When the Chips Are Down the Herd Moves On
Stock Market Video
In Case You Missed It
As I mentioned the last two Saturdays, I'm going to spend the next couple of weeks highlighting some of our best advice from 2011 as a way to prepare for whatever the market hands us next. Today I'm going to focus on the third quarter, July though September, when the market plunged and entered the trading range that it's been stuck in for months.
I kicked off July by writing about some advice that I gave to my dad nearly two decades ago, but still rings true today: Be flexible! Read the issue here.
Cabot Market Letter Editor Mike Cintolo wrote about why you should concern yourself with the what, not the why when it comes to the stock market. Mike also discussed the importance of having conviction in your stocks and why you shouldn't operate from a position of fear. Read the issue here.
If you've never visited our website and taken the time to read about the history of Cabot, now is your chance. It's a very interesting story and I recommend reading it to get a better perspective on where Cabot came from ... and where it's headed. Read the issue here.
Cabot Publisher and Cabot Stock of the Month Editor Tim Lutts gave you six ways to avoid risk. This advice is really timeless and even worth printing out to refer to frequently ... it's that helpful! Read the issue here.
Cabot China & Emerging Markets Report Editor Paul Goodwin discussed the difficult work of selling losing stocks, writing "Growth investing is like gardening; if a plant isn't flourishing, you need to dig it out of your garden. Flowers may be romantic, but great gardeners are about as sentimental about their plants as killer whales are sentimental about seals. If it's a loser, sell it. Your growth portfolio will thank you." Read the issue here.
As summer marched on, I wrote about my mid-year investing resolutions. One in particular (Don't get caught up in the hype.) has been especially helpful in the second half of 2011 as we've been barraged daily with tales of economic woe from all over the world. Read the issue here.
Mike Cintolo discussed an often repeated phrase around Cabot: Don't fall in love with your stocks! Learning this important lesson can save you a bundle and help you make more rational decisions about your portfolio holdings. Read the issue here.
I wrote about the importance of taking breaks from investing in the market, especially when it's firmly negative. The message: Protect your capital. And your sanity. Your portfolio will thank you. Read the issue here.
Cabot Options Trader Rick Pendergraft wrote about one advantage of investing in options: It can leave you with less exposure to the market, especially during exceptionally volatile times. Read the issue here.
Dick Davis Digests Editor Chloe Lutts wrote about several rules she uses to guide her investing during stormy weather. Her advice is spot on and especially relevant right now. Read the issue here.
In early September, I introduced you to our newest investment advisory, Cabot ETF Investing System, which identifies major market sectors favorably positioned to beat the S&P, and then adds a market-timing element (Cabot Tides) to avoid intermediate downtrends. The best news? Back testing of the system revealed average annual returns of about 10% better than the S&P 500 ... so it may just be the investing method you've been waiting for! Read the issue here.
Paul Goodwin discussed the investing strategy popularized by Peter Lynch of buying the stocks of companies that manufacture products or provide services that you know and love. Read the issue here.
Cabot Benjamin Graham Value Letter Editor Roy Ward wrote about why investing in value stocks that also pay dividends can bring you greater investment success. Roy then discussed his 10 super companies that offer dividends averaging 2.5%. Read the issue here.
We celebrated the fourth anniversary of Cabot Small-Cap Confidential and I brought you a Q&A session with the editor, Thomas Garrity. Read the issue here.
Mike Cintolo finished up the quarter by writing about whipsaws, which we, and many investors, have been dealing with as the market has chopped around in a volatile trading pattern. Read the issue here.
That's all for this week! Tune in next Saturday for more of the year in review.
Here's this week's Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.
When the Chips Are Down the Herd Moves On
Nice illustration. But what does it mean? Recognizing that the phrase "when the chips are down" is from poker, and that it refers not to the time when the bets have been placed but to the time when your stack of chips has dwindled--when losses have been more prevalent than wins-it means that prolonged losses will cause the mass of common investors to abandon stocks. And that's what creates bargains for patient value-oriented investors who can see beyond the troubles of the present.
In this week's Stock Market Video, Cabot Top Ten Trader Editor Mike Cintolo says that the market had a rough week and the sellers gained some traction. But the big picture remains the same, with the market stuck in a trading range. Mike discusses some important levels to watch among the sloppy, choppy action. Stocks discussed: Baidu (BIDU), Priceline.com (PCLN), Intuitive Surgical (ISRG), Google (GOOG), Rackspace Hosting (RAX), MercadoLibre (MELI) and GNC Holdings (GNC). Click below to watch the video!
In case you didn't get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.
Cabot Wealth Advisory 12/12/11 - More on Pitt Bulls and Rottweilers
On Monday, Cabot Publisher and Cabot Stock of the Month Editor Tim Lutts published several reader responses on his previous issue about dogs, insurance and freedom. Tim also recommended an insurance stock for conservative investors. Featured stock: Reinsurance Group of America (RGA).
Cabot Wealth Advisory 12/13/11 - Four Market-Beating Dividend Aristocrats
On Tuesday, Dick Davis Digests Editor Chloe Lutts reviewed her Investment of the Week issues from July though last December. Chloe also discussed four outperforming Dividend Aristocrats that she originally recommended in April. Featured stock: The McGraw Hill Companies (MHP), The Chubb Corp. (CB), Abbott Laboratories (ABT) and Johnson & Johnson (JNJ).
Cabot Wealth Advisory 12/15/11 - Practicing Patience Pays
On Tuesday, Cabot China & Emerging Markers Report Editor Paul Goodwin discussed the power of patience to get you through a dark spell. And the power of having the right market timing indicators at your disposal. Paul also discussed a stock with a dismal chart that had a small blip up this week. Featured stock: SinoHub (SIHI).
Until next time,
Editor of Cabot Wealth Advisory