How to Know When a Bull Market Starts

 

Stock Market Video The Great Sports Illustrated Jinx

Stock Market Video

The Great Sports Illustrated Jinx

When It Looks Great It Is Too Late

In Case You Missed It

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In this week's video, Editor of Cabot Market Letter Mike Cintolo talks about the market's bullish upmove this week, reviews a ton of stocks (both growth names and cyclical names that are doing well) and gives some hints on how to structure your shopping list going ahead. Stocks mentioned include: Facebook (FB), Ensco (ESV), Qihoo 360 (QIHU), Bank of America (BAC), ARM Holdings (ARMH) and many others. Click below to watch the video!

cabot heritage, mike cintolo

The Great Sports Illustrated Jinx

When an athlete or a sports team winds up on the cover of Sports Illustrated, lots of fans assume that a loss is on the way for that team or athlete. Partly that’s because many folks—sports fans especially—have a sense that the universe is out to get them, and that success is always snatched away at the last minute.

To some extent, this makes sense. After all, every year there are 31 football teams that don’t win the Super Bowl, 29 baseball teams that fall short of victory in the World Series and 65 sets of dashed hopes in the wake of March Madness. Sports fans aren’t paranoid, they’re realistic.

Plus, there’s nothing like a smug sense of their own greatness to encourage athletes to take an opponent lightly. And a highly motivated team of underdogs can always knock off a complacently confident one, even if they are better athletes.

There is an equivalent phenomenon in equity investing, and that’s when an investor, business leader or even The Bull itself gets featured on the cover of Time Magazine. If you have ever wanted a goofy way to do market timing, the bull-killing potency of a Time cover appearance wouldn’t be a bad one. To put it in bumper-sticker form, the rule might be: When the Bull’s on the Cover, the Rally’s About Over.

Fortunately, even though the stock markets actually did quite well in 2012, many investors are still pessimistic, discouraged, disillusioned, depressed and disgusted. So, while the perpetual optimists are making money, the great majority of Americans just don’t believe it. (I’ll write more about this in my Tuesday Cabot Wealth Advisory.)

What’s more, they won’t believe it until The Bull is on the cover of Time. And you know what happens then.

I don’t want to be too obvious about this, but I should point out that if you had a way to know, with a high degree of confidence, when a bull market starts, you could make money with that knowledge. In fact, followers of the Cabot Market Letter’s market timing indicators have been doing just that for more than 40 years.

So if you really want to avoid the Sports Illustrated/Time jinx, you should probably give Cabot Market Letter a try. I’m just sayin’.

For details, click here. 

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When-It-Looks-GreatHere's this week's Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.

When It Looks Great It Is Too Late

Tim’s Comment: Another way of expressing the classic contrarian philosophy, this applies to both individual stocks and the market as a whole. Buying when all the news is rosy, and when everyone knows it, means you might be buying at a top. So you’ve got to anticipate the future, as professional investors do, and buy when there is still doubt in the air.

Paul’s Comment: Genuine bull markets aren’t all that common, and the earlier you get in on one, the bigger your profits will be. But many investors take way too long to jump on the bandwagon because the disappointment from the old bear market keeps them scared and discouraged. Those who only allow themselves to get optimistic after everyone else is already in the market will find themselves topping off the profits for the early birds.

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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 12/31/12—Advantages of Options Writing

Cabot Options Trader editor Rick Lehman writes about the advantages of option writing as a way to generate income when bond yields are low and rates are likely to rise. 

Cabot Wealth Advisory 1/2/13—Five Great Stocks for 2013

Cabot Ben Graham Value Report editor Roy Ward reviews results from 2012 in this issue and makes his predictions for 2013. Stocks discussed: BlackRock (BLK), Kroger (KR), Microsoft (MSFT), SPDR Gold Shares (GLD) and Walgreen (WAG).

Cabot Wealth Advisory 1/3/13—New Year’s Resolutions

In this issue, Tim Lutts, our president and editor of Cabot Stock of the Month, discusses the importance of education to investors, and announces the very educational Cabot Investors Conference that will be held August 14–16 in Salem. Stock discussed: First Solar (FSLR).

Wishing you and yours a happy and prosperous New Year!

Paul Goodwin
Editor of Cabot China & Emerging Markets Report
and Cabot Wealth Advisory

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more Growth Stocks


Paul Goodwin can be found on Google Plus.

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Cabot Wealth Advisory

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