Taking Charge of Your Own Portfolio

 

Stock Market Video

Taking Charge of Your Own Portfolio

This Week's Fortune Cookie

In Case You Missed It

Cabot’s office in Salem, Massachusetts, is located in a retired branch library a half a mile or so north of the Salem downtown. It’s a beautiful building with high ceilings, plenty of windows and walls lined with bookshelves.

And here on the analysts’ side of the building, those bookshelves are packed with books on investing, the result of a lifetime of collecting by Cabot’s founder, Carlton Lutts, and continued by his son Tim, who now runs things, and the analysts who work here. The books in this picture sit right in front of my desk, but they’re a little out of date for modern investing. (Although you might spot Reminiscences of a Stock Operator near the right of the middle shelf, and that’s a perennial favorite.)

The more recent books are closer to hand on our tables, because we actually read them! There’s a lot that doesn’t change in the stock market, but there’s also much that does, and we feel the need to keep up with the latest theories, predictions and techniques that show up in a constant stream of new books. Carlton used to say that all he needed to get out of a book on investments to make it worthwhile was one good idea. Just one. And that’s because Carlton was a mature growth investor, someone who knew his investing style and was comfortable with it … and good at it. So one good tip made any book worth the reading.

I’ve decided that that’s a pretty good standard for Cabot Wealth Advisory, too. If every issue that comes out gives you one good idea—either a stock recommendation or an idea that will help you become a better investor—I’ve done my job as Editor.

My idea today comes from a 1956 book by Alice B. Morgan titled Investor’s Road Map. The book grew out of a series of investing classes that Morgan gave over the years to people in Bristol, Rhode Island. (She also became a national celebrity in her mid-70s from her appearances on the quiz show The $64,000 Question, but that’s another story.)

The classes Mrs. Morgan gave were free, and the book was a summation of her advice, a source of advice for those who couldn’t get to the class.

As I read the book, what struck me most wasn’t the advice itself. Mrs. Morgan was a plain-spoken Yankee of the old school and her rules were appropriate for the market as it ran in the 1950s.

But what knocked me out as I read was the length to which she went to convince the women who made up a large part of her classes that they could (and should) actually do investing on their own. She notes at one point that women are overwhelmingly the beneficiaries of life insurance policies, and she remarks, “What preparation have they for this responsibility? From even a limited experience, I have come to the conclusion that there is hardly another field in which women have so large a stake and so little knowledge.”

At another point, referring to a contest that had been run in Barron’s on how to invest a hypothetical $100,000 for a widow with two children, one of the winners ridiculed the idea that the widow might take any part in the money herself. And one of the recommendations involved the widow finding a new husband to take over the finance!

Much has changed since the 1950s, but one thing that hasn’t is the idea that there are people who shouldn’t “worry their pretty heads” about financial matters.

There are still people who need the strong advice of Alice B. Morgan on taking responsibility for their own investments.

Nobody will look out for your best interests better than you can do it yourself. And you don’t need to find a shelf of books to give you the advice you need on selecting and managing an equity portfolio. Cabot’s investing advisories have been giving profitable investing advice for 44 years. We offer steady, specific recommendations on growth investing, value investing, income investing, options and small-caps and digests that span the equity spectrum. Ready to take charge of your own portfolio? Cabot is ready to help.

Oh, and if you’re ready for an intensive two-day immersion in investing strategies, the Cabot Investors Conference will kick off its third year on August 12. The Conference will let you rub shoulders with the analysts who write all 11 of Cabot’s investment advisories. It’s intensive, cramming a month’s worth of useful ideas into a very short space. It will also land you in Salem, Massachusetts, at the height of a New England summer, with a treasure trove of scenic sights and historic sites awaiting you. And if you sign up before the end of March, you’ll also get the Extra Early Bird rate on registration. Now there’s a financial tip you can use! I hope to see you there. Click here to make your reservation. 

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In this week’s Stock Market Video, I point out that the stock markets remain in the hands of the bulls, although they’re not exactly running wild. It’s a good time to be putting money to work, but also a good time to pick your targets carefully and keep your stops in place. I also point out several winners in sectors that are producing winners. Click below to watch the video.

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Here’s this week’s Fortune Cookie. Remember, you can always view all previous Fortune Cookies here and Contrary Opinion buttons here.

Tim’s Comment: Such is the paradox of the human brain, which has such awesome potential but is so routinely underused. At Cabot, we’re doing our best to help you better use yours.

Paul’s Comment: This is a variation of the old crack that “any idiot can learn from their own mistakes, but it takes a wise man to learn from the mistakes of others.” I guess Adams was right, there’s just something in human nature that makes us want to try something on our own rather than accept the rules that other people’s experience have contributed to. Fortunately, Cabot can also help you minimize the damage while you verify that those other people were actually right.

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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 3/16/15 – Glass Half Full, or Glass Half Empty? 

Tim Lutts, Chief Analyst for Cabot Stock of the Month looks at the differences between how optimists and pessimists look at the world and the market. And he asks you to take a quiz to let us know where you stand. Stock discussed: XPO Logistics (XPO).

Cabot Wealth Advisory 3/17/15 – What’s Worth More: Safety or Profit?

Cabot Dividend Investor’s Chief Analyst, Chloe Lutts Jensen, writes about the popularity of European bonds with negative yields, which investors buy because a small loss is better than big uncertainty. Chloe continues her series on Best High Yield Utility Stocks. Stock discussed: Xcel Energy (XEL).

Cabot Wealth Advisory 3/19/15 – Growth Stocks for Retired Investors

Roy Ward, Chief Analyst of Cabot Benjamin Graham Value Investor, writes in this issue about when it’s appropriate for retirees to invest in stocks for price appreciation and how to find those stocks. Stock discussed: LKQ Corp. (LKQ).

Have a good weekend,

Paul Goodwin
Chief Analyst, Cabot China & Emerging Markets Report
And Cabot Wealth Advisory


Paul Goodwin can be found on Google Plus.

Stock Picks

Tesla Motors

If Tesla ever begins to cut back on development and innovation costs, earnings will soar.

Alibaba

China seems to be raising up its very own version of Amazon in Alibaba (BABA.

Facebook

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

Cabot Wealth Advisory

Three Vital Tips for the Chinese Stock Market

By Paul Goodwin on September 30, 2016

As U.S. stock markets continue to drag, the Chinese stock market is an ideal alternative for growth investors. Here's how to find the best Chinese stocks.Read More >

What Fed Speeches Mean for the Stock Market Today

By Chloe Lutts Jensen on September 29, 2016

Four Fed presidents gave speeches yesterday, and every word was digested by the stock market in an attempt to better predict the Fed’s next move. With odds of a December rate hike now about even, how should stock investors prepare?Read More >

The Emerging Market Stock You Ought to Own

By Paul Goodwin on September 27, 2016

The company I’m talking about (the one that you probably don’t own) is the largest Chinese instant messaging company. It is a giant in its own right, with a market cap of $262 billion and annual sales of over $19 billion. The company grew revenue by 28% in 2015 and routinely boasts after-tax profit margins over 30%.Read More >