It's Time to Be an Optimist: Reflections on Cabot's First 40 Years

July 28, 2010

Cabot Market Letter Editor Michael Cintolo tells why another bull move will come and with it, plenty of opportunities to make big money.

The title of our very first Cabot Market Letter was "It's Time to Be an Optimist," and we've been optimists ever since.

Since we began, we have seen more panics than you can shake a stick at—the first Letter actually came right as the terrible 1970 bear market came to an end. But then we saw the meltdown of 1973-1974 (including Watergate and the resignation of a President), the double-digit inflation and unemployment of the late 1970s, ballooning deficits in the mid 1980s, the 1987 Crash, the first Gulf War in 1990, the Mexican Peso and Orange Country debacle of 1994 and early 1995, the decimation of Long Term Capital Management and the Russian ruble in 1998, the popping of the Internet bubble in 2000, the terrorist attacks of September 2001, the wars in Afghanistan and Iraq (again) since 2002, the oil price spike of the 2005-2007 period and, of course, the historical panic of 2008, when the foundation of the world's financial system were shaken.

We've seen eight different Presidents (five Republicans and three Democrats), we've seen all kinds of Congresses, we've seen taxes go up and down, we've seen the U.S. dollar rally strongly and fall through the floor, we've seen mortgage rates soar above 15% and fall below 5%, we've seen historic economic expansions and drastic recessions, we've seen well-established companies fall by the wayside and we've seen newer, innovative firms take their place. We can't say we've seen it all, but we've seen a lot.

And you know what else we've seen? Throughout all of these various conditions, we've seen the Dow Industrials rally from under 600 to over 14,000! Even better, we've seen hundreds of young companies take Wall Street by storm, moving up many-fold over a period of a year or two as they offer a unique, revolutionary product or service. And we've been lucky enough to catch hold of a few of them.

Of course, during every rough period in the economy and the stock market we've also heard the calls that "this time is different," as the (debt bomb/housing bubble/emerging market bubble/trade deficit/you name it) is finally going to cause the economy to permanently capsize. But of course it hasn't happened. We're hearing the same cries these days, incidentally, and we believe the result (an eventual recovery) will be the same.

We learned long ago that America is truly unique—our economy is resilient, and the entrepreneurial spirit is very strong. That has led to the flow of new, exciting and dynamic young companies that offer investors a chance to materially boost their own wealth. Simply remember this: It definitely pays to be an optimist, because no matter how dark the outlook may seem, another bull move will come, and with it, plenty of opportunities to make big money.

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