| Emotions and the Stock Market Should Never Mix An important, often overlooked step that is crucial to becoming a great investor is understanding why we make the decision we make. Take this situation for example: Say something dramatic happens on Wall Street. A lot of folks like to play the “blame game.” It can get very philosophical. But I’ll let you in on a secret: At the end of the day, the culprit is almost always the same… Emotions are what’s driving our behavior. That’s true today, and it was true in 100,000 B.C. Imagine you and your hunter/gatherer tribe are out and about... moving to a place with more fresh water. On your way, you see three dozen terrified members of your neighboring tribe running for their lives. It’s a human stampede. Your instincts will tell you to run like the wind. Your instincts will say there’s a good reason three dozen people are running for their lives. It doesn’t matter if you can’t see a saber-toothed tiger or a rival tribe with spears... you just know it’s time to run. This reason - survival - is the core reason why humans find comfort in crowds. It’s how we survived in the wild and became the dominant species on Earth. To this day, we know having your own crowd - your family, friends, and coworkers - leads to longer, better lives. However, the desire to be part of a crowd can kill your stock portfolio. Going your own way can save it. Bottom line: The human brain is a marvelous tool for creating art, music, language, and engineering feats, but it’s a terrible tool for investing. The more you know about the workings of your own mind, the “bugs” inside it, and how they work against our investment performance, the more you can develop strategies to mitigate the negative effects of those bugs. In today’s Market360, I’ll detail Crowd-Seeking Bias, how it works, and how you can neutralize its negative effects. The Problem with Crowd-Seeking A lot of you are probably fans of momentum investing. The truth is, I am, too. You always want to capitalize on a trend, and trends are made up of people. But while following the crowd CAN result in great momentum plays...you don’t want to do so blindly. The crowd-seeking I’m talking about - follow the herd, think later - is responsible for a lot of failed investments. It means you won’t pick up on a shift in the trend. Thus, you’ll get your timing all wrong. You’ll often end up buying near the highs and selling near the lows. With Crowd-Seeking Bias, even the best investing ideas can become a losing proposition. The flip side is to be a contrarian. In other words, to buy the dip and sell the highs. As we’ve established, though, it goes against our instincts. That’s why everyone isn’t Warren Buffett. But you can get his level of returns (or better) by checking your emotions at the door - and sticking with a pattern that works. The premise is simple: Look for a company that’s still growing like crazy - in terms of sales, operating margins, and especially earnings. Whenever its stock experiences a sell-off...then that’s a great opportunity. And those fundamental factors are exactly what I’ve designed my system to detect. You only want the highest-quality companies, which my proprietary system has helped me find for over 40 years now. Operating margins, sales metrics, earnings projections...it all sounds pretty boring, I know. That’s exactly the point. These factors don’t activate your feelings. But now, I am breaking from the crowd even further. If you’ve followed my advice or my Market360 articles, then you know how important my system is. But recently, I’ve uncovered a radical new financial discovery using my quant-based systems. I call this initiative Project Lightspeed. With Project Lightspeed, I uncovered a technique to help find big gains that investors would have never thought possible in the short term. I’m talking about back-tested gains of 967%, 1,329%, and even 1,711%. And you can do it many times, in less time than it would take you with a normal growth stock. I spent hours using my proprietary system to assess loads of data, exploring one of the most profitable (and controversial) corners of the market. This is an area I’ve rarely – if ever – written or talked about before. Not a lot of people take the time to assess stocks this way - much less find a way to make short-term aggressive gains in the process. It’s a great way to beat the Crowd-Seeking Bias we discussed today...and end up with huge gains in half the time. Sincerely, 
Louis Navellier
The Editor (Louis Navellier) hereby discloses that as of the date of this email, the Editor (Louis Navellier), directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below: | 
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