Cabot Wealth Advisory for 12/2015
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.
Year-End Opportunities in Low-Priced Stocks
There is a time when low-priced stocks are the place to be. That time is generally the last couple of weeks of the year through the first few weeks of the new year. Why is mid-December to late-January a good time for low-priced stocks? There are two main reasons.
Let’s Do Lunch!
In the middle of October, I hosted a webinar called Lunch with the Analyst. It was an informal affair, featuring me sitting in front of a Mac in Cabot’s conference room talking about stocks. In just 60 minutes, I gave a rundown on what was happening in the markets (both U.S. and emerging market stocks) and gave a few recommendations about stocks that I felt good about.
When Interest Rates are Hiked, It's Time to Buy
Rate hikes typically come when the market is trending up, and investors tend to expect these trends to continue—so they do, for a while. So whether the Fed hikes rates this month, next month or months later, don’t be afraid. Remember that the first rate hike, on average, comes in an environment that is beneficial to investors, and thus you should make the most of it.
Our Favorite End-of-Year Investing Candidates
Energy stocks have been some of the worst dogs in the market this year. That makes them good candidates for tax-loss selling. But the continued decline in oil prices—crude fell another 16% over the past month—means investors may not be ready to start piling back into many energy names even once the Santa Claus rally begins. Pharmaceuticals may be better candidates for end-of-year bargain hunters.
This is the Only Consistency in Oil Stocks
Perhaps the only consistency in the oil market is a lack thereof. The repeating pattern of boom and bust has played out over and over again, regardless of time and place. Oil stocks from the U.S. to Africa to the Middle East to the South Pacific do the same thing. Predicting when and how long each cycle lasts is impossible. But that doesn’t stop investors from trying! The potential gains from the booms are just too juicy.
Advantages of Having Growth Stocks in the Portfolio
Back in 2007, 72% of American owned stocks, either individual stocks, stock mutual funds or a 401(k) or an IRA. Today, about half of all Americans own stocks. (Depending on which poll you read, it’s either 55% who own stocks or 53% who don’t. Polls are twitchy things and need a lot of translating to tell a straight story.) But what that means is that about half of all Americans (give or take 5%) are stock owners.
Apple (AAPL), Pros and Cons
Apple may be the most respected consumer electronics brand in the world. Its users are loyal. Its premium pricing means it’s a very profitable company, with after-tax profit margins of 21.6% in the latest quarter. But there are a couple of reasons why I think AAPL might not be the best investment.
Four Top Trends for 2016
One of my father’s favorite investing aphorisms is this: “Trends tend to last longer, and go further, than anyone expects.” I haven’t been in this business as long as he has, but I’ve already seen him proven right many times over. I’ve seen trends in gold, commodity prices, interest rates, bull markets and practically everything else outlast almost all expectations.
Top Ten Stocks for the New Year
I scanned my database to find 10 stocks with the right credentials to perform very well in 2016. My top 10 picks are stocks of U.S. companies with exceptional prospects for 2016. All of my stock selections are selling at bargain prices, and all have the potential to easily beat the stock market indexes in 2016!
How to Make Money in Oil Stocks
My bet is that the biggest question on the minds of growth investors right now (except for the Great Apple Conundrum of what’s going to happen to AAPL) is the price of a barrel of crude oil. This is no small matter. Despite the welcome increase in solar and wind generation of electricity, most of us power our daily commutes with oil by-products.
Tesla Motors' (TSLA) Competition
Longtime readers will remember that Tesla Motors (TSLA) was one of the market’s top performers back in 2013, zooming to gains of 344% as the company’s Model S sedan earned rave reviews. But the stock has spent much of the past two years building a basing pattern, digesting that advance. And now more and more companies are building electric cars! So I thought I’d take some time today to review the competition, to see if Tesla, whose base model costs $75,000 and has a range of 240 miles, has anything to worry about on the competitive front.
5 Reasons to Be Bullish on Small Caps in 2016
The past year will go down in the history books as a dud in terms of stock market returns. You’re among the lucky few if you were able to generate positive returns given that the broad market is down 2% year-to-date. But I have two pieces of good news. First, that lackluster performance is in the rearview mirror. Good riddance. And second, the future looks a heck of a lot brighter—at least for one particular group of stocks. I think there is 15% upside potential in small-cap stocks over the next year.
China is Powering Ahead
I know that you’ve probably been reading headlines about the perilous state of the Chinese economy, and you think that investing there is too nervous-making to attempt. I have two pieces of evidence to help convince you that adding some China to your portfolio is a good idea. First, let's have a look at a daily chart of PowerShares Golden Dragon Halter USX China ETF (PGJ) showing its performance during the last six months.
An Ode to 2015
Every year, as December is winding down, I write a review of the year in verse. Some years (and some verses) are better than others, and I’d have to say that 2015 was not the one you’d point to as a shining example of peace, progress and prosperity. But the great things about “meh” years is that they are frequently followed by “wow” years; so we have something to look forward to.
Top 10 Value Stocks for 2016
Did you have some serious losses in 2015? If so, figure out where you went wrong and try your best not to make the same mistakes in 2016. Investing is a constant learning experience. We all need to review our past performance, and adjust or refine our methodologies to do better in 2016 and beyond. What will happen in 2016? Which stocks will make big moves?
Using Options to Profit from Disney and Chipotle
Disney (DIS), which owns the rights to Star Wars, is one of the most talked about stocks in the market in the last several months as the newest movie release has shattered box office records. However, there have been growing concerns about DIS stock. Because of these growing concerns about the television business, I might look to buy a Call option on DIS rather than buy the stock.
10 Year-End Investing Tips
Late December is usually quiet for me. The relative quietness makes it a good time to get away from the day-to-day grind of the market, look at past trades, see what I did right or wrong, and come up with a few “do’s” and “don’ts” for the months to come. Thus, today I want to relay a few points.