Cabot Wealth Advisory for 06/2015
The Future of Automobiles
The shift from fossil fuels to renewable energy sources is well under way and will accelerate as automobiles using these new energy sources become more competitively priced and more convenient to use—which will bring some creative destruction to the energy industry. (Most people don’t see it coming yet, but that’s typical when it comes to long-entrenched technologies.)
Options Market Making
Last Friday, there was a perfect example of why I left the trading floor, and how computers have taken over the trading world.When I began my trading career on the floor of the Chicago Board of Options Exchange (CBOE) in 1999 as a market maker, it was my job to make markets for small retail investors, large hedge funds and banks.
Market Truisms with Powerful Meanings
I’ve been at Cabot for 16 years now (almost exactly), and I can’t tell you how many words I’ve pounded into my computer during that time. It’s got to be in the millions! But despite all those words, I’m not very good at coming up with truisms—i.e., short, spiffy sayings that really capture an unappreciated truth about the stock market. Maybe because of that, I’m a sucker for these truisms … especially during challenging times.
A Stock Picker's Market
When I say that we are now in a stock-picker’s market, what I’m saying is that the only people who are making any money in stocks over the past six months are the people who are researching, buying and selling individual stocks.
Road Trip—Part Three
Today brings the third installment about my recent 17-day 4,218-mile road trip to and through the American Midwest and back—which I’m presenting not chronologically but thematically. Today’s theme is art, not least because my wife is an artist, and the one concrete reason for this trip was an opening reception at the “Minnesota Center for Book Arts” in which she had work.
Four Reasons for a Reverse Stock Split
Since the motivation behind most reverse splits is generally looked at unfavorably by the investment community, these splits often immediately create downward pressure on a stock, whereas a forward split, more often than not, pushes a stock’s price higher in the near term. So, if the market views reverse stock splits with a jaundiced eye, you may ask, why would a company decide to do such a split? Here are four reasons.
What Do I Do With (Name of Your Stock Here)?
Earlier this week, I got an email from a subscriber to Cabot China & Emerging Markets Report asking for advice about how to handle Vipshop Holdings (VIPS). I’m including a couple of charts of VIPS, so you can see what I’m talking about.
The Trouble With Picking a "Stock of the Year"
Every year, as October and November roll around, Cabot’s analysts start to get requests from all over for their picks for the next year’s “Stock of the Year.” And that’s a tough thing to pick.
Alcohol Stocks: Road Trip—Part Four
Welcome to the fourth installment about my recent 17-day, 4,218-mile road trip to and through the American Midwest and back—which I’m presenting not chronologically but thematically. Today’s theme is wine—American wine—with a focus on the grapes that originated in America.
DANGER: Six Investments You Might Not Know Are at Risk Because of Interest Rate Increases
Rising interest rates mean danger for more than just bonds. Do you own any of the six asset classes below that are in the line of fire from rising rates?
Greece and the Stock Market
Few things get the attention of investors like a good old international crisis. This time around, the culprit is Greece, a country that has been teetering on the edge of default for nearly five years. I’m not an economist, so I won’t comment on what Greece’s potential downfall could do to interest rates, economic growth, unemployment and the like. But I am a student of the market, and I have three thoughts to offer.
More Shark, Less Whale in Your Stock Portfolio
Most sector and country funds usually include a major index as a benchmark, the bar that the fund uses to decide whether it’s had a good year or not. But is beating an index really a sufficiently ambitious goal to aim for?
Road Trip -- Part Five
Welcome to the fifth and final chapter of my travelog on my recent 17-day 4,218-mile road trip to and through the American midwest and back Today, I wrap up the series with 10 notable things encountered on the trip that were unexpected—presented in the order they were encountered.
The S&P 500's Dividend Aristocrats
Dividends are the most reliable indication of a company’s growth and stability. Dividends are the payments of a company’s hard-earned profits. A company’s ability to continually pay dividends provides concrete evidence that the company is performing well.
The Most Common Portfolio Management Mistake
Diversification is one of the first portfolio management principles equity investors learn. It’s simple enough to understand; it’s simply an extrapolation of the old advice not to put all your eggs in one basket. And it’s good advice. But most investors have a narrow view of what diversification means.
A Straight Answer About Sina
On June 18, I received an email from a subscriber to Cabot China & Emerging Markets Report, the investment advisory for which I’m Chief Analyst. Here’s what I wrote back to my subscriber, slightly edited.
Why Greece's Default Matters
It’s a critical time for Greece, its countrymen, the nations that hold its debt and its investors. The big question is: Will Greece default on its 1.5 billion euro debt payments that are due tomorrow on the 322 billion euros that it owes to other countries?
Investors and the Genuinely Horrible Day
There’s nothing like a genuinely horrible day to get the attention of equity investors. Financial websites and online brokerage accounts must have registered a spike in visitors this morning as the investors who suffered through Monday’s storm tried to figure out which way the market’s winds might blow on Tuesday.