Introducing New Limited-Subscription Advisory,

Cabot Small-Cap Confidential

Dear fellow investor,

Cabot’s new investment advisory, Cabot Small Cap Confidential, is designed to find high-potential stocks sooner.

Because the number one request from our readers over the years has always been that we find our great stocks sooner.

And now I’m finally able to do that!

Or rather, I should say that Tom Garrity is able to do that. Tom is the editor of this new publication, and his track record speaks for itself.

Take Hansen Natural (HANS). Cabot Top Ten Report first identified this as a strong stock in May 2004, when it was selling at a split-adjusted 3 1/8. If you’d bought then and held on until today, your profit would be 1,323%.

But Tom invested in the stock three months earlier, in February, when Hansen was selling at a split-adjusted 1.71. His profit (he still owns it today) is a mind-boggling 2,503%.

A lucky fluke? Not at all.

Tom also bought Halozyme (HALO), a small pharmaceutical company, in July of 2006—back when it was selling at 2.74—and today the stock is up 203%.

I’ll give you more examples later on, but first I want to tell you about Tom.

In short, Tom Garrity is a research junkie. He’s able to get these amazing results because he does research with a thoroughness most of us are incapable of. And he enjoys it! But achieving this independence took time.

Tom began his career on Wall Street--like so many other investors--by getting a degree in finance and then a Security Analyst License. And that got him a job with a major brokerage. Once there, Tom worked diligently while abiding by his personal set of cardinal rules. One: never sell a client an investment he wouldn’t position his own parents in, and two: never invest in a company without speaking with the principals of the company.

He spent weekends doing his own stock research, and during the week, he spent hours interviewing principals of the interesting companies he had identified. But his brokerage firm had its own research department, and eventually Tom was asked to give up his research in favor of promoting the firm’s own research.

Unwilling to compromise, Tom moved on to a venture capital firm specializing in raising money for technology and medical companies.

Once in the venture capital world, Tom took advantage of the knowledge of many of his former brokerage clients--many of them leaders in both the technology and medical fields. He learned to identify the key factors that make a business succeed…or fail. And he continued to refine his powerful interviewing skills, gaining the ability to determine how well a business was doing by gauging the principal’s mannerisms on the phone.

Before long, he was using these talents to grow his own investment portfolio. And since 2000, he’s been on his own, making a very comfortable living from his investments.

Here’s Tom’s track record:

Portfolio 1 – 580% compounded return over 7.8 years.

Portfolio 2 – 497% compounded return over 3.8 years.

Portfolio 3 –295% compounded return over 7.8 years.

Furthermore, Tom has been in the Marketocracy Investment Challenge for five years and his select portfolio has earned a compounded return of 601%.

How does he do it?

Tom Garrity fishes in a pond where most institutions don’t go – the small-cap pond. For the past 79 years, you see, small-cap stocks have achieved some of the highest returns of any stock group or asset class. Yet most of these stocks have no institutional coverage.

Why? Because most institutions have so much money that they need to invest in big companies to use it all. (There’s also the fact that’s it’s easier for analysts to walk where another analyst has walked before … there’s safety in numbers.) The result is that small companies are woefully under-researched. Under-researched, of course, often means undervalued, and Tom views this inefficiency as one of his primary means of generating oversize returns in the market.

He says, “Information is the most prized asset of any business. Finding that informational edge is my trademark for successful small-cap investing.” But he doesn’t buy just any under-researched stock.

He likes to buy the stocks of companies that are pioneers in their industry niche. In ideal cases, these young companies are providing the essential tools that enable a whole new industry to grow.

And he likes to buy right. He says, “To this day, I only make investments where the odds of winning significantly outweigh the risk of losing. Whereas most investors before investing determine the upside potential in a stock, I selectively balance the risk of the investment first.”

In practice, this means he typically buys stock before they’ve started their up-moves. That often means he then has to wait a while to realize the fruits of his research. But the wait is worth it!

Because the long-term result is winners like these:

• Bolt Technology (BTJ) – Bought 10/25/04 at $4.24. Now $40.92
• Jones Soda (JSDA) – Bought 6/9/04 at $2.68. Now $10.97.
• Vasco Data Security (VDSI) – Bought 9/8/04 at $1.96. Now $31.11
• Versant (VSNT) – Bought 12/9/05 at $5.17. Now $22.01

Part of these great gains reflects fundamental progress at the companies themselves, but part of it has come because Wall Street has slowly become aware of these companies and initiated coverage.

In a nutshell: When Tom finds these companies, they’re often low-priced and they’re often thinly traded. But as Wall Street takes notice, trading volume rises, and prices rise, too!

Moral: There’s great value in distancing yourself from Wall Street, especially if it means you can buy a stock earlier and cheaper.

Says Tom, “I’m never in competition with the movers and shakers of the street. I like to keep my work under wraps. The less noise you make about your investment themes and ideas, the longer you can exploit the mastery of your investment plan.”

Which brings me to a unique feature of Cabot Small-Cap Confidential: It will only be made available to 500 subscribers.

That’s a very small number for us. I know we could sell many thousands of subscriptions to this service. But if I set hordes of investors pushing around the stocks Tom has so diligently uncovered, I’d just push the stock prices up…temporarily. And I want you to buy these stocks when they’re cheap! So I’ve agreed to limit the publication’s circulation.

What do you get when you become one of the 500 subscribers?

• An introductory packet including a Special Report, “Tom Garrity’s Ten Rules for Investing” and a guide to how you can best use the advice.

• A thorough (very thorough) fundamental analysis of one stock on the first Friday of every month. This includes an overview of the industry, an examination of the company’s main product or service, an analysis of the competition, a recommend buy range and more.

• An email update – every Friday that will review all current recommendations.

• Access to a subscriber-only web site that you can check from anywhere in the world, at any time.

• The ability to e-mail Tom Garrity himself at any time if you have any further questions about his recommendations. (That alone may be worth the price of the whole package!)

Unfortunately, it's no longer available!

We reached our 500-subscriber limit just two weeks after our initial announcement.

Still, I know that slots will become available in the future so I'm building a wait list. When spaces become available, I'll fill them from the wait list—first come, first served.

To sign up now, simply click the link below, and we will get in touch with you as soon as space becomes available.

Add me to the waiting list now.

I look forward to helping you become a smarter, savvier, and wealthier investor.

Timothy Lutts
Publisher
Cabot Small-Cap Confidential

Click now to be added to our waiting list: https://secure.netatlantic.com/cabot/cscweb.html

Cabot Heritage Corporation
176 North Street • Salem, MA 01970

October 2007