Stock Market Video
Watching the Weather
This Week’s Fortune Cookie
In Case You Missed It
In this week's stock market video, Mike Cintolo tells us that Cabot's market timing indicators are back to positive, so you should be putting more money to work. He's seeing more divergencies, however, so the job now is to find fresh new leaders. Mike discusses stong stocks that he's been watching. Click below to watch the video.
Watching the Weather
As I write this, there is yet another winter storm churning its way up the East Coast to New England, promising a delicious combination of snow, freezing rain and just plain ice. I don’t know if this one will be tagged by the cable weather people with a name (stupid idea, anyhow), but it’s likely to make my commute back to New Hampshire very interesting. In fact, I’m going to try to leave early today to miss the worst of the fluffy stuff.
When I look at my favorite online weather site, there’s always a graph at the bottom of the page that charts the nice, neat temperature averages for the year. The highs and lows bottom out in January and peak in July, just like the calendar says they should.
But the reality is that a New England January can feature lows that are below zero or highs in the 60s. I’ve seen both, and sometimes in the same week!
People in New England generally take winter quite seriously, bringing the sweaters and wool pants down from the attic, piling on the layers of clothing and keeping snow boots by the back door.
And true Yankees know enough not to get their hopes for Spring too high after a day or two of January thaw. They dress according to the thermometer, but they manage their seasonal expectations by the calendar.
The takeaway from all this Yankee Magazine folksiness is that it just makes sense to manage your clothing choices, driving style and barbequing activities by looking at what’s actually going on.
And Cabot’s growth investing advisories—Cabot Market Letter, Cabot China & Emerging Markets Report, and Cabot Top Ten Trader—do exactly the same thing.
Cabot Market Letter just got a new buy signal from its market-following timing indicators, so the Letter advised doing a little buying.
Cabot China & Emerging Markets Report has had a negative timing signal from its investing universe since November. And while many of the Report’s stocks are doing well, we’re not doing any new buying until the market turns up and we get a new buy signal.
Mike Cintolo and Tim Lutts and I are pretty good stock pickers, and our roster of winners over the years is impressive, if I do say so myself.
But our records wouldn’t be so hot if we didn’t take our market timing so seriously. Having the trend of the market working in our favor makes us look much smarter than may actually be the case. It’s the wisdom of over 40 years of serious market experience that guides our decisions, including the decision to take things slow when markets are in a foul mood and put the hammer down when investors are pushing markets higher.
Investing when markets are kiting higher raises the probability that good growth stocks will do well, just as having the winds and tide at your back raises your chances of getting your sailboat out of the harbor and making progress. The general trend of the market is a good friend, and a relentless foe, so it makes profitable good sense to know when it’s one and when it’s the other.
So, it will probably be April before I even think about putting up my snow boots and parka. And even then, the New England weather will often go out of its way to make me second-guess my decision.
But the enforced patience of staying out of a down market and the goad to get back into a rising market will always be something growth investors will welcome.
Cabot market timing indicators will make absolutely sure that you never miss a major uptrend and never sit through a major downtrend. They’re like a weather guru for your portfolio.
Tim’s comment: Truly independent thinking is uncomfortable, and most people prefer the rewards of comfort, so they tread the well-worn paths of the masses. But it's independent thinking that builds world-changing companies like Apple, Netflix, Amazon.com and Tesla Motors. And it's independent thinking that has characterized the best investors, from Benjamin Graham to Warren Buffet.
Paul's comment: I knew a woman who worked in executive development in a big tech company who swore that top executives were really awake for only about 10 minutes in an average week. The rest of the time, they were gathering information or schmoozing or blathering about things. But for those 10 minutes, which usually involved having to make really big decisions, they were acutely alive and incredibly focused. If you really think about your investing once or twice a week, you're probably well ahead of the game.
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 Stock of the Month head Tim Lutts uses this issue to sing the praises of Tesla, the car and the stock (TSLA). Tim also gives the seventh in his series on disruptive stocks that break the rules in good ways. Stock discussed: LightInTheBox Holding (LITB).
Chloe Lutts Jensen, chief analyst of Cabot Dividend Advisor, writes in this issue about the income stocks that combine dividends and increasing stocks prices to pay out increasing amounts every year. Stock discussed: Ensco (ESV).
Proud new papa Mike Cintolo, the sage behind Cabot Market Letter, writes about the joys and challenges of caring for a newborn, contrasting the conflicting guidance he gets from friends, relatives, online opinions and professionals with the clear, simple buy and sell advice he gives subscribers. Stock discussed: ServiceNow (NOW).
Have a great weekend,
Chief Analyst, Cabot China & Emerging Markets Report
And Editor of Cabot Wealth Advisory