The Suit Interviews Timothy Lutts

The Market Watchers
Reprinted from The Suit, October/November 2013
By Diane Alter

Investment newsletters are a dime a dozen. And finding a good one is akin to finding a diamond in the rough. Without question, there are plenty of investment newsletters acting more like PR firms, each touting a single stock. We’ve all seen them in our inboxes and mailboxes. Luckily, most of these wind up in the trash.

There are, however, esteemed investment newsletters offering invaluable, objective advice based on in-depth research. Cabot Market Letter is one of those. Founded in 1970 by Carlton Gardner Lutts Jr., whose straightforward good judgment and keen insight helped hundreds of thousands of investors build sizable portfolios based on great growth stocks, Cabot is now manned by Timothy Lutts.

President, Chief Investment Strategist and Chief Analyst of Cabot Stock of the Month, Lutts oversees one of America’s most respected independent advisory services, publishing a dozen newsletters read by some 250,000 global subscribers. All research is done in-house by Team Cabot – a well-versed and educated group of professionals.

“Our aim is to make readers better investors. We don’t simply tell them what to buy, we tell them why they should. People need to understand so they can think for themselves. Sure, we want to make our readers richer. But we also want to make them better educated investors,” Lutts told “The Suit.”

For the novice, unsophisticated trader with little time and discipline, Lutts agrees that ETF (Exchange-Traded Fund) investing is better and cheaper than investing in mutual funds. But he knowingly adds that they’re not nearly as much “fun” as investing in stocks.

A winning strategy that has served savvy investors well for decades is removing emotion from investing. To be sure, the best investors base their trading decisions on reason rather than emotion. “Psychology plays a big part in investing,” Lutts shares. “Scores of studies show that when people are the most euphoric, they should actually be the most fearful and vice versa. Understanding this cycle of emotions helps investors manage their responses to market gyrations and remain firm in their financial goals – even in times of uncertainty. That’s an area in which we excel.”

Over the last five turbulent years, Cabot’s newsletter has returned an annualized 7.21% compared with a negative 0.66% for the broad-based Wilshire 5000. Moreover, over the past 15 years, Cabot has logged a 6.94% annualized return versus the Wilshire’s 5.25%. Those are some pretty impressive bragging rights.

Internet and social media sites have also provided lucrative platforms for Cabot. Indeed, being able to get news out quickly and efficiently is crucial in today’s investing environment, where milliseconds can cost a bundle.

Looking forward, Lutts says the goal is to keep his company growing and to keep doing what he does best – give great investment advice.

Stock Picks

Tesla Motors

If Tesla ever begins to cut back on development and innovation costs, earnings will soar.


China seems to be raising up its very own version of Amazon in Alibaba (BABA.


Roy Ward uses the PEG ratio to determine if the stock is undervalued or overvalued.

Cabot Wealth Advisory

Three Vital Tips for the Chinese Stock Market

By Paul Goodwin on September 30, 2016

As U.S. stock markets continue to drag, the Chinese stock market is an ideal alternative for growth investors. Here's how to find the best Chinese stocks.Read More >

What Fed Speeches Mean for the Stock Market Today

By Chloe Lutts Jensen on September 29, 2016

Four Fed presidents gave speeches yesterday, and every word was digested by the stock market in an attempt to better predict the Fed’s next move. With odds of a December rate hike now about even, how should stock investors prepare?Read More >

The Emerging Market Stock You Ought to Own

By Paul Goodwin on September 27, 2016

The company I’m talking about (the one that you probably don’t own) is the largest Chinese instant messaging company. It is a giant in its own right, with a market cap of $262 billion and annual sales of over $19 billion. The company grew revenue by 28% in 2015 and routinely boasts after-tax profit margins over 30%.Read More >