A Value Investor’s View

 

As I was reading over the past weekend, I noted that many writers and analysts were predicting gloom and doom for the stock market. Everyone seemed to agree that weakening economic activity in China, Europe, Russia, Japan, Brazil and elsewhere is certain to bring down the economy in the U.S., and the U.S. doesn’t stand a chance of bucking the trend.

As further evidence, quarterly sales of U.S. companies have declined for four straight quarters, earnings have disappointed during the past two quarters, and the price of oil looks vulnerable because supply continues to exceed demand.

So investors were convinced that the rally that was so robust last week would soon end.

I’m not a die-hard contrarian, but when most investors agree on which way the stock market will turn, I have learned that that’s the time to go against the crowd.

Despite all the pessimism, the stock market took off like a rocket on Tuesday, March 1. The bulls came out in force, proclaiming that the nasty decline in 2016 is over, the double-bottom is in and the stock market is “all better” now.

The fast-money trading game is not my cup of tea. I have stubbornly stuck to my value approach, wherein I buy when stocks are undervalued and I sell when stocks become over-valued. My current allocation is 50% defensive conservative stocks, ETFs or cash, and 50% moderate risk stocks.

Speaking of conservative stocks, I have today added a great one to the Cabot Value Model. The company's amazing record of steady sales, earnings and dividend growth has led to super-steady gains in its stock price.
 

This is an excerpt from Cabot Benjamin Graham Value Investor, which features the very best undervalued stocks to buy right now. Chief Analyst J. Royden Ward tells you exactly which undervalued stocks to buy and when to take profits. This advisory is ideal for conservative investors.

Subscribers' comments on Cabot Benjamin Graham Value Letter

Headline News

Stock Picks

Shopify

Shopify (SHOP), which came public in May of last year, is a new leader.

Facebook

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

Amazon.com

For AMZN to be undervalued, the stock would need to fall to 393. 50.

Cabot Wealth Advisory

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 >

Tesla Model 3 vs. Chevy Bolt: Which Affordable Electric Car Is Better?

By Timothy Lutts on September 26, 2016

The Tesla Model 3 and Chevy Bolt are the first two affordable electric cars with a driving range of more than 200 miles. Let’s see how they stack up - and what they could mean to Tesla Motors (TSLA) and General Motors (GM) stock. Read More >

Does Alibaba (BABA) Stock Measure Up to Amazon (AMZN)?

By Paul Goodwin on September 23, 2016

Alibaba (BABA) is the Amazon (AMZN) of China. But does BABA stock measure up to AMZN stock? Let’s break it down!Read More >