Cabot Wealth Advisory for 11/2015
The Enormous Potential of Chinese Stocks
My stock pick today is an exchange traded fund (ETF) that will give you exposure to the collective performance of all the Chinese stocks that trade on U.S. exchanges. I don’t often recommend ETFs, preferring to research individual companies where I can get an edge by analyzing the story, number and chart on my own. But a look at the chart for this ETF should show you why I’m feeling pretty good about it right now.
A Crazy Idea?
What follows just might sound like the craziest thing I’ve ever written. But hear me out if you can—and try to keep an open mind. I’ve been writing about investing and capitalism for the past 29 years, and in that time I’ve seen a lot of truly great companies created. Among the public companies that have changed my life—in a good way—are Amazon, Apple, Cisco, Chipotle Mexican Grill, eBay, Expedia, Facebook, Google, Home Depot, Intel, LinkedIn, Microsoft, Monster.com, Netflix, Paypal, Tesla Motors, TripAdvisor and Whole Foods.
Before We Wrap Up 2015
As Hanukah and Christmas and Kwanzaa roll near, I would like to tell you how important YOU are as a part of the Cabot family. So I will, in a roundabout way. One of the challenges of running a small business is finding good employees and managing them well, especially without the benefit of a full-time Human Resources department.
Is it Time to Buy Energy and Gold Stocks?
While the vast majority of my research involves growth stocks, I do keep an eye out for potential turnaround situations. Why? Because historically, about one out of every five or six big winners will be a turnaround situation—especially in so-so economic times. (In the late 1990s, by contrast, almost all the big winners were growth stocks.) So, even though I never, ever (ever!) buy stocks and sectors that are in longer-term downtrends, I do keep an eye on them for signs that they’re turning higher. That leads me to energy and gold stocks.
Drownproofing Your Portfolio
Cabot’s growth advisory letters—Cabot Growth Investor, Cabot Top Ten Trader, Cabot Emerging Markets Investor—use market timing to identify positive market conditions, essentially telling you when the investment surf is up. Their advice is especially important when market conditions are negative. Knowing when to get out of the water is how surfers—and growth investors—stay safe.
3 Flavorful Stocks to Spice up Your Portfolio
There are a lot of things that are improved with a little pumpkin. Freshly baked pumpkin and apple muffins and of course, pumpkin pie, are on the top of the list. Companies that make flavorings are as varied as the industry itself. Here is the list of 3 flavorful stocks to spice up your portfolio.
3-D Printing Stocks
Remember the 3D printing stocks that were hot back in 2012 and 2013? 3D Systems (DDD) soared from 9 to 97, while Stratasys (SSYS) zoomed from 18 to 130. Some of the advance was certainly justified. Both companies had demonstrated their ability to grow earnings year after year, and in 2012 and 2013, both companies enjoyed many quarters when revenues boomed more than 50%. But look at the stocks today.
How to Fed-Proof Your Portfolio
Friday’s strong jobs report—which raised the probability of a December rate hike to around 70% according to futures markets—initially caused a sharp dip in the major indexes, followed by an end-of-day rally. However, that was followed by more dramatic corrections of about 1% in each of the indexes on Monday.
Three Comments on Smart Investing
The investment game attracts lots of smart people who believe that they should be able to think their way to investment success. This is no surprise, because smart people are always trying to solve problems with their intelligence. If the tools you have at your command really do guide how you look at problems, then smart people will want to use their brains. And smart stock investors will want to bring their intellect to bear on the problem of how to make money in stocks.
My Favorite IPA ... and Three Beer Stocks
There are basically three can manufacturers that supply small U.S. craft brewers, and it’s estimated that between 2011 and 2014 craft beer volume in cans increased from just 2% to 10%. I don’t know if that growth came purely at the expense of bottled beer, but I suspect with the number of breweries soaring, there was some incremental growth.
Five Ways to Increase Your Profits and Reduce Your Risk
Long experience has taught me that the number-one thing subscribers want from Cabot is stock tips. They want the name of the next Apple (AAPL), the next Netflix (NFLX), the next Amazon (AMZN). But what I’ve discovered is that many people, even when presented the right stocks, don’t know how to handle those stock tips properly. So today it’s back to basics. Today, I’m presenting five ways to increase your profits and reduce your risk.
Apple and Gilead: Past the Point of Peak Perception?
Both Apple (AAPL) and Gilead Sciences (GILD) are making a ton of money and are using their cash flow to buy back stock and pay decent dividends. And all estimates and indications are that the companies will continue to make a boatload of money in 2016 and beyond. Thus, as companies, things look good for Apple and Gilead. The stocks, however, have acted ragged for months.
How to Get a Fat Portfolio During a Flat Market
The only way to make money in a flat market with one foot nailed to the floor is to own stocks that are going up. (And there are always stocks that are going up, even in wretched market.) Cabot growth investing advisories can help you handle the market’s cranky periods and find winners when they’re thin on the ground
Two Stocks Mr. Buffett Should Own
As Warren Buffett said, "Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” Two stocks that I think Mr. Buffett should own are Johnson Controls and Whirlpool.
Yes, You Can Have Both Dividends and Growth
How do you find growth companies that pay dividends? Using the Cabot resources, there are two excellent ways. One is to refer to Cabot Dividend Investor, which recommends three specific classes of stocks for its readers: High Yield, Dividend Growth and Safe Income.
Three Things I'm Thankful For
The question of thankfulness is especially interesting to me because I write a financial advisory on how to invest in emerging market stocks, and I know that being a growth investor requires a certain amount of optimism. Pessimists don’t buy growth stocks because they believe deeply that most things will turn out badly. With all that philosophical maundering out of the way, I’d like to run down my optimistic list of things I’m thankful for.
Spending Your Country to Prosperity?
On November 11, Chinese consumers spent an astounding $14.3 billion on Singles Day, a number that dwarfs the Black Friday to Cyber Monday shopping binge in the U.S. The founders of the Day thought that the date 11/11 looked like trees with no branches and Singles Day began as an ironic way for unmarried and unattached people to give themselves a present (because there was nobody else to give them one).
What to Do About Those “Safe” Retail Stocks?
Perhaps most difficult for the average investor this year is that even the sectors and stocks considered to be safe have been decimated. When steady stocks such as Wal-Mart (down 30% year-to-date), ConocoPhillips (down 22% year-to-date) and Alcoa (down 40% year-to-date) are getting destroyed, it can be alarming. Can an investor who wants to own Nordstrom stock protect himself from the downside? Yes—by buying puts.