inc. (QSR) | D | D | B | CMG EAT WING TXRH |
The three D’s and F’s in Ackman’s portfolio – HHH, LOW, and QSR, are very noteworthy. As are the two lone A-rated stocks, HLT and CMG.
Between these four lists, we can construct an extremely high-quality portfolio that hits on both value and growth. One that, as it turns out, has actually beaten the S&P 500’s average return over the past 10 years. (Note, NU’s recent listing in 2022 excludes it from the list of 10-year average returns):
| Stock | Total Grade | Quantum Grade | Fund Grade | 10-Year Average Annual Return |
|---|---|---|---|---|
| Hilton Worldwide Holdings Inc (HLT) | A | A | C | 16.96% |
| Chipotle Mexican Grill, Inc. (CMG) | A | A | B | 18.63% |
| Super Micro Computer, Inc. (SMCI) | A | A | B | 42.11% |
| Arch Capital Group Ltd. (ACGL) | A | A | B | 17.98% |
| Aflac Incorporated (AFL) | A | A | B | 13.73% |
| American International Group, Inc. (AIG) | A | A | B | 5.59% |
| Assurant, Inc. (AIZ) | A | A | B | 11.85% |
| Allstate Corporation (ALL) | A | A | B | 12.86% |
| Amphenol Corporation Class A (APH) | A | A | B | 19.89% |
| Brown & Brown, Inc. (BRO) | A | A | B | 20.71% |
| Boston Scientific Corporation (BSX) | A | A | B | 19.70% |
| Chubb Limited (CB) | A | A | C | 11.97% |
| T-Mobile US, Inc. (TMUS) | A | A | C | 18.27% |
| Average | 18.20% | |||
| S&P 500 ETF (SPY) | 12.78% |
Where the S&P 500 has returned an average of 12.78%, this mix of insurers, communications stocks, semiconductor makers, and fast-casual dining has returned almost 50% more, at over 18% per year.
If you have tools like this on your side, you’re easily able to isolate the top-quality stocks in the market and only hold them.
I invite you to put your own portfolio into Louis’ free Portfolio Grader tool right here. Just take each ticker and type it in with a comma to get your personal report card.
Then be sure to finish up that email and send it on through… letting us know what you learned about your holdings.
Did you find any landmines? Any A-rated stocks that you don’t hold enough of? Write us at [email protected] and let us know.
And there’s something else you should know…
Louis uses this same grading system to recommend stocks to his subscribers across multiple market sectors and size classes.
Right now, Louis is rightfully focused on the megaboom in AI stocks – what he’s calling The Real AI Boom – but not the typical headliners you’re tired of hearing about. He believes that the gains we’ve seen so far in outperformers like NVDA and SMCI are just a drop in the bucket. (And he should know – he first recommended NVDA 20 years ago.)
Those chipmakers were just the first generation of AI. That’s not where the big money will be made.
Sounds crazy, but listen, if you followed Louis into this “Real” AI Boom earlier this year, you could’ve booked six times your money.
I told you, this guy’s stock-picking system is the real deal.
And in a recent research presentation, he provided the details and ticker symbols on two high-quality growth stocks that everyone should keep an eye on, completely free – after he debriefed viewers on The Real AI Boom.
Check out the replay of Louis’ free briefing right here.
You won’t want to miss this.
To your health and wealth,
Michael Salvatore
Editor, TradeSmith
P.S. One final note…
A limited version of Louis’ Portfolio Grader is 100% free to use. But paying subscribers get a whole lot more functionality with their membership:
The ability to save and edit portfolios to review later with updated data
Access to Louis’ weekly ratings reports for top sector movers, the best conservative value names, and major warning sign stocks to sell ASAP
A breakdown of the formula that makes up Louis’ grading system
To learn more about how to get full access, go right here.