Analysts Center | Paul Goodwin

 

Here are some excerpts from Cabot Emerging Markets Investor, which seeks to capitalize on the enormous potential in emerging market countries. Chief analyst Paul Goodwin, Cabot’s international investing guru, provides your passport to profits.


Paul Goodwin can be found on Google Plus.

Emerging Markets Trade Sideways

The EEM surged in mid-April and has now been trading sideways for a couple of weeks. Meanwhile, Chinese ADRs got a small bounce today that kept the PGJ above its 25-day moving average.»

Brazil Offers a Lesson on Emerging Markets

Emerging markets have a way of reminding us of why they are called “emerging.” And recently, Brazil has been doing the reminding.»

The Buy Signal is Clear

The Cabot Emerging Markets Timer continues to give a Buy signal, so we’re looking for opportunities to increase our exposure.»

Nice Recovery in U.S. and Emerging Markets Stocks

Both the iShares MSCI Emerging Markets ETF (EEM) and the Golden Dragon China ETF (PGJ) have experienced a quick pullback and a nice recovery.»

Watching for Stock Leadership to Develop

While the S&P 500 has been much stronger over the past year, iShares MSCI Emerging Markets (EEM) has actually pulled ahead since the beginning of March.»

Continuing Strength

The tone of emerging markets stocks has improved, as both the iShares MSCI Emerging Markets ETF (EEM) and the Golden Dragon China ETF (PGJ) have accelerated their rates of advance.»

Branching Out

We haven’t yet seen the kind of long-term rally in Chinese stocks that we need to achieve the outsized gains that will repay us for the extra risk we take on when we invest in emerging markets. »

Time to Do Some Buying

Investors seem to have digested the available information about the state of the national and global economies and the fortunes of growth stocks. »

Waiting for Old Friends

Just as in the U.S. market, much of the strength in emerging markets stocks has come from the bounce in stocks that have been taken off at the knees, not from expected future leaders. »

New Buy Signal, with Reservations

We have been enjoying an energetic uptick in stocks over the past few days. It’s a powerful move, although not yet decisive.»

Surviving the Bear

The Cabot Emerging Markets Timer, which looked last week like it might climb back on top of its moving averages, has now fallen back again.»

If Markets Hold Up ...

The next six trading days will see the worst of the January correction falling out of the 25-day moving average, so if markets hold up, we might get a new buy signal within a week or two.»

The Bad News is Out There

Any piece of bad news is like a bit of data entered into an enormous computer; it gets chewed up and added to all the other data and registered in the program’s output almost immediately. So when a piece of bad news hits the ticker, investing pros know that today’s reaction will be history by tomorrow’s open.»

Charts Say Play Conservatively

The crucial factor to watch right now is whether investors have stopped believing that the Chinese government has a plan to get its economy stabilized and growing again.»

Crunch

Skepticism and wariness seem to be the flavors of the week for many investors, and that’s part of a longer-term trend that extends far beyond the stock market.»

Things Have Turned Ugly

The iShares MSCI Emerging Markets ETF (EEM), which tried to bounce in mid-December, has been correcting hard, and is now nearly back to its August Meltdown lows.»

The Chinese Cliff Hanger

We don’t make forecasts about future events, but it’s a virtual certainty that the long-running story about the Chinese economic slowdown will remain in the headlines well into 2016. You can pretty much take that one to the bank.»

China Rally Continues

Chinese ADRs are continuing the rally that began in late September. That’s a welcome sign of strength from the biggest emerging market and speaks well for prospects in 2016.»

Fed Rate Hike Will Mean a Calmer Market

The Fed has finally (seven years!) taken the first small step in getting U.S. interest rates back to sane levels, and investors seem to be taking it the right way.»

China Market is Beating Them All

Surprisingly, PowerShares Golden Dragon (PGJ), which tracks most Chinese ADRs that trade on U.S. exchanges, continues to beat them all.»

Global Headlines, Local Gains

This week, the biggest news about China is the decision by the International Monetary Fund (IMF) to add the yuan to its list of global reserve currencies.»

Still No Consensus on Global Outlook

The Fed seems pretty certain to begin raising interest rates in December, but very little else is assured.»

Stock Selection and Flexibility are the Keys

We’re trading the best and leaving the rest (stock selection), while also having mental stops on most of our holdings, even if they’re acting well today (flexibility).»

Genuinely Significant News from China

The first news is that sales on China’s Singles Day (November 11) were up 60% from last year, making this sales event bigger than Black Friday and Cyber Monday combined.»

The China Bounce

If you want a good illustration of how quickly the stock market can digest bad news and beg for more, you just need to look at what’s happening with Chinese stocks.»

Emerging Markets Timer in Positive Territory

Many economic analysts see this as a fragile market rally, vulnerable to bad news, but what we see is a market that’s advancing. »

Business as Usual

Right now, enough investors are confident enough that China’s economy is doing well enough that they’re maintaining their exposure.»

Supporting Demand

In effect, GDP growth is the most valuable commodity in the world right now, and most countries are working to make it happen. And the preferred method for growing GDP is stimulating consumption.»

The Market May Have Found Support

It’s impossible to know how much of the Shanghai’s calm, flat trading is due to government buying, but it’s a reassuring pattern that’s typical of market bottom-building processes.»

Heeding the New Buy Signal

We have no predictions about the iShares MSCI Emerging Markets ETF (EEM)’s future movements, but we are heeding the new buy signal it has delivered.»

Still a Mess

while it looks like China’s program of active buying support for the Shanghai Exchange is keeping the exchange on an even keel, the other economic news out of China isn’t so hopeful.»

Stock Picks

Mattel

Turnaround situations can be a great place to find relatively low risk, high paying dividend stocks—and they’re usually a great value to boot.

Corrections Corp. of America

This REIT has paid dividends since 2012 and increased the dividend in each of the past three years.

Philip Morris

This non-cyclical consumer stock offers consistency and high dividends.

Cabot Wealth Advisory

Options Trading Lesson: The Company Is Not the Stock

By Jacob Mintz on May 03, 2016

Divorcing one’s personal beliefs from a company’s products and its stock can be extremely challenging. However, a look at the stock’s performance and options trading can go a long way to helping investors avoid their personal biases.Read More >

Burger Stocks: The Bubble Has Burst, and One Clear Winner Has Emerged

By Timothy Lutts on May 02, 2016

Burger stocks exploded last year. It started with the IPO of Shake Shack (SHAK) in January, an offering that was priced at 21, but began trading at 47. It was fueled by lots of hype about trendy private chains, like Five Guys, In-N-Out Burger, Whataburger, Umami Burger and Iron Chef Bobby Flay’s Bobby’s Burger Palace.Read More >

Another Dire Stock Market Prediction: Whoopee!

By Paul Goodwin on April 29, 2016

McKinsey & Company is a big consulting firm—9,000 consultants and 2,000 researchers around the world—that companies hire when they need advice. I get research reports from McKinsey every once in a while, and they’re usually beautifully designed, well written and interesting in an abstract kind of way. The report that reached my email in-box on Thursday had the intriguing title: “Why investors may need to lower their sights.” (Note how the avoidance of Capital Letters makes things a little edgier; that’s the McKinsey Difference!) It took seven people to write this little piece of analysis, so you know it must contain really valuable information. Read More >