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.

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


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


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

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